Productivity is up. (BLS press release)
The Bureau of Labor Statistics of the U.S. Department of Labor today reported revised productivity data—as measured by output per hour of all persons—for the third quarter of 2007. The seasonally adjusted annual rates of productivity growth in the third quarter were:
6.7 percent in the business sector and
6.3 percent in the nonfarm business sector.
In both sectors, changes in productivity are higher than the preliminary estimates published November 7, and represent the largest productivity gains since the third quarter of 2003. The upward revisions to productivity resulted from upward revisions to output—which grew 5.7 percent in both sectors—and small downward revisions to hours, which fell 1.0 percent in the business sector and 0.6 percent in the nonfarm business sector in the third quarter.
Also see the Wall St. Journal.
Does this change anything going into the FOMC meeting? In my estimation, no.
The productivity estimates provides ammunition to those who are not worried about inflation. This strongly implies that the inflationary cost of easing when it is not needed is very low. Consequently, it improves the odds of easing in some ways.
on the other hand productivity is a good leading indicator and implies that the economy may not be as weak as feared and so reduces the odds of easing.
note that non-financial sector profits margins improved, generally a positive sign for investment and growth.