Labour Costs And Productivity Climb More Than Expected

Janitor cleaning garbage Urige ButaREUTERS/Stoyan NenovOlympic marathon hopeful Urige Buta pushes a cleaning cart as he works at a high school in Haugesund, west of Oslo on March 19, 2012.

New data on the labour market is out.

Nonfarm productivity climbed by 0.9% in the second quarter, which was higher than the 0.6% increase expected.

During the same period, unit labour costs increased by 1.4%. Economists were looking for a 1.2% gain.

In other words, companies are squeezing more out of their employees, and they’re paying them more to do it.

Economists argue that this is not a sustainable trend. Eventually, companies will have to start hiring more aggressively.

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