Recent Updates

  • US: Consumer Credit, Wholesale Trade (Oct), Consumer Sentiment (Dec- prelim), Employment Situation (Nov)
  • Global Sector PMI (Nov)
  • US: Consumer Sentiment (Dec-prelim)
  • Lebanon: Public Debt (Oct-Prelim)
  • more updates...

Economy in Brief

U.S. Productivity Slips; Unit Labor Costs Remain Firm
by Tom Moeller  November 6, 2019

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.

Productivity & Costs (SAAR, %) Q3'19 Q2'19 Q1'19 Q3'19 Y/Y 2018 2017 2016
Nonfarm Business Sector
Output per Hour (Productivity) -0.3 2.5 3.5 1.4 1.3 1.3 0.3
Compensation per Hour 3.3 4.9 9.4 4.5 3.1 3.5 1.1
Unit Labor Costs 3.6 2.4 5.7 3.1 1.8 2.1 0.8
Manufacturing Sector
Output per Hour (Productivity) -0.1 -2.4 1.2 -0.1 0.7 1.2 -0.1
Compensation per Hour 3.5 4.4 8.2 4.8 2.2 3.5 0.5
Unit Labor Costs 3.6 6.9 6.9 4.9 1.4 2.3 0.6
close
large image