Labor costs in the U.S. fell in the third quarter of 2023, CNBC reports.
What’s going on: “Unit labor costs, a measure of hourly compensation against productivity, fell 0.8% for the July-through-September period at a seasonally adjusted rate. Economists surveyed by Dow Jones had been looking for a gain of 0.7%. On a 12-month basis, unit labor costs increased 1.9%. The breakdown reflected a 3.9% increase in hourly compensation, offset by a 4.7% rise in productivity.”
- The productivity increase—which surpassed economists’ expectations—included a rise in both output and hours worked.
The backdrop: The news came on the heels of the Federal Reserve’s decision Wednesday to leave interest rates unchanged.
- “On Wednesday, Fed Chair Jerome Powell said wage gains ‘have really come down significantly over the course of the last 18 months to a level where they’re substantially closer to that level that would be consistent with 2% inflation over time,’ the central bank’s target.”