U.S. Labor Productivity Unexpectedly Climbs 1.6% In Q3

(RTTNews) - With output rising and hours worked falling, the Labor Department released a report on Thursday showing an unexpected increase in U.S. labor productivity in the third quarter.

The Labor Department said productivity climbed 1.6 percent in third quarter following an upwardly revised 3.5 percent jump in the second quarter.

The continued growth came as a surprise to economists, who had expected productivity to edge down by 0.2 percent compared to the 3.3 percent increase that had been reported for the previous quarter.

The unexpected increase in productivity, a measure of output per hour, came as output increased 1.2 percent and hours worked decreased 0.5 percent.

In the second quarter, output soared by an upwardly revised 5.1 percent, while hours worked also increased by 1.5 percent.

The report also said unit labor costs rose by 1.4 percent in the third quarter after tumbling by 1.8 percent in the second quarter. Economists had expected costs to surge up by 2.3 percent.

The rebound in labor costs in the third quarter was partly due to a 3.0 percent jump in hourly compensation, which rose by 1.7 percent in the previous quarter.

Real hourly compensation, which takes changes in consumer prices into account, climbed by 1.4 percent in the third quarter after falling by 1.2 percent in the second quarter.

Compared to the same quarter a year ago, productivity edged up by 0.4 percent in the third quarter, as output rose by 2.3 percent and hours worked increased by 1.9 percent.

Unit labor costs were up by 2.0 percent year-over-year in the third quarter amid a 2.4 increase in hourly compensation.