Productivity in the nonfarm business sector eased 0.3% at an annual rate (+1.4% y/y) during Q3'19 following a 2.5% Q2 rise, revised from 2.3%. It was the first decline in productivity since Q4'15. Expectations had been for a 0.9% rise in the Action Economics Forecast Survey. The decline reflected a 2.1% rise (2.3% y/y) in real output that was accompanied by a lesser 2.4% gain (0.9% y/y) in hours-worked.

The weakness in productivity raised unit labor costs by a 3.6% rate after a 2.4% rise, revised from 2.6%. A 2.2% increase had been expected. The 3.1% y/y gain was accelerated from 1.0% y/y in Q4'18, and the quickest since Q1'14. Compensation per hour rose 3.3% last quarter (4.5% y/y) after a 4.9% Q2 rise.

In the manufacturing sector, productivity eased 0.1% both q/q and y/y. That followed a 2.4% Q2 fall which was revised from -2.2%. The decline reflected a 1.1% rise (-0.5% y/y) in real output that was accompanied by a 1.3% gain (-0.4% y/y) in hours-worked. Unit labor costs in the factory sector strengthened 3.6% (4.9% y/y) after a 6.9% jump. Compensation in the factory sector rose 3.5% (4.8% y/y) following a 4.4% increase.

The productivity & cost figures are available in Haver's USECON database.

Is Rising Concentration Hampering Productivity Growth? from the Federal Reserve Bank of San Francisco can be found here.