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Economy in Brief

U.S. Worker Productivity Growth Is Revised Lower
by Tom Moeller  March 6, 2014

Nonfarm business sector productivity improved 1.8% last quarter (1.3% y/y), revised down from last month's estimate of 3.2% growth. That followed a little-revised Q3 increase of 3.5%. The gain fell short of expectations for a 2.5% rise in the Action Economics Forecast Survey. For all of last year productivity rose 0.5%, down from the 1.5% rise in 2012. A downward revision to output growth to 3.4% (2.9% y/y) from 4.9% estimated earlier accounted for the revision to productivity. That accompanied last week's revision to GDP growth. Hours worked increased a little-changed 1.6% (1.7% y/y). Compensation rose 1.7% (0.3% y/y) but when adjusted for inflation it increased 0.8% in Q4 (-0.9% y/y). Unit labor costs fell minimally, compared to the initial estimate of a 1.6% fall. They were down a lessened 0.9% y/y.

In the factory sector, worker productivity increased at a 1.3% rate (1.9% y/y), revised down from 2.0%. For the year productivity rose 1.8%. Output surged at a lessened 5.0% rate (3.0% y/y) while hours worked gained 3.6% (1.1% y/y). Worker compensation increased at a 1.2% rate (0.9% y/y). Adjusted for price inflation, compensation edged 0.4% higher (0.1% y/y). Unit labor costs slipped a lessened 0.1% (-1.0% y/y) in Q4 and for all of last year costs declined 0.9%. All of the productivity & cost figures were revised back to 2009.

The productivity & cost figures are available in Haver's USECON database. The expectations figure is from Action Economics and is the AS1REPNA database.

Productivity & Costs (SAAR,%) Q4'13 Q3'13 Q2'13 Q4 Y/Y 2013 2012 2011
Nonfarm Business Sector
Output per Hour (Productivity) 1.8 3.5 1.8 1.3 0.5 1.5 0.5
Compensation per Hour 1.7 1.3 3.8 0.3 1.6 2.6 2.5
Unit Labor Costs -0.1 -2.1 2.0 -0.9 1.1 1.2 2.0
Manufacturing Sector
Output per Hour 1.3 0.2 2.5 1.9 1.8 1.8 1.0
Compensation per Hour 1.2 0.5 2.9 0.9 0.9 1.9 1.3
Unit Labor Costs -0.1 0.2 0.4 -1.0 -0.9 0.1 0.4
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