Recent Updates
- Euro area: Flash Consumer Confidence (Apr)
- Ireland: Producer & Wholesale Price Indexes (Mar)
- UK: Capital Issuance (Mar)
- Spain: Trade in Constant Prices, Trade in Goods (Feb)
- Germany: Federal Budget, PPI, Monthly Tax Revenue (Mar), Short-term Indicator (Feb), Public Sector Finance (Q4)
- Colombia: Imports (Feb); Brazil: IPCA-15 (Apr)
- Turkey: Non-Domestic PPI, House Sales, Central Government and Domestic Debt by Instrument, External Debt by Lender, Domestic
- more updates...
Economy in Brief
German PPI Accelerates
The German year-on-year PPI has generally been decelerating since early 2017...
U.S. Leading Economic Indicators Signal Continued Expansion
The Conference Board's Composite Index of Leading Economic Indicators increased 0.3% during March...
Philadelphia Fed Factory Conditions Improve; Prices Jump
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rose to 23.2 during April...
U.S. Initial Claims for Unemployment Insurance Are Little Changed
Initial unemployment insurance claims slipped to 232,000 (-6.1% y/y) during the week ended April 14...
U.K. Retail Sales Fall
U.K. GDP is expected to cool its jets when the first quarter GDP number is released...
by Tom Moeller February 2, 2006
Non-farm labor productivity fell last quarter after a revised 4.5% increase during 3Q. It was the first decline in output per hour since 1Q '01 and followed an average gain of 3.7% during the prior ten quarters. Consensus expectations had been for a 1.5% increase.
Slower output growth accounted for the drop in productivity. The marked slowdown in output to 0.9% (3.6% y/y) from 4.7% during 3Q was accompanied by an acceleration in hours worked to 1.5% (1.2% y/y) from 0.1%.
Compensation costs rose 2.8% after an upwardly revised 3Q increase. As a result, unit labor costs rose 3.5%, the quickest gain in a year.
Factory sector productivity growth rose a firm 3.9% (4.1% y/y) during 4Q following a 3.7% gain during 3Q. Compensation growth slowed to 1.9% (4.1% y/y) from 3.7% and unit labor costs in the factory sector fell 1.9% (0.0% y/y) as a result.
The implicit price deflator for the nonfarm business sector rose 3.2% (3.1% y/y). Since the increase trailed the rise in costs, the ratio of prices to unit labor costs slipped from the record high of the prior quarter. During the last ten years there has been a 60% correlation between the ratio and the y/y growth in operating corporate profits.
Non-farm Business Sector (SAAR) | 4Q '05 | 3Q '05 | Y/Y | 2005 | 2004 | 2003 |
---|---|---|---|---|---|---|
Output per Hour | -0.6% | 4.5% | 2.3% | 2.7% | 3.4% | 3.8% |
Compensation | 2.8% | 4.1% | 3.3% | 5.2% | 4.5% | 4.0% |
Unit Labor Costs | 3.5% | -0.5% | 1.0% | 2.4% | 1.1% | 0.2% |