Worker productivity unexpectedly took a steep dive. As a result, production costs soared.
The BLS report on Productivity and Costs shows nonfarm business sector labor productivity decreased 0.3 percent in the third quarter of 2019.
Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers.
The BLS says output increased 2.1% and hours worked increased 2.4% in the third quarter.
Given the GM strike and huge problems at Boeing, I struggle to see output and hours worked are both up, but that is what the reports says.
Missing the Boat
Economists were well off the mark.
- Economists in the Econoday poll expected a 1% rise in productivity in a range of +0.1% to +1.9% vs. the delivered -0.3%
- Economists expected labor costs to rise 2.2% in a range of 1.3% to 2.9% vs the delivered 3.6%.
Both results were outside the consensus range.
This material is based upon information that Sitka Pacific Capital Management considers reliable and endeavors to keep current, Sitka Pacific Capital Management does not assure that this material is accurate, current or complete, and it should not be relied upon as such.
Latest Forex Analysis
Editors’ Picks
AUD/USD battles 0.7700 amid covid, stimulus woes-led risk-aversion
AUD/USD holds the lower ground, testing the 0.7700 level amid broad risk-aversion that has triggered a bounce in the safe-haven US dollar. Uncertainty over the US stimulus, worries over new covid strain and lockdowns weigh on the risk appetite.
GBP/USD pressured towards 1.3650 amid risk-off, ahead of UK jobs
GBP/USD remains depressed, heading towards 1.3650. The cable responds to the fresh risk-off mood after flashing a two-day losing streak. UK virus data suggests an improvement in covid conditions, Health Secretary Matt Hancock gives credits to activity restriction measures.
Gold: Bulls target daily extension
Gold is on the verge of an upside extension on a break of weekly resistance. XAU/USD is making progress with respect to the bullish market structure following a period of consolidation in recovery of the daily correction.
Ripple is South Korea’s most popular cryptocurrency, but XRP price stays pressured
XRP/USD bounces off intraday low of 0.2647, stays below 21-day SMA for fifth day. As per the latest report from Messari, Bitcoin and Ripple are the most popular cryptocurrencies in South Korea.
US Dollar Index: A breach of 90.00 exposes 2021 lows at 89.20
The inability of USD-bulls to push further north of recent tops in the 91.00 region in past sessions prompted sellers to return to the markts and shifted the attention to the potential continuation of the downtrend.