Quotes from Capital Economics:- The 2.0% annualised gain in third-quarter non-farm productivity looks encouraging, but productivity is up by a more modest 0.9% over the past 12 months and that third-quarter figure will be revised lower.- The 2.0% third-quarter gain was a little higher than the 1.5% consensus forecast, but in line with our own estimate. The international trade data for September (released on Tuesday) indicated that third-quarter GDP growth will be revised down from the initial 3.5% annualised estimate to nearer 3.0%. That would imply productivity growth was actually nearer 1.5% rather than 2.0%.- The weakness of productivity in recent years is one of the reasons why we think that the growing evidence of a surge in wage growth will prompt the Fed to hike rates sooner than expected. Without faster productivity growth, those higher wages will be mirrored by a pick-up in underlying price inflation.
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