Nonfarm productivity increased at a 2.0% annual rate last quarter (0.9% y/y) following a 2.9% Q2 gain, revised from 2.5%. Real output increased at a 4.4% rate (3.0% y/y) while hours worked gained 2.3% (2.1% y/y). Compensation per hour increased a steady 2.3% (3.3% y/y), but when adjusted for inflation it improved 1.2% (1.4% y/y). The improvement in productivity caused unit labor costs to increase just 0.3% in Q3 (2.4% y/y) following a 0.5% decline. The Q3 productivity gain outpaced expectations for a 1.1% rise in the Action Economics Forecast Survey. A 0.8% rise in unit labor costs was expected.

Manufacturing sector worker productivity rose at a steady 3.2% rate (2.8% y/y) after a 3.5% rise. Output grew 4.1% (4.4% y/y) after a 7.1% gain, while hours worked improved 0.8% (1.5% y/y) following a 3.4% Q2 rebound. Worker compensation per hour increased 2.5% (3.4% y/y). Adjusted for price inflation, compensation gained 1.4% (1.6% y/y), recovering a 1.4% decline during Q2. Unit labor costs fell 0.7% (+0.6% y/y) following a 1.8% decline.

The productivity & cost figures are available in Haver's USECON database. The expectations figure is from Action Economics and is the AS1REPNA database.