From: Wall Street
The data from the US Bureau of Labor Statistics on Thursday showed that the growth of labor costs in the United States in the first quarter hit the largest in a year due to the slowdown of productivity growth, which means that there was a sharp jump after the growth of this indicator slowed significantly in the second half of 2023, which may increase the risk that inflation in the United States will remain high.
In terms of specific data, the initial non-agricultural unit labor cost in the United States in the first quarter was 4.7%, significantly higher than the expected 3.6%, and the previous value was only 0.4%. The unit labor cost, that is, the cost paid by enterprises to employees to produce a unit of output after taking into account the changes in productivity, is rising at an annual growth rate of 4.7%.
The initial value of US non-agricultural productivity in the first quarter was only 0.3%, lower than the expected 0.7%, and the previous value was raised from 3.3% to 3.5%. Productivity indicators refer to the output of non farm employees per hour.
Thursday's report also showed that the output in the first quarter of this year increased by 1.3% over the previous three months, the smallest increase in nearly two years, when the output data recorded a decline. Working hours increased by 1% in the first quarter. The increase of hourly salary in the first quarter was 5% higher than that in the previous quarter, the largest increase in the past year.
Federal Reserve Chairman Powell said at the press conference after the FOMC meeting on Wednesday that it is difficult to judge whether the strong growth of US productivity in 2023 will continue. He has previously said that the increase of immigrants can support the economic growth of the United States without increasing inflation, and the influx of immigrants has also been proved to improve productivity.
Zerohedge, a financial blog, commented that wage inflation has been confirmed and is growing at the fastest rate in a year. The productivity gains we were told to expect from AI did not appear in the data.
Last week, the Bureau of Labor Statistics revised quarterly and annual productivity data and working hours data for the past five years. In recent quarters, if there is any revision, the data is generally revised down by 0.1% - 0.2%, and the revision range of the first year of COVID-19 is much larger.
The latest non-agricultural unit labor cost and other data on Thursday are the same as another labor cost data released by the U.S. Bureau of Labor Statistics earlier this week, reflecting the same trend. Data released on Tuesday showed that the Employment Cost Index, a measure of wages and benefits, rose 1.2% in the first quarter, exceeding market expectations by 1%. The previous value was 0.9%, the largest increase in a year.
It should be noted that in recent years, the labor cost in the United States usually rises sharply in the first quarter, but tends to slow down in the subsequent period. Although the data fluctuates greatly, its failure to slow down will inevitably become another obstacle for the Federal Reserve to fight against inflation. After a series of recent reports showed that the inflation pressure was stubborn, the labor cost data further increased the market's concern about the progress of the Fed's policymakers in achieving the inflation target.
As the US interest rate is expected to remain high for a period of time, the investment of enterprises in equipment may continue to be a weak factor hindering the overall economic growth of the US. The latest PMI data of the US manufacturing industry shows that the US manufacturing industry started weakly in the second quarter, and the recovery in the first quarter was only a flash in the pan.
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There are risks in the market, so investment should be cautious. This article does not constitute personal investment suggestions, nor does it take into account the special investment objectives, financial conditions or needs of individual users. Users should consider whether any opinions, opinions or conclusions in this document are consistent with their specific situation. Invest accordingly and be responsible for it.
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