Recent Updates
- Japan: NCI Economic Activity Index (Aug)
- US: NAHB/Wells Fargo Housing Market Index (Aug)
- Canada: Wholesale trade, MSIO (June)
- Pakistan: Foreign Currency Deposits and Utilization (JUL)
- US: Empire State Mfg Survey (Aug)
- more updates...
Economy in Brief
U.S. Housing Affordability Declines Further in June
The NAR Fixed Rate Mortgage Housing Affordability Index fell 3.6% in June...
EMU Output Makes Solid Gain in June
The European Monetary Union posted a 0.7% increase for industrial output in June...
U.S. Producer Prices Fall During July; Core Increase Weakens
The Producer Price Index for Final Demand fell 0.5% during July...
U.S. Unemployment Claims Continue on an Uptrend
Initial claims for unemployment insurance filed in the week ended August 6 rose 14,000 to 262,000...
RICS Survey Points to More U.K. Housing Sector Weakness
The survey of housing market conditions in the U.K. continues to show strength in prices versus weakness...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller June 2, 2005
Non-farm labor productivity growth about matched Consensus expectations and was revised higher to 2.9%. A surprise, however, was that compensation costs were revised up in 1Q to 6.3% and up sharply to 10.4% in 4Q04.
As a result of revisions to compensation, unit labor cost growth accelerated to 4.3% versus 1Q '04 versus an upwardly revised 0.8% during 2004.
Productivity in the nonfinancial corporate sector rose 2.7% (4.9% y/y) following 9.0% growth during 4Q '04. Compensation, however, rose 6.8% after a 10.2% 4Q rise and caused unit labor costs to rise 4.1% (2.0% y/y). The ratio of prices to unit labor costs fell to the lowest level in a year, confirming the crimp on 1Q profits.
Does Wage Inflation Cause Price Inflation? from the Federal Reserve Bank of Cleveland can be found here.
Non-farm Business Sector (SAAR) | 1Q '05 (Revised) | 1Q '05 | 4Q '04 | Y/Y | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|---|
Output per Hour | 2.9% | 2.6% | 2.3% | 2.6% | 4.0% | 4.3% | 4.3% |
Compensation | 6.3% | 4.8% | 10.2% | 7.0% | 4.8% | 4.0% | 3.2% |
Unit Labor Costs | 3.3% | 2.2% | 7.7% | 4.3% | 0.8% | -0.3% | -1.1% |