Recent Updates
- New Zealand: Export and Import Price Indexes (Q4)
- US: Construction (Jan)
- JPMorgan Global Manufacturing PMIs (Feb)
- Manufacturing PMIs: Japan, China, Brazil, Canada, US, Colombia, Mexico, Global, Developed & Emerging Mkts (Feb)
- more updates...
Economy in Brief
NABE Projects Firm Growth in 2022, as in 2021
The NABE expects 4.0% real GDP growth in 2022 following a 4.8% rise during 2021...
U.S. Construction Spending Strengthens Again in January
Building activity continues to strengthen...
Manufacturing PMIs Are Strengthening More in the Developed World
PMIs largely are improving in February...
U.S. Personal Income & Spending Surge With Stimulus Payments in January
Personal income jumped 10.0% (13.1% y/y) last month...
Chicago Business Barometer Declines Sharply in February
The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller November 3, 2005
Growth in non-farm labor productivity of 4.1% last quarter was nearly double the upwardly revised growth during the prior quarter and easily surpassed Consensus expectations for a 2.5% rise. The increase lifted the year on year growth in worker productivity to 3.0%, its strongest since 2Q '04.
Output growth of 4.2% (4.2% y/y) was down slightly from a 4.4% increase during 2Q while hours worked grew a slight 0.1% (1.2% y/y).
The Bureau of labor Statistics indicated that the effects of Hurricanes Katrina & Rita could not be separately identified but that the effects were imbedded in the 3Q figures covering output, hours and compensation.
Unit labor costs fell 0.5%, the first quarterly decline since 2Q '04. The decline stemmed both from the strength in productivity as well as a moderate 3.6% (5.8% y/y) rise in compensation costs which was the slowest since 2Q '04.
The implicit price deflator rose 3.3% (2.9% y/y) and the increase lifted the ratio of prices to unit labor costs to its highest since early last year. During the last ten years there has been a 58% correlation between the ratio and the y/y growth in corporate profits.
Factory sector productivity growth surged 4.5% (4.7% y/y) after a 3.6% rise during 2Q. Manufacturing compensation grew just 2.9% (7.2% y/y) which allowed unit labor costs to fall 1.6% (+2.5% y/y), the first decline since 2Q '04.
Nonfinancial corporate sector productivity growth during 2Q was revised down to 6.3% (6.2% y/y) from 6.8% reported previously. Nevertheless, unit labor costs still fell 2.4% (+0.4% y/y) versus the initial estimate of a 2.6% decline. Output for this measure is gleaned from the income side of the National Income & Product Accounts (NIPA) as opposed to the non-farm output figures which are derived from the output side of the NIPA. Factory sector output is derived from the industrial production measures compiled by the Federal Reserve Board.
Non-farm Business Sector (SAAR) | 3Q '05 | 2Q '05 | Y/Y | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Output per Hour | 4.1% | 2.1% | 3.0% | 3.4% | 3.8% | 4.0% |
Compensation | 3.6% | 4.0% | 5.8% | 4.5% | 4.0% | 3.5% |
Unit Labor Costs | -0.5% | 1.8% | 2.7% | 1.1% | 0.2% | -0.5% |