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Economy in Brief
U.S. Trade Deficit Widens to $68.2 Billion in January
The U.S. trade deficit in goods and services widened to $68.2 billion in January...
U.S. Factory Orders & Shipments Rise Again in January
Manufacturing activity is strengthening. Factory orders rose 2.6% (2.8% y/y) in January...
U.S. Initial Unemployment Insurance Claims Rise Just 9,000
Initial claims for unemployment insurance rose modestly by 9,000 to 745,000 in the week ended February 27...
U.S. Productivity's Decline Lessened in Q4'20; Reverses Q3 Increase
Revisions to nonfarm business sector productivity indicated a 4.2% decline during Q4'20...
EMU Unemployment Rate Steadies in January
The overall EMU unemployment rate was steady in January, off peak, but still elevated...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller November 5, 2020
• Growth in output per hour remained firm for second straight quarter.
• Unit labor costs decline, reversing Q2 rise.
Nonfarm business sector productivity increased 4.9% (SAAR) during Q3'20 following a 10.6% Q2 increase, revised from 10.1%. A 4.7% gain had been expected in the Action Economics Forecast Survey. The two increases raised y/y productivity growth to 4.1%, the swiftest since Q1 2010. Real output improved 43.5% (-3.4% y/y) as it bounced back from a 36.8% decline. Hours worked strengthened 36.8% (-7.2% y/y) after falling 42.9%. Strength in productivity lowered unit labor costs by 8.9% (+2.5% y/y), reversing an 8.5% Q2 gain, revised from 9.0%. A 9.7% decline had been expected. Hourly compensation declined 4.4% (+6.7% y/y) after rising 20.0% in Q2.
Factory sector productivity increased a record 19.0% (0.7% y/y) as it bounced back from a 14.3% Q2 decline, revised from -14.6%. Durable manufacturing productivity surged 44.2%last quarter (0.4% y/y) following a 26.9% decline while nondurable manufacturing productivity improved 1.2% (0.5% y/y). Total manufacturing unit labor costs declined 18.2% (+3.8% y/y) during the third quarter after rising 28.4% in Q2, revised from 29.1%. Compensation fell 2.6% (+4.6% y/y) following three quarters of strong growth.
The productivity and labor cost figures are available in Haver's USECON database.
Productivity & Costs (SAAR, %) | Q3'20 | Q2'20 | Q1'20 | Q3 Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Nonfarm Business Sector | |||||||
Output per Hour (Productivity) | 4.9 | 10.6 | -0.3 | 4.1 | 1.7 | 1.4 | 1.2 |
Compensation per Hour | -4.4 | 20.0 | 9.2 | 6.7 | 3.6 | 3.4 | 3.5 |
Unit Labor Costs | -8.9 | 8.5 | 9.6 | 2.5 | 1.9 | 1.9 | 2.2 |
Manufacturing Sector | |||||||
Output per Hour (Productivity) | 19.0 | -14.3 | 1.6 | 0.7 | 0.1 | 0.3 | -0.4 |
Compensation per Hour | -2.6 | 10.1 | 6.0 | 4.6 | 2.9 | 2.1 | 3.2 |
Unit Labor Costs | -18.2 | 28.4 | 4.2 | 3.8 | 2.8 | 1.8 | 3.6 |