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by Tom Moeller November 6, 2014
Nonfarm productivity increased at a 2.0% annual rate last quarter (0.9% y/y) following a 2.9% Q2 gain, revised from 2.5%. Real output increased at a 4.4% rate (3.0% y/y) while hours worked gained 2.3% (2.1% y/y). Compensation per hour increased a steady 2.3% (3.3% y/y), but when adjusted for inflation it improved 1.2% (1.4% y/y). The improvement in productivity caused unit labor costs to increase just 0.3% in Q3 (2.4% y/y) following a 0.5% decline. The Q3 productivity gain outpaced expectations for a 1.1% rise in the Action Economics Forecast Survey. A 0.8% rise in unit labor costs was expected.
Manufacturing sector worker productivity rose at a steady 3.2% rate (2.8% y/y) after a 3.5% rise. Output grew 4.1% (4.4% y/y) after a 7.1% gain, while hours worked improved 0.8% (1.5% y/y) following a 3.4% Q2 rebound. Worker compensation per hour increased 2.5% (3.4% y/y). Adjusted for price inflation, compensation gained 1.4% (1.6% y/y), recovering a 1.4% decline during Q2. Unit labor costs fell 0.7% (+0.6% y/y) following a 1.8% decline.
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,%) | Q3'14 | Q2'14 | Q1'14 | Q2 Y/Y | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | 2.0 | 2.9 | -4.5 | 0.9 | 0.9 | 1.0 | 0.1 |
| Compensation per Hour | 2.3 | 2.3 | 6.6 | 3.3 | 1.1 | 2.7 | 2.2 |
| Unit Labor Costs | 0.3 | -0.5 | 11.6 | 2.4 | 0.2 | 1.7 | 2.1 |
| Manufacturing Sector | |||||||
| Output per Hour (Productivity) | 3.2 | 3.5 | 3.2 | 2.8 | 2.3 | 1.9 | 1.0 |
| Compensation per Hour | 2.5 | 1.6 | 8.9 | 3.4 | 0.6 | 1.7 | 1.7 |
| Unit Labor Costs | -0.7 | -1.8 | 5.5 | 0.6 | -1.6 | -0.2 | 0.8 |
