US Q3 Labor Productivity Beats Forecasts at 3.6% as Unit Labor Costs Drop

United States third-quarter nonfarm business sector productivity expanded at an annualized rate of 3.6%, topping consensus forecasts, according to Bureau of Labor Statistics data released Thursday. Meanwhile, unit labor costs contracted by 0.7%, defying expectations for an increase. Productivity accelerated from the previous quarter, initially reported at 1.4% and revised up to 2.1%. Second-quarter unit labor costs were also revised upward from 1.2% to 1.9%. The combination of rising productivity and falling labor expenses offers a disinflationary dynamic that is supportive of corporate profit margins and equity indices.