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Economy in Brief
Import Prices Continue Their Decline; Both Oil and Nonoil Prices Move Lower
Import prices fell a greater-than-expected 0.5% during January (-1.7% year-on-year)...
Empire State Manufacturing Activity Improves Modestly
The Empire State Manufacturing Index of General Business Conditions rose to 8.8 during February...
EMU-16 Trade Flows and Balance
EMU-wide exports ticked lower in December as imports were flat...
U.S. Retail Sales Exhibit Extensive Weakness
Total retail sales declined 1.2% (+2.3% y/y) during December...
U.S. Producer Prices Decline; Core PPI Rises
The headline Final Demand Producer Price Index edged down 0.1% for the second consecutive month in January (+2.0% y/y)...
by Gerald D. Cohen September 6, 2018
Output per hour in the nonfarm business sector grew at an unrevised 2.9% seasonally adjusted annual rate in Q2'18 (1.3% year-on-year), following a 0.3% gain in Q1. In Q4'17 productivity declined at a 0.3% pace. The consensus in the Action Economics Forecast Survey looked for an increase of 3.0% in Q2. Nonfarm business output rose at a slightly faster 5.0% pace (3.5% y/y) in the second quarter, but this was offset by the small upward revision to hours which increased 2.0% (2.2% y/y).
Unit labor costs fell at slightly faster 1.0% rate in the second quarter (1.9% y/y) following a 3.4% gain in Q1. The Action Economics Survey expected an unrevised 0.9% decline the second quarter. The downward revision to costs resulted from compensation increasing 1.9% (vs. 2.0%) in Q2 (3.2% y/y), after 3.8% growth in the first quarter.
In the manufacturing sector, productivity increased at an upwardly revised 1.5% pace (was 0.9%) in the second quarter (unchanged from a year ago) following a 0.8% decline in Q1. Output increased at a faster 3.0% rate (was 1.9%) in Q2 (2.1% y/y) after a 2.0% gain in Q1. Hours worked grew 1.5% in Q2 (2.2% y/y) following 2.9% growth in Q1.
Unit labor costs in the factory sector declined at a 0.2% rate in Q2 (2.5% y/y), a downward revision from the 0.6% previously reported gain. In the first quarter costs grew an unrevised 5.5%. Compensation grew 1.3% in Q2 (2.5% y/y) after a 4.6% gain 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, %) | Q2'18 | Q1'18 | Q4'17 | Q2'18 Y/Y | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
Nonfarm Business Sector | |||||||
Output per Hour (Productivity) | 2.9 | 0.3 | -0.3 | 1.3 | 1.1 | 0.1 | 1.3 |
Compensation per Hour | 1.9 | 3.8 | 1.9 | 3.2 | 3.4 | 1.1 | 3.1 |
Unit Labor Costs | -1.0 | 3.4 | 2.3 | 1.9 | 2.2 | 0.9 | 1.8 |
Manufacturing Sector | |||||||
Output per Hour (Productivity) | 1.5 | -0.8 | 4.4 | 0.0 | 0.7 | 0.3 | -1.5 |
Compensation per Hour | 1.3 | 4.6 | 1.6 | 2.5 | 3.3 | 0.6 | 2.5 |
Unit Labor Costs | -0.2 | 5.5 | -2.7 | 2.5 | 2.6 | 0.3 | 4.1 |