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Productivity and Costs

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Definition of 'Productivity and Costs'

During the first week of the last month of each quarter, the Bureau of Labor Statistics (BLS) at the United States Department of Labor release the Productivity and Costs figures. Data is for the previous quarter. Q1 data is release in the first week of June. Preliminary figures are released the month before.

Productivity and Costs measure two factors:
  • Productivity: The growth of labor efficiency in producing the economy's goods and services.
  • Costs: Unit labor costs show the costs of producing each unit of output.
If productivity can increase then this allows real wages to increase without the threat of inflation. This in turn allows for a sustainable growth in GDP without having to restrict this growth by increase interest rates because the productivity gains are offsetting the inflation effects. Well, that is the theory.

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