Unit Labor Costs q/q reflect a change in the cost of labor per unit of output produced, in the reported quarter compared to the previous one. Costs per unit are calculated as the ratio of total labor compensation for the reported period to total output, i.e. as the hourly compensation divided by labor productivity.
Unit labor costs make up the major part of producers' costs, thus it is a very important indicator for measuring national economic activity. This indicator is closely related to associated indicators. Thus, an increase in the average hourly wage with an unchanged production level leads to an increase in labor costs. An increase in production per time unit normally reduces labor costs.
Economists use the indicator to measure production activity. The data is also used in forecasting and analyzing pricing, wages and technological efficiency of production. The indicator value is viewed in combination with labor productivity and average hourly earnings.
Growth of unit labor costs normally leads to an increase in the price of the final product and thus to inflation increase. Therefore the index growth may be seen as positive for the dollar.
The chart of the entire available history of the "United States Unit Labor Costs q/q" macroeconomic indicator. The dashed line shows the forecast values of the economic indicator for the specified dates.
A significant deviation of a real value from a forecast one may cause a short-term strengthening or weakening of a national currency in the Forex market. The threshold values of the indicators signaling the approach of the critical state of the national (local) economy occupy a special place.
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