Prelim Nonfarm Prod (Q4 2008) Actual 3.2%, Expected 1.0%, Previous 1.5% (Revised from 1.1%)

Prelim Unit Labor Costs (Q4 2008) Actual 1.8%, Expected 3.2%, Previous 2.6% (Revised from 3.6%)

Release Explanation: The productivity per hour compared to the hourly rate of pay. Ahead of the NFP report this pales into significance, it does however provide an idea of wage inflation. Eventually it may impact the Employment Data, adds in part to the CPI numbers, and could eventually affect impact PCE . Any of this impact will be diluted over the time it will take to build. There is very little initial affect on currency valuations from this report.

Trade Desk Thoughts: Non-farm productivity rose at a 3.2% annual rate in the fourth quarter of 2008, the labor Department said today, well above economists' expectations of a 1.0% increase.

The number indicates the economy still retains the ability to grow at a healthy pace, said Matthew Carniol, chief currency strategist at Once the housing market begins to stabilize, the potential for a good recovery is there.

Despite the recession, which began in December of 2007, productively rose 2.8% for all of 2008, the highest in five years. The increase from the fourth quarter of 2007 was 2.7%. Productivity normally falls when the economy is in a contraction.

Unit labor costs rose only 1.8% annualized last quarter. For the year, labor costs increased just 0.7%, an indication that the weakening economy is preventing workers from bargaining for higher pay.

Forex Technical Reaction: S&P futures weakened on the weekly report on new unemployment claims, and were recently down 0.8%. The dollar has gained against the higher-yielding currencies in the last 30 minutes and has declined against the yen.