Prior was -0.1% (revised to -0.3%)Unit labour costs +1.4% q\/q, fourth consecutive gain (+3.2% y\/y)Goods led the decline (-1.7%); ag\/forestry cratered -8.6%, construction -2.3%<\/p>\n
Statistics Canada says business sector labour productivity fell 0.5% in Q1, the second straight quarterly drop after -0.3% in Q4. The Q4 number was revised down from -0.1% in today’s report. <\/p>\n
We already know that real GDP slipped 0.1% on the quarter. Hours worked rose 0.4%. So Canadian businesses put more hours in and got less out. That’s the whole productivity miss in one sentence \u2014 you’re running harder to stand still.<\/p>\n
The piece that actually matters for the Bank of Canada is buried at the bottom: unit labour costs jumped 1.4% q\/q, the fourth consecutive quarterly increase, and they’re now up 3.2% from a year ago. Productivity falling while hourly compensation rises 0.9% is the textbook recipe for ULC pressure, and it doesn’t sit comfortably next to a central bank that’s likely going to have to raise rates later this year.<\/p>\n
Under the hood, goods-producing led the decline at -1.7%, with agriculture, forestry, fishing and hunting cratering 8.6% as hours blew out 5.6% against a 3.5% output drop. Construction was the other weak spot at -2.3%. Services held up better, edging up 0.3% \u2014 retail trade (+1.5%) and transportation and warehousing (+1.6%) did the heavy lifting on the positive side.<\/p>\n
The market reaction on this report is almost always nil. This is backward-looking Q1 data, already revised to incorporate the May 29 GDP figures, and it’s not on anyone’s trading screen. But it reinforces the structural picture: Canada’s productivity problem hasn’t gone away, ULC is accelerating into a slowing economy, and the BoC’s path is getting more complicated, not less. <\/p>\n","protected":false},"excerpt":{"rendered":"Prior was -0.1% (revised to -0.3%)Unit labour costs +1.4% q\/q, fourth consecutive gain (+3.2% y\/y)Goods led the decline…\n","protected":false},"author":2,"featured_media":459993,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-459992","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/459992","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=459992"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/459992\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/459993"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=459992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=459992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=459992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}