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Economy in Brief

U.S. Productivity is Revised Higher Following Two Quarters of Decline
by Tom Moeller  September 2, 2015

Nonfarm productivity growth during Q2'15 was revised higher to 3.3% from 1.3% reported initially (SAAR). Revision to 2.3% growth was expected in the Action Economics Forecast Survey. Last quarter's gain followed two of quarters of decline, which were little-revised. Strengthened productivity growth prompted a 1.4% decline (+1.7% y/y) in unit labor costs, initially reported as a 0.5% rise. A 0.4% decline had been expected. Growth in compensation per hour was unchanged at 1.8% (2.5% y/y) after a 1.5% Q1 rise.

Revisions to the factory sector figures were small. Manufacturing sector worker productivity increased at a 2.3% rate (1.0% y/y), revised from 2.5%. The gain also followed two quarters of modest decline. Unit labor costs fell 2.2% (+1.0% y/y), the fourth decline in the last five quarters. Compensation edged 0.1% higher after a 2.1% decline in Q1.

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

Productivity & Costs (SAAR,%) Q2'15 Q1'15 Q4'14 Q2 Y/Y 2014 2013 2012
Nonfarm Business Sector
Output per Hour (Productivity) 3.3 -1.1 -2.2 0.7 0.7 0.0 0.9
Compensation per Hour 1.8 1.5 3.4 2.5 2.7 1.1 2.7
Unit Labor Costs -1.4 2.6 5.7 1.7 2.0 1.1 1.7
Manufacturing Sector
Output per Hour (Productivity) 2.3 -0.6 -0.4 1.0 1.3 0.7 0.7
Compensation per Hour 0.1 -2.2 4.3 1.2 2.7 0.2 1.8
Unit Labor Costs -2.2 -1.6 4.7 0.2 1.4 -0.5 1.0
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