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Economy in Brief

U.S. Labor Productivity Increases Modestly While Compensation Jumps
by Tom Moeller  February 2, 2012

Growth in labor productivity eased last quarter to an expected 0.7% after a revised 1.9% Q3 increase, last month reported as 3.1%. Slower growth in productivity was the story for all of last year with a 0.8% gain after a 4.1% rise in 2010. Output rose at a 3.6% rate (2.3% y/y) and hours worked grew at a 2.9% rate (1.8% y/y).

Compensation growth picked up to 1.9% following two quarters of decline. That rise pulled up unit labor costs at a 1.2% rate. As a result, unit labor costs rose 1.1% for the year, also following two consecutive years of decline.

Factory sector productivity fared no better than the total and fell at a 0.4% rate. That left the full-year gain of 2.8% half that in 2010. Along with a rise in compensation at a 1.2% last quarter, unit labor costs grew 1.6% but were down 1.3% for the year. 

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

Productivity & Costs (SAAR,%) Q4'11 Q3'11 Q2'11 Q4 Y/Y 2011 2010 2009
Nonfarm Business Sector
Output per Hour (Productivity) 0.7 1.9 -0.1 0.5 0.8 4.1 2.3
Compensation per Hour 1.9 -0.3 -0.2 1.7 1.9 2.1 1.6
Unit Labor Costs 1.2 -2.1 -0.1 1.3 1.1 -2.0 -0.7
Manufacturing Sector
Output per Hour -0.4 5.3 -2.1 1.7 2.8 6.0 0.6
Compensation per Hour 1.2 -0.6 -2.1 0.6 1.5 1.6 4.5
Unit Labor Costs 1.6 -5.6 -0.0 -1.1 -1.3 -4.2 4.0
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