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Economy in Brief

U.S. Labor Productivity Is Unrevised
by Tom Moeller  March 3, 2011

As expected, labor productivity in the nonfarm business sector rose an unrevised 2.6% (AR) last quarter and roughly repeated its Q3 increase. For the full year, productivity rose 3.6% and roughly repeated the 2009 increase. Last quarter's rise in productivity reflected a slightly lessened 4.0% quarterly gain (3.6% y/y) in output. The gain in hours held steady at a lowered 1.4% (1.6% y/y).

As the improvement in productivity outpaced an unrevised 1.9% gain in compensation, after two quarters of strength, unit labor costs ticked down an unchanged and expected 0.6%. The decline from last year amounted to 0.2%. For the full year costs fell 1.5%, roughly the same as in 2009.

The factory sector's productivity rose a little-revised 5.9% after a 1.3% Q3 rise. Real output gained 4.4% (6.5% y/y) while hours worked fell 1.4% (+2.2% y/y). The productivity gain lowered unit labor costs by a little-revised 2.7% and by 2.7% y/y as compensation rose 3.1% (1.5% y/y).

The productivity & cost figures are available in Haver's USECON database.

Productivity & Costs (SAAR,%) Q4'10 Q3'10 Q2'10 Q4 Y/Y 2010 2009 2008
Nonfarm Business Sector
  Output per Hour (Productivity) 2.6 2.4 -1.8 1.7 3.6 3.5 1.0
  Compensation per Hour 1.9 2.3 2.9 3.5 2.0 1.9 3.3
  Unit Labor Costs -0.6 -0.1 4.9 -0.2 -1.5 -1.6 2.2
Manufacturing Sector
  Output per Hour 5.8 1.4 5.7 3.6 6.0 2.0 -0.3
  Compensation per Hour 2.8 1.5 4.8 0.5 1.2 5.2 4.0
  Unit Labor Costs -2.9 0.1 -0.8 -3.0 -4.5 3.1 4.3
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