Global| Jun 01 20061Q U.S. Productivity Revised Up
by:Tom Moeller
|in:Economy in Brief
Summary
Non-farm labor productivity growth during 1Q '06 was revised up to 3.7% from the 3.2% reported last month. The updated figure fell short of Consensus expectations for a revision to 4.0%. Faster growth in output accounted for the [...]
Non-farm labor productivity growth during 1Q '06 was revised up to 3.7% from the 3.2% reported last month. The updated figure fell short of Consensus expectations for a revision to 4.0%.
Faster growth in output accounted for the revision and it is now estimated to have risen 6.5% (4.2% y/y) versus the earlier estimate of 5.8% growth. The estimate of hours worked was little changed at 2.7% (1.7% y/y).
Unit labor cost growth was revised down sharply to 1.6% reflecting the upward revision to productivity as well as a downward revision to compensation growth to 5.3%. Cost pressure in 4Q '05 also was revised down sharply due to a revised decline in compensation.
Factory sector productivity growth was slightly slower than initially estimated at 3.8% (4.0% y/y) versus the initial estimate of 4.2%. As a result of an upward revision to compensation growth to 1.9% (2.1% y/y) from 1.5%, unit labor costs in the factory sector only declined 1.9% (-1.8% y/y) instead of the initial estimate of a 2.6% drop.
A Leaner, More Skilled U.S. Manufacturing Workforce from the Federal Reserve Bank of New York is available here.
This first estimate of nonfinancial corporate sector productivity indicated a 3.7% (3.7% y/y) gain after 2.4% growth during 4Q. Unit labor costs rose 1.3% q/q but since the moderate rise followed a 3.2% 4Q decline, costs remained down 0.8% from the year earlier level.
| Non-farm Business Sector (SAAR) | 1Q' 06 (Revised | 1Q '06 | 4Q '05 | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|---|
| Output per Hour | 3.7% | 3.2% | -0.3% | 2.5% | 2.7% | 3.4% | 3.9% |
| Compensation per Hour | 5.3% | 5.7% | -0.9% | 2.8% | 5.1% | 4.6% | 4.0% |
| Unit Labor Costs | 1.6% | 2.5% | -0.6% | 0.3% | 2.3% | 1.1% | 0.0% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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