The productivity of the United States in the first quarter of this year decreased in the first year in three years, which led to an increase in employment costs, which can put pressure on corporate profit at a time when it suffers from additional costs as a result of customs duties.
On Thursday, the United States Statistics Department announced that the performance of the non -narmodal sector, which measures hourly production for each employee, decreased by 0.8 percent in the first quarter. This is the first decrease in its kind since the second quarter of 2022, and in the fourth quarter of last year, growth rate of 1.7 percent is reached.
Economists, whose Reuters were interviewed, expected to reduce performance by 0.7 percent after growth by 1.5 percent in the previous quarter. Productivity also became a witness of growth by 1.4 percent compared to last year. The report on the advanced government gross domestic product, which was released last week, indicated a decrease in performance, since it showed a reduction in the economy with an annual rate of 0.3 percent, which is its first decrease in three years.
The American economy witnessed an increase in imports, as companies quickly imported goods before the start of customs duties inflicted by President Donald Trump. Complex customs duties, including an increase of 145 percent on Chinese imports, are factors that increase expenses for companies.
The costs of the working unit, the cost of work for each production unit increased at a speed of 5.7 percent in the first quarter, after an increase by 2 percent during the period from October to December. Economists expected to accelerate employment costs at a speed of 5.1 percent, after previous growth assessments by 2.2 percent.
While employment costs increased by 1.3 percent compared to last year, while compensation for an hour increased by 4.8 percent after an increase by 3.7 percent in the previous quarter. As for economic growth, the American economy recorded a growth of 2.7 percent compared to the previous year.
Despite the slowdown in the labor market, politicians are not considered the main source of inflationary pressure. On Wednesday, the Council of the Federal Reserve System remained at a standard interest rate for one night by 4.25 percent – 4.50 percent, noting that “the risk of high levels of unemployment and inflation increased.” It should be noted that the US Central Bank is aimed at 2 percent inflation levels.
