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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.

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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.

Mike "Mish" Shedlock