Productivity and Labor Costs Reach Tug of War

U.S. non-Farm Productivity for the third quarter was revised lower to +2.3%, lower than the 2.5% expected from Dow Jones and much lower than the preliminary figure of 3.1%.  A change in hours worked and an output adjustment.  Productivity was down by -0.1% in the second quarter.

One issue which is good for businesses but bad for job seekers is that the third quarter unit labor costs were down by -2.5% versus -0.1% in the second quarter. The question is whether lower labor costs will lead to more hiring or whether employers will keep trying to milk out more from each body at the office or factory.