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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
US DATA
Data released Thursday alongside jobless claims showed labor productivity on an output-per-hour basis soaring by 5.4% Q/Q (ann.), better than the expected +4.3%, with business sector output +8.4% vs just a 2.9% increase in total hours worked.
- This chimes with what we usually see in recoveries from recession. Coming out of a downturn, firms typically hold off on hiring additional workers until they are confident demand has sustainably returned, and in the meantime, output picks up while the labor 'denominator' remains relatively steady.
- The inflationary flip side of this equation - unit labor costs - have been subdued, falling by 0.3% Q/Q ann. in Q1 and up just 1.6% Y/Y (SA). But ULCs should pick up strongly as the year progresses: firstly as payrolls continue to grow robustly, but secondly, due to the composition of those payrolls (lower-productivity service sector jobs tended to be hardest hit in the pandemic).
- The Fed among other interested parties will be watching to see the degree to which the (likely) lack of sustained productivity gains translates into broader wage inflation pressures. That said, as with other measures of inflation in this recovery, ULCs are likely to remain erratic, so it will likely be several quarters before we have a stronger understanding of post-pandemic dynamics.
Refers to nonfarm sector. Source: BLS, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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