US: Unit Labor Costs rise 6.3% in Q1 vs. 5.5% expected

Unit Labor Costs in the US increased at a stronger pace than expected in Q1.
US Dollar Index turns positive after the report rising above 101.50.

Matías Salord FXStreet

“Unit labor costs (ULC) in the nonfarm business sector increased 6.3% in the first quarter of 2023, reflecting a 3.4% increase in hourly compensation and a 2.7% decrease in productivity. Unit labor costs increased 5.8% over the last four quarters”, the US Bureau of Labor Statistics (BLS) reported on Thursday. The increase in ULC was higher than the 5.5% increase expected.

“Nonfarm business sector labor productivity decreased 2.7% in the first quarter of 2023, the US Bureau of Labor Statistics reported today, as output increased 0.2% and hours worked increased 3.0%. From the same quarter a year ago, nonfarm business sector labor productivity decreased 0.9%, reflecting a 1.3% increase in output and a 2.3% increase in hours worked.”

“The 0.9% productivity decline is the first time the four-quarter change series has remained negative for five consecutive quarters; this series begins in the first quarter of 1948.”

Market reaction

The US Dollar rose across the board after the report. The DXY climbed above 101.50 while EUR/USD tumbled toward 1.1020 as traders await European Central Bank President Lagarde press conference.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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