United States: Q2 Productivity Growth Unrevised; Unit Labor Costs Revised Down; Trade Deficit Slightly Below Expectations; Q3 GDP Tracking Lowered
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Abstract
Goldman Sachs' September 3 US macro note reports final Q2 nonfarm productivity unrevised at +1.4% quarter-over-quarter annualized (+2.2% y/y), matching both Goldman and consensus expectations. Labor productivity has averaged 2.1% annual growth since 4Q19, well above the prior cycle's 1.6%, and Goldman projects roughly 2.3% average growth over 2026-2030. Final Q2 unit labor costs were revised down 0.1pp to +1.2% annualized, below the +1.3% consensus, while hourly compensation was marked down 0.1pp to +2.6% (+3.7% y/y unrevised); Goldman's wage tracker ran at +2.8% annualized in Q2 (+3.6% y/y). The July trade deficit widened $17.4 billion to $88.6 billion, slightly smaller than expected (Goldman -$91.1 billion; consensus median -$90.2 billion), as goods imports rose $11.4 billion on computers and semiconductors while goods exports fell $6.2 billion on crude oil and non-monetary gold. Incorporating these data, Goldman cut its Q3 GDP tracking estimate by 0.2pp to +2.5% annualized. Labor market data were in line: initial claims for the week ended August 29 rose 2k to 206k, and continuing claims for the week ended August 22 rose 8k to 1,779k.