Labor productivity contracts for the second straight quarter

Productivity still contracted though unemployment edged down to 2%.

According to OCBC, on the labour market, the unemployment rate had edged down to 2% but labour productivity contracted for the second straight quarter as employment accelerated to 29.2k, and this would be something to keep a close eye on.

Here's more from OCBC:

The good news is that the unit business cost of business eased from Q1’s 5.4% to 3.7% in Q2, but the overall unit labour cost and headline CPI inflation accelerated to 5.4% and 5.3%, respectively in Q2. Near-term the challenges of a slowing domestic economy and still elevated inflation remain intact, both for business and consumers.

Barring unforeseen shocks, MTI expects full year growth of 1.5-2.5% as achievable. Our current 2.3% full year forecast is within the narrowed official forecast range of 1.5-2.5%, and is predicated on an incremental H2 pickup as significant monetary policy stimulus in the major central banks take effect.