Higher wages don’t have to mean higher inflation. That could matter for Bitcoin
Preliminary Q3 productivity outpaced hourly compensation, offering a cost counterpoint while inflation keeps the Fed cautious. Read the full story on CryptoSlateUnderstand the crypto stories that matter and what to watch next. Get The Catalyst in your inbox
US nonfarm businesses produced more per hour in the third quarter, allowing labor costs per unit of output to fall even as hourly compensation rose. For Bitcoin, that offers a potential offset to jobs-driven rate fears: if lower cost pressure helps cool inflation and expected interest rates, financing could become less expensive.
The Bureau of Labor Statistics' preliminary November 5 release showed nonfarm business productivity rising 3.6% as output increased 3.7% and hours worked rose 0.1%. Hourly compensation increased 2.9%, while unit labor costs fell 0.7%. All those quarterly changes are seasonally adjusted annualized rates.
Unit labor costs track compensation relative to output. BLS divides hourly compensation by productivity: when each hour produces more, businesses can pay more per hour without incurring higher labor costs for each unit they produce.
That complicates a reading of the November 6 employment report as an automatic inflation warning. October payrolls increased 165,000, above the prior 12 months' average monthly gain of 48,000. Average hourly earnings for private nonfarm employees rose 0.4% over the month and 3.1% over a year.