Global| Sep 02 2009Jump In 2Q U.S. Worker Productivity Revised Up Slightly & Cost Pressures Eased
by:Tom Moeller
|in:Economy in Brief
Summary
Revisions to the figures on 2Q worker productivity were small and as a result cost pressures continue to show a sharp easing. Labor productivity growth in the nonfarm business sector was revised up slightly to 6.6% (AR) from the [...]
Revisions to the figures on 2Q worker productivity were small and as a result cost pressures continue to show a sharp easing. Labor productivity growth in the nonfarm business sector was revised up slightly to 6.6% (AR) from the initial report of a 6.4% surge. It was the strongest increase since the third quarter of 2003 and the gain beat Consensus expectations for no change in estimated growth.
Compensation costs, however, were revised down sharply. They barely rose at a 0.3% rate after a 4.7% 1Q decline. It was revised down versus the initial report of a 2.4% drop. The recent weak figures leave the y/y increase at just 0.7% which continues the downtrend from roughly 4.0% growth back to 2001.
Last quarter, the surge in productivity and the moderation in
labor cost growth combined to drop unit labor costs. The 5.9% q/q
decline was slightly deeper than reported initially and lowered the y/y
change to -1.2%, the first material negative reading since early-2004.
Worker productivity growth in the factory sector was, however, revised down somewhat to 4.9% and that still was the first quarterly increase in over one year. A benefit to workers was seen in a 5.1% rise in 2Q compensation but downward revision to earlier figures lowered the y/y growth to 5.2% from 6.0% reported initially. Nevertheless, the y/y gain was the strongest since late-2003. The combination of strong productivity and firm compensation left the quarterly increase in unit labor cost at a downwardly-revised 0.2%. Still, year-to-year, growth of 6.7% y/y remains a multiple of last year's 2.2% growth.
The productivity & cost figures are available in Haver's USECON database.
Growth Accounting, Potential Output and the Current Recession from the Federal Reserve Bank of San Francisco is available here.
| Nonfarm Business Sector (SAAR, %) | 2Q '09 | 1Q '08 | Y/Y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Output per Hour | 6.6 | 0.3 | 1.9 | 1.8 | 1.9 | 0.9 |
| Compensation per Hour | 0.3 | -4.7 | 0.7 | 2.8 | 4.2 | 3.8 |
| Unit Labor Costs | -5.9 | -5.0 | -1.2 | 1.0 | 2.3 | 2.8 |
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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