Overview
- Nonfarm business productivity increased at an unrevised 4.9% annualized rate in the third quarter, while unit labor costs fell 1.9%, according to the Bureau of Labor Statistics.
- Durable-goods manufacturing productivity was revised up to a 5.4% annual rate, with output up 3.6% and hours worked down 1.7%.
- Total manufacturing productivity was revised to a 3.7% annual pace as output rose 3.0% and hours declined 0.7%, and unit labor costs were updated to a 1.1% increase.
- Some economists cited by Reuters point to heavy investment in artificial intelligence as a likely boost to efficiency, while other analysis highlights tight labor markets, reshoring and tax incentives for capital spending.
- Fed Chair Jerome Powell said technology lifts productivity over time and underpins rising wages, reinforcing the longer-run benefits of efficiency gains.