The unit cost index reflects the relative, average costs of the national industry for the production of a conditional product.

In a broad sense, the parameter characterizes trends of the country's production development in conjunction with other productivity indicators: wages, labor productivity, employment of the population. In a narrow interpretation, this is the cost of production, since the formula takes into account all the costs incurred by the enterprise.

This is an important indicator used by economists to assess the efficiency of national production – the resulting cost of production is correlated with the national GDP. The Ministry of Economy evaluates the dynamics of growth/fall of wages and Unit Labor Cost. An advance in wages indicates an increase in productivity, an increase in the cost of production without an increase in wages indicates the appearance of expenses related to raw materials or taxes, which is perceived as a negative factor.

In the international sense, Unit Labor Cost characterizes the country's products as a measure of competitiveness. The reduction in the cost of production with other other indices related to production is perceived as an additional incentive for the expansion of national products to foreign markets.

Frequency and format of publication of the product cost index

Unit Labor Cost is published quarterly, the data is processed and published by the U.S. Department of Labor.

The indicator is published approximately on the 10th day of the first month of the quarter at 8-30 EST/17-30 Moscow time before the opening of the US stock markets. The data is received in the form of a percentage change in indicators to the previous period.

The impact of the index on the Forex market

The index has an impact on the exchange rate US dollar, estimated in economic calendars with two of the three signs of significance. Traders consider the published data together with the performance (it is released on the same day).

The growth of both indicators predicts the acceleration of consumer prices with great accuracy. Investors and speculators buy American currency waiting for an increase interest rates, as a reaction The Fed on inflationary processes caused by an increase in consumption. A decrease in the indicators may cause a sell-off of the dollar – the authorities will have to take stimulating and compensatory measures to support the industry.

Discrepancies in the form of an outstripping salary growth in output costs require additional analysis, if this is due to an increase in raw material prices, then the economy may soon enter a stagnation phase. In the conditions of the economic crisis, the decline in wages should be ignored and only the index of the cost of production should be considered.

The indicator data are suitable for medium-and long-term market analysis, in short-term bursts currency trading volatility can cause significant changes to the previous period or a significant difference in the forecast and real values.