Unit labor costs in Brazil from January 2010 to December 2012 rose by 44%, Volpon estimates.
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Furthermore, unit labor costs increased 2.2% in the second quarter, possibly putting additional pressure on margins.
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Year-over-year productivity grew at a 2.4% clip in the second quarter, compared to 3.2% for unit labor costs.
Recent indicators showing falling productivity and a rapid increase in unit labor costs suggest the pressure is building.
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The decline, combined with an increase in hourly compensation, led to a 4.5 percent increase in unit labor costs.
At the same time, productivity rose 3.9% while unit labor costs fell 1.5%.
After all, 2010 productivity rose 3.9% while unit labor costs fell 1.5%.
In 2010, productivity was up 3.9% while unit labor costs fell 1.5%.
Year-over-year, productivity grew at a 2.4% clip in the second quarter, less than the 3.2% rise in unit labor costs.
The Fed said that core inflation was increasing but that productivity gains have held down the rise in unit labor costs.
For the full year, nonfarm productivity increased about 1 percent and unit labor costs rose 0.7 percent, the government said.
While output has fallen 10% year-over-year down to 3.6% by April 2011, unit labor costs have risen to the 4% level year-over-year.
After all, in the second quarter of 2012, productivity rose 2.2% while unit labor costs lagged up a mere 1.5%.
Lower unit labor costs are confirmed by the employment cost index.
Productivity growth in the last three measured quarters exceeds six percent, causing unit labor costs to decline not increase slower, but decline significantly.
All peripheral countries have made significant progress toward regaining competitiveness in terms of unit labor costs, albeit at a high price in unemployment.
Wages and unit labor costs are rising sharply now, but the 2006 hurricane season was light, and energy prices have subsided, softening the inflation bulge.
One result of ignoring these recommendations is increasing unit labor costs in Italy, while they are falling in countries like Spain and Greece.
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At the rate things are going, the yuan will reach parity against the dollar, measured by unit labor costs, about two years from now, possibly sooner.
Moreover, the trend growth in unit labor costs is less than 1% annualized, meaning there is a cap on wages which is a drag on consumer spending.
The thinning payrolls led the fourth-quarter productivity rose by 3.2%, ahead of the 2.0% consensus estimate, with unit labor costs rising by a moderate 1.8% on an annualized basis.
In a more encouraging sign, fourth-quarter productivity rose by 3.2%, ahead of the 2.0% consensus estimate, with unit labor costs rising by a moderate 1.8% on an annualized basis.
And today's report on productivity and expenses showed that unit labor costs grew 4.2% from the first quarter, above the consensus of 3.8%--nearly four times the growth rate of productivity.
Meanwhile, U.S. unit labor costs in manufacturing, where the head-to-head competition for jobs lies, have been on a steady downward trend, because productivity growth has been strong and wage increases moderate.
There are "worries and fears" in Southern European countries that their efforts to reduce unit labor costs under a fixed exchange rate will "melt like snow in the sun, " Ms. Merkel said.
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Underlying productivity trends appear generally favorable, despite the recent slowing in some measures, and the markup of prices over unit labor costs is high by historical standards, so such an outcome is certainly possible.
He believes that positive supply-side forces will continue to damp the impact of strong demand on output prices and that productivity gains will continue to damp the effect of higher wages on unit labor costs.
It will be very hard and very costly to reduce other cost competitiveness barriers significantly enough to compensate for this stratospheric rise in unit labor costs, even as every move in this direction is worth taking.
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Conservatively speaking, then, it appears that over the past couple of years, the real exchange rate of the yuan, deflated by unit labor costs, has been appreciating against the dollar at a rate of something like 15 percent per year.
And in dollar terms, given the loss of productivity suffered by the Brazilian economy given substantial appreciation in their currency, unit labor costs have grown by 110% since 2005. (Read No Credit Bubble In Brazil, Just Dangerous Consumer Debt Burden).
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