1Q prelim nonfarm productivity +0.7% vs and.>

US DATA: 1Q prelim nonfarm productivity +0.7% vs +0.9% expected and unit 

labor costs +2.7% vs +3.0% expected, though both are up from their 

4Q rates. 

- Nonfarm productivity +1.3% y/y vs +1.2% in 4Q, while ULC +1.1% y/y vs 

+1.6% y/y in 4Q, but that slowdown in inflation growth reflects a sharp 

4.8% q/q jump in 1Q 2017 ULC.

- For 4Q, productivity rev up to +0.3% vs flat prev, but ULC rev down to 

+2.1% vs prev +2.5%.

- 1Q output growth +2.8%, smaller than +3.7% in 4Q, but hours worked 

growth slowed even more to +2.1% from +3.3%, accounting for the modest 

improvement in productivity growth.

- 1Q hourly compensation +3.4% after +2.4% in 4Q, but real hourly 

compensation -0.1% after -0.8%, showing wage growth is being outpaced by 

inflation.