U.S. third-quarter unit labor costs revised sharply down

Reuters/Lucia Mutikani/12-06-17

U.S. unit labor costs were much weaker than initially thought, declining both in the second and third quarters of this year, suggesting that inflation could remain benign for a while.

The Labor Department said on Wednesday that unit labor costs, the price of labor per single unit of output, dropped at a 0.2 percent annualized rate in the last quarter instead of increasing at a 0.5 percent pace as reported last month.

PG View: With compensation declining into year-end, hopes for resurgent inflation are dimmed. The Fed should take this into consideration when they meet next week.

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