US Productivity Unchanged in Q1

U.S. worker productivity was not as weak as initially thought in the first quarter, but the persistently soft trend is an obstacle to faster economic growth.

The Labor Department said on Monday non farm productivity, which measures hourly output per worker, was unchanged in the last quarter. It was previously reported to have declined at a 0.6 percent annualized pace.

The government also reported that the growth in labor costs at the start of the year was not as strong as reported in May, which could cast doubts on the tightening labor market’s ability to unleash robust wage growth.

The revision to first-quarter productivity was in line with economists’ expectations. Productivity increased at an unrevised 1.8 percent pace in the fourth quarter.

U.S. financial markets were little moved by the report.

Compared to the first quarter of 2016, productivity grew at a 1.2 percent rate, pointing to some improvement.

Productivity has increased at an average annual rate of 0.6 percent over the last five years, below its long-term rate of 2.1 percent from 1947 to 2016, indicating that the economy’s potential rate of growth has declined.\

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza