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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller March 7, 2019
Output per hour in the nonfarm business sector grew 1.9% (SAAR) in Q4'18, an increase fairly stable with the Q3 gain. During the last four quarters, productivity growth picked up to 1.8%, the quickest rate of increase in three years. A 1.6% Q4 rise had been expected in the Action Economics Forecast Survey. The latest increase reflected a 3.1% rise (3.7% y/y) in real output and a 1.2% increase (1.9% y/y) in hours worked.
The gain in productivity was accompanied by a 2.0% increase in unit labor costs. It followed a 1.6% rise in Q3. The 1.0% gain for the full year compared to a 2.2% increase during 2017. A 1.7% Q4 rise had been expected. Compensation growth remained solid at 3.9% (2.8% y/y) after a 3.5% rise.
In the manufacturing sector, productivity increased 2.0% (1.0% y/y), the quickest rate of growth in four quarters. It reflected a 2.7% rise (2.9% y/y) in real output accompanied by a 0.8% gain (1.9% y/y) in hours worked.
Unit labor costs in the factory sector increased 2.2% (0.8% y/y), following a 1.8% gain. The y/y rise compared to a 5.0% peak in early 2015. Compensation per hour strengthened 4.3% (1.8% y/y), the strongest increase since Q1'18.
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, %) | Q4'18 | Q3'18 | Q2'18 | Q4'18 Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Nonfarm Business Sector | |||||||
Output per Hour (Productivity) | 1.9 | 1.8 | 2.8 | 1.8 | 1.3 | 1.1 | 0.2 |
Compensation per Hour | 3.9 | 3.5 | -0.1 | 2.8 | 2.7 | 3.4 | 1.1 |
Unit Labor Costs | 2.0 | 1.6 | -2.8 | 1.0 | 1.4 | 2.2 | 0.9 |
Manufacturing Sector | |||||||
Output per Hour (Productivity) | 2.0 | 1.0 | 1.2 | 1.0 | 0.8 | 0.7 | 0.3 |
Compensation per Hour | 4.3 | 2.8 | -5.0 | 1.8 | 1.7 | 3.4 | 0.6 |
Unit Labor Costs | 2.2 | 1.8 | -6.1 | 0.8 | 0.9 | 2.6 | 0.3 |