• US Q1 Unit Labor Costs are revised sharply lower from 6.3% to 4.2%. 
• US Dollar pulls back after the data, offsetting the ADP impact. 

Nonfarm business sector labor productivity decreased 2.1% in the first quarter of 2023. Labor productivity was revised up 0.6%, the combined effect of a 0.3-percentage point upward revision to output and a 0.4-percentage point downward revision to hours worked. 

“From the same quarter a year ago, nonfarm business sector labor productivity decreased 0.8 percent, reflecting a 1.4-percent increase in output and a 2.2-percent increase in hours worked. The 0.8-percent productivity decline is the first time the four-quarter change series has remained negative for five consecutive quarters; this series begins in the first quarter of 1948”, said the Bureau of Labor Statistics. 

“Unit labor costs in the nonfarm business sector increased 4.2% percent in the first quarter of 2023, reflecting a 2.1-percent increase in hourly compensation and a 2.1-percent decrease in productivity. Unit labor costs increased 3.8 percent over the last four quarters”, added the press release. Unit labor costs in the manufacturing sector increased 3.1% in Q1, reflecting a 0.5%increase in hourly compensation and a 2.5% decrease in productivity. From the same quarter a year ago, manufacturing ULC increased 4.5%.