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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
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 |