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Economy in Brief
Surging Imports Send the EMU Trade Scene Deeper into Deficit
The trade balance for the Euro Area fell sharply to 17.5 billion euros in March...
U.S. Import Prices Hold Steady While Export Prices Rise in April
Import prices held steady m/m (+12.0% y/y) in April...
EMU IP Drops Month-to-Month and Year-over-Year
Industrial output among EMU members fell by 1.8% month-to-month in March...
U.S. Producer Price Inflation Moderates in April
The Producer Price Index for Final Demand increased 0.5% during April...
U.S. Housing Affordability Plunges in March
Affordable homes are in short supply...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation & Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
"Core" GDP Suggests Economy Gained Momentum in Q1:2022
by Sandy Batten March 3, 2022
• 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.
Productivity & Costs (SAAR, %) | Q4'21 (Rev) | Q4'21 (Adv) | Q3'21 | Q2'21 | Q4'21 Y/Y | 2021 | 2020 | 2019 |
---|---|---|---|---|---|---|---|---|
Nonfarm Business Sector | ||||||||
Output per Hour (Productivity) | 6.6 | 6.6 | -3.9 | 3.2 | 1.9 | 1.9 | 2.4 | 2.1 |
Compensation per Hour | 7.5 | 6.9 | 6.2 | 9.2 | 5.5 | 5.4 | 7.0 | 3.9 |
Unit Labor Costs | 0.9 | 0.3 | 10.6 | 5.8 | 3.5 | 3.5 | 4.5 | 1.8 |
Manufacturing Sector | ||||||||
Output per Hour (Productivity) | -0.1 | -0.8 | -2.4 | 9.5 | 1.3 | 3.2 | 0.3 | -1.4 |
Compensation per Hour | 1.3 | 3.4 | -0.8 | 11.2 | 2.9 | 4.0 | 6.9 | 2.8 |
Unit Labor Costs | 1.4 | 4.2 | 1.7 | 1.6 | 1.5 | 0.7 | 6.6 | 4.3 |