• Nonfarm productivity posted a still-solid 6.6% annual rate advance.

• Compensation growth revised up meaningfully.

• Unit labor cost growth revised up on upward compensation revision.

The 6.6% q/q saar increase reported for nonfarm business sector productivity in Q4 in the advance report was not revised in the second estimate. The Action Economics Forecast Survey had looked for a slight upward revision to 6.7%, reflecting the previously reported modest upward revision to Q4 GDP growth. Compared with a year ago, productivity was up 1.9%, the same as in the advance report.

The quarterly growth of compensation was revised up to 7.5% q/q saar from 6.9% in the advance report. Compensation rose 5.5% from Q4 2020. The Q4 revision to compensation pushed the quarterly growth of unit labor costs (the difference between compensation growth and productivity growth) up to 0.9% q/q from 0.3% previously reported. The Action Economics Forecast Survey had expected no revision to unit labor cost growth. Unit labor costs are up 3.5% from a year ago.

Nonfarm business output growth was revised down slightly to a 9.1% annualized pace from 9.2% in the advance report. Compared with a year ago, output was up 7.0%. Growth of hours worked was unrevised for Q4 at 2.4% q/q saar. For the four quarters of 2021, hours worked increased 4.9%.

In the manufacturing sector, Q4 output growth was revised up a full percentage point to 5.8% q/q saar from 4.8% in the advance report. The rise in hours worked was also revised up but more modestly, to 5.8% from 5.6%. This combination led to a significant upward revision in manufacturing productivity growth, to -0.1% from -0.8% in the advance report. In contrast to the nonfarm business sector, growth of manufacturing compensation was revised down to 1.3% from 3.4%. This slowed the growth in unit labor costs to 1.4% from 4.2% in the advance report/

Compensation and labor costs figures are available in Haver's USECON database. The expectations figure is in the AS1REPNA database.