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US Q3 productivity beats forecasts, factory sector activity expanded

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Staff Writer | November 2, 2018
American shipyards
America   Labour productivity grew by 2.2%

US non-farm labour productivity was steady year-over-year in the third quarter and some economists believed it was set to accelerate significantly.

In comparison to the previous quarter, labour productivity grew by 2.2% over the three months ending in September (consensus: 1.8%), as hours worked rose by 1.8% but output bounded ahead by 4.1%, the Department of Labor said.

Hourly salaries meanwhile were up by 3.5%, which when productivity was subtracted left unit labour costs ahead by 1.2% (consensus: 1.2%).

Labour productivity for the second quarter meanwhile was revised higher by one tenth of a percentage points to 3.0%.

Versus a year ago, US labour productivity was steady in comparison to the prior quarter, rising by 1.3% year-on-year.

US factory sector activity expanded a tad less quickly than initially thought in October, according to the results of a widely-followed survey.

IHS Markit's manufacturing sector Purchasing Managers' Index edged up from a reading of 55.6 for September to 55.7 in October, reaching a five-month high, although it was also below the preliminary reading of 55.9.

Growth in the US manufacturing sector eased more than expected in October, according to data from the US Institute for Supply Management.

The ISM's headline manufacturing index fell to 57.7 from 59.8 in September, missing expectations for a small drop to 59.0 and coming in at a six-month low.

The new orders index printed at 57.4 in October from 61.8 the month before, while the production index fell to 59.9 from 63.9 and the employment index declined two percentage points to 56.8.

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