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Economy in Brief
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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller February 1, 2018
Output per hour in the nonfarm business sector slipped at a 0.1% annual rate during Q4'17 following a 2.7% Q3 rise, revised from 3.0%. It was the first decline in productivity since Q1'16. A 1.2% rise had been expected in the Action Economics Forecast Survey. Output rose at a 3.2% rate (3.2% y/y) after a 4.0% increase during Q3, while hours-worked strengthened 3.3%% (2.1% y/y). During all of 2017, productivity increased 1.2%, up from the 0.7% average during the last five years.
Unit labor costs increased at a 2.0% rate (1.3% y/y) after a 0.1% slip, revised from -0.2%. A 0.9% rise had been expected. During the last five years, unit labor costs rose 1.2% on average. Compensation costs increased 1.8% (2.4% y/y) following an unrevised 2.7% gain. During the last five years, compensation costs have risen at a 1.9% rate on average.
In the manufacturing sector, productivity surged at a 5.7% annual rate last quarter following a 4.9% decline, revised from -4.4%. Output surged 7.3% last quarter (1.7% y/y) while hours-worked lengthened 1.5% (1.6% y/y). During all of last year, factory sector productivity rose 0.7% compared to a 0.4% five-year average.
Unit labor costs in the factory sector declined at a 3.7% rate (+1.1% y/y) following a 5.4% rise. During all of last year unit labor costs rose 0.9% compared to a 1.1% increase during the last five years. Compensation per hour grew 1.8% (2.2% y/y) following a 0.2% rise. During the last five years, compensation costs rose 1.6% on average.
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, %) | Q4'17 | Q3'17 | Q2'17 | Q4'17 Y/Y | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
Nonfarm Business Sector | |||||||
Output per Hour (Productivity) | -0.1 | 2.7 | 1.5 | 1.1 | 1.2 | -0.1 | 1.3 |
Compensation per Hour | 1.8 | 2.7 | 0.3 | 2.4 | 1.5 | 1.0 | 3.1 |
Unit Labor Costs | 2.0 | -0.1 | -1.2 | 1.3 | 0.2 | 1.1 | 1.8 |
Manufacturing Sector | |||||||
Output per Hour (Productivity) | 5.7 | -4.9 | 3.6 | 1.1 | 0.7 | 0.4 | 0.2 |
Compensation per Hour | 1.8 | 0.2 | 2.3 | 2.2 | 1.6 | 0.7 | 2.5 |
Unit Labor Costs | -3.7 | 5.4 | -1.2 | 1.1 | 0.9 | 0.3 | 2.2 |