Friday morning will bring the quarterly report on nonfarm productivity and unit labor costs. With the Employment Cost Index from last week having shown a pop much higher for the second quarter, economists and market watchers will likely be paying much more attention to this report than normal. The goal: to identify whether hat blip in wages and benefits is turning into higher operating costs for businesses in America.
As we are more focused on the labor cost in the equation this time around, we will look at what is released as the second reading first. Second-quarter unit labor costs are expected to have risen by 1.6% from for the previous quarter. The range listed by Bloomberg started at a gain of 0.3% and went as high as 7.5%, but that higher number feels like an outlier. The first-quarter unit labor costs were shown to have risen by 5.7%.
Bloomberg predicts the nonfarm business productivity business consensus estimate for the second-quarter will rise 1.4%, but there is a very wide range of estimates from -5.0% to 3.5%. The previous quarter was up 3.2%.
We saw an uptick in labor costs in the previous quarter in the Employment Cost Index by 2%, which caused some concern in the market that wage inflation was finally picking up. When the unit labor costs come out, we will have a better idea on whether wage inflation is something of real concern or just a blip on the radar.
Our idea on this matter is that if the unit labor costs come in above 2%, it would lend more credence to wage inflation and would validate what the Employment Cost Index suggested. If the report comes in closer to only 1%, then the market may suggest that the Employment Cost Index somehow missed the mark.
ALSO READ: States Where It’s Hardest to Find Full-Time Work
Credit Card Companies Are Doing Something Nuts
Credit card companies are at war. The biggest issuers are handing out free rewards and benefits to win the best customers.
It’s possible to find cards paying unlimited 1.5%, 2%, and even more today. That’s free money for qualified borrowers, and the type of thing that would be crazy to pass up. Those rewards can add up to thousands of dollars every year in free money, and include other benefits as well.
We’ve assembled some of the best credit cards for users today. Don’t miss these offers because they won’t be this good forever.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.