Global| Feb 03 2011U.S. Labor Productivity Improves Further, Lowering Costs
by:Tom Moeller
|in:Economy in Brief
Summary
Labor productivity in the nonfarm business sector rose 2.6% (AR) and roughly repeated its Q3 increase. The rise exceeded Consensus expectations for a 2.0% increase. Nevertheless, y/y growth decelerated to 1.7% following its upward [...]
Labor productivity in the nonfarm business sector rose 2.6% (AR) and
roughly repeated its Q3 increase. The rise exceeded Consensus expectations
for a 2.0% increase. Nevertheless, y/y growth decelerated to 1.7%
following its upward surge following the recession. For the full year,
productivity rose 3.6% and roughly repeated the 2009 increase. Last quarter's rise in productivity reflected a
4.5% quarterly gain (3.7% y/y) in output which was improved from the 3.8%
Q3 rise. The
gain in hours held roughly steady at 1.8% (2.0% y/y).
As the improvement in productivity outpaced a 1.9% gain in compensation, after two quarters of strength, unit labor costs ticked down 0.6%; a 0.3% increase had been expected. The decline from last year amounted to 0.2%. For the full year costs fell 1.5%, roughly the same as in 2009.
The factory sector's productivity rose 5.8% after a 1.4% Q3 rise. Real output gained 3.7% (6.4% y/y) while hours worked fell 2.0% (+2.7% y/y). The productivity gain lowered unit labor costs by 2.9% and by 3.0% y/y as compensation rose 2.8% (0.5% y/y).
The productivity & cost figures are available in Haver's USECON database.
| Productivity & Costs (SAAR,%) | Q4'10 | Q3'10 | Q2'10 | Q4 Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | 2.6 | 2.4 | -1.8 | 1.7 | 3.6 | 3.5 | 1.0 |
| Compensation per Hour | 1.9 | 2.3 | 2.9 | 3.5 | 2.0 | 1.9 | 3.3 |
| Unit Labor Costs | -0.6 | -0.1 | 4.9 | -0.2 | -1.5 | -1.6 | 2.2 |
| Manufacturing Sector | |||||||
| Output per Hour | 5.8 | 1.4 | 5.7 | 3.6 | 6.0 | 2.0 | -0.3 |
| Compensation per Hour | 2.8 | 1.5 | 4.8 | 0.5 | 1.2 | 5.2 | 4.0 |
| Unit Labor Costs | -2.9 | 0.1 | -0.8 | -3.0 | -4.5 | 3.1 | 4.3 |
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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