Stephen Stanley Unit Quotations

Fed officials will remain watchful for a reacceleration in unit labor costs, especially with anecdotal evidence and an upturn in average hourly earnings growth suggesting that wage pressures may be picking up.

Productivity rises could be more modest going forward, since hours worked should grow faster as job losses caused by the hurricanes are reversed. Fed officials will remain watchful of a reacceleration in unit labor costs.

We expect productivity growth to moderate, and compensation gains and unit labor costs to pick up. Just another piece of the puzzle that points toward more Fed tightening than the market currently expects.