Nonfarm Productivity for the 2nd quarter decreased at a 0.9% annual rate, according to preliminary data from the BLS, against the expected 0.3% increase. This was the first decline since a 0.1% decrease in the fourth quarter of 2008 and the largest decrease since a 1.3% decrease in the third quarter of 2008 Nonfarm productivity increased by 3.9% in the first quarter of 2010, revised upward from 2.8%, after increasing by 6.3% and 7.8% in the 4th and 3rd quarters of 2009. From the second quarter of 2009 to the second quarter of 2010, both productivity and output increased 3.9 percent; hours were unchanged. Unit Labor Costs increased by 0.2% in the 2nd quarter, based on preliminary data, less than the expected 1.5% decline, following a 3.7% decrease in the figure reported in the 1st quarter of 2010, revised further downward from the initial 1.3% decline.
Wholesale Inventories are expected today at 10:00 AM EST. Wholesale Inventories had increased by 0.5% in May to the $398.8 billion level and were down 2.1% from a year ago Wholesale Sales had decreased by 0.3% in May to $350.6 billion, but were up 15.1% over the year. Sales of durable goods were up by 0.5% and sales of nondurable goods were down 1.0% over the month. The Inventory/Sales ratio was at 1.14, lower than the 1.34 ratio in May of 2009.
The FOMC Policy Statement will be released today at 2:15 PM EST, which will conclude the 2 day meeting of the Board of Governors. The topic for discussion is the Fed’s Beige Book, which indicated that economic conditions had continued to improve since the last report. Most of the Federal Reserve Districts noted some increased activity or improvement in conditions, although a number of these described the pace of growth as modest. Cleveland and Kansas City Districts reported that the level of economic activity generally held steady while Atlanta and Chicago said that the pace of economic activity had slowed recently. In the last policy statement released on June 23, the FOMC had decided to maintain the federal funds target rate within a range of 0 to 0.25%.
Upcoming Releases
Wholesale Inventories (08/10 at 10:00 AM EST)
FOMC Policy Statement (08/10 at 2:15 PM EST)
Trade Balance (08/11 at 8:30 AM EST)
Crude Inventories (08/11 at 10:30 AM EST)
