Canadian labour productivity numbers came in strong for the second quarter, up 0.9%.

This is down slightly from the 1.1% gain recorded in the first quarter, and it marked six consecutive quarters of growth. “The Canadian economy recorded an all-round stellar performance in the second quarter with strong gains in output, employment and productivity,” says Bank of Montreal.

BMO notes that strong productivity growth has been accompanied by steady, but more moderate gains in compensation, and unit labour costs have declined for three consecutive quarters. In Q2 unit labour costs fell 0.2%.

BMO says that in the most recent quarter Canada’s productivity performance outpaced the U.S. “However, on a year-over year basis the U.S. continues to outperform Canada with a 4.8% gain compared to Canada’s 3.0% gain. Though in Canada, recent productivity growth has occurred despite strong employment growth while in the U.S. gains in productivity have partly reflected declines in hours worked.”

RBC Financial Group agrees with BMO, noting that the differences “largely reflect the composition of growth in the two countries. In the U.S. much of the growth has been coming from increased productivity as hours worked have steadily declined since the beginning of 2001. In Canada, real growth has been coming more from an increase in hours worked than from productivity.” And it concludes that the differences argue for divergent monetary policy, “with the Bank of Canada on a higher look-out for inflation than the Fed”.