Global| Jun 07 2016U.S. Productivity Declines for a Second Quarter
by:Tom Moeller
|in:Economy in Brief
Summary
Nonfarm output per hour during Q1'16 fell 1.0% at an annual rate (+0.6% y/y) following a 1.7% Q4'15 shortfall, revised from -2.2%. A 1.5% decline had been expected in the Action Economics Forecast Survey. It was the fourth [...]
Nonfarm output per hour during Q1'16 fell 1.0% at an annual rate (+0.6% y/y) following a 1.7% Q4'15 shortfall, revised from -2.2%. A 1.5% decline had been expected in the Action Economics Forecast Survey. It was the fourth productivity decline in the last six quarters. It occurred as a diminished 0.4% rise in output (+2.2% y/y) was outpaced by a 1.5% (1.6% y/y) rise in hours-worked. Productivity's decline was accompanied by a strengthened 3.0% rise (2.8% y/y) in compensation, the quickest rise since Q2. That combination of faster compensation growth and declining productivity raised unit labor costs 4.1% (2.3% y/y), the strongest gain since Q4'14. A 3.5% rise had been expected.
In the manufacturing sector, productivity rebounded 1.9% (1.5% y/y) following a 1.0% decline, revised from -0.7%. Output improved 0.7% both q/q and y/y, while hours-worked declined 1.1% (-0.8% y/y). Compensation growth weakened to 0.6%, but the y/y advance of 3.1% was the strongest since Q4'14. The combination of stronger productivity and weaker compensation growth caused unit labor costs to decline 1.2%, offsetting a little-revised 3.6% gain. That pushed y/y growth to 1.6%, below last year's 1.9% rise and 2.8% in 2014.
The productivity & cost figures are available in Haver's USECON database. The expectations figures are from the Action Economics Forecast Survey and are found in the AS1REPNA database.
Housing's Role in the Slow Economic Recovery from the Federal
Reserve Bank of Philadelphia is available
| Productivity & Costs (SAAR, %) | Q1'16 | Q4'15 | Q3'15 | Q1'16 Y/Y | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | -1.0 | -1.7 | 2.0 | 0.6 | 0.7 | 0.8 | 0.0 |
| Compensation per Hour | 3.0 | 0.9 | 2.3 | 2.8 | 2.8 | 2.8 | 1.1 |
| Unit Labor Costs | 4.1 | 2.7 | 0.4 | 2.3 | 2.1 | 2.0 | 1.1 |
| Manufacturing Sector | |||||||
| Output per Hour (Productivity) | 1.9 | -1.0 | 3.7 | 1.5 | 0.2 | -0.1 | 0.7 |
| Compensation per Hour | 0.6 | 2.5 | 4.0 | 3.1 | 2.2 | 2.7 | 0.2 |
| Unit Labor Costs | -1.2 | 3.6 | 0.3 | 1.6 | 1.9 | 2.8 | -0.5 |
U.S. Gasoline Prices Rise With the Beginning of
Summer The busiest driving season has given rise to further strength in gasoline
prices. Regular gasoline prices increased to $2.34 per gallon during
Memorial Day week (-15.9% y/y) following the prior week's jump to $2.30,
according to the U.S. Department of Energy. Prices have risen by one-third since
mid-February and were at the highest level since the last week of September.
Prices remained down versus a 2014 high of $3.71 per gallon. Haver Analytics
constructs factors adjusting for the seasonal variation in pump prices, and the
adjusted price increased to $2.17 per gallon. Spot market gasoline prices
increased to $1.64 and remained up from a low of $0.89 in early February. WTI crude oil costs strengthened to $48.91 per barrel last week
(-15.9% y/y) after rising to $48.01 in the prior week. Yesterday, prices firmed
to $49.10 per barrel, up 87% from the February's daily low of $26.21 per barrel.
Brent crude oil prices increased w/w to $48.73 per barrel, then rose to $49.26
yesterday. Prices for natural gas declined to $1.83 per mmbtu last week (-33.6%
y/y), then recovered to $1.95 yesterday. Last week, gasoline demand increased 3.9% y/y, while demand for all
petroleum products gained 3.0% y/y. Gasoline inventories rose 8.8% y/y
and inventories of all petroleum products increased 6.5% y/y. Crude oil
production (input to refineries) was little changed y/y in the last four weeks. The energy price data are reported by the U.S. Department of Energy. The
petroleum demand and inventory figures are from the Oil & Gas Journal
Weekly. These data can be found in Haver's WEEKLY database. The daily
figures are in DAILY and greater detail on prices, demand and production,
along with regional breakdowns, are in OILWKLY.
by Tom Moeller June
7, 2016
Weekly Energy Prices
06/06/16
05/30/16
05/23/16
Y/Y %
2015
2014
2013
Retail Gasoline ($ per Gallon, Regular)
2.34
2.30
-15.9
2.03
2.30
3.33
Light Sweet Crude Oil, WTI ($ per bbl.,
WSJ)
48.91
48.01
-15.9
48.90
93.64
97.96
Natural Gas ($/mmbtu, LA, WSJ)
1.83
1.88
-33.6
2.62
4.37
3.73
U.S. Consumer Credit Increase Is Strongest Since 2001
by Tom Moeller June 7, 2016
Consumer credit outstanding jumped $29.7 billion during March (6.6% y/y) following a $14.1 billion February rise, revised from $17.2 billion. It was the fastest gain since November 2001. A $15.7 billion increase had been expected in the Action Economics Forecast Survey. During the last ten years, there has been a 46% correlation between the y/y growth in consumer credit and y/y growth in personal consumption expenditures.
Revolving consumer credit surged $11.1 billion (6.2% y/y) after an unrevised $2.9 billion rise. It was the strongest gain since February 2001. Credit card balances at depository institutions (84% of the total) surged 8.8% y/y. Finance company holdings (6% of the total) fell 5.1% y/y, while borrowing from credit unions (5% of the total) advanced 7.3% y/y. Nonfinancial business credit (2% of the total) fell 5.4% y/y, and securitized credit card balances (3% of the total) declined 15.9% y/y.
Nonrevolving credit borrowing grew $18.6 billion (6.8% y/y) following an $11.2 billion rise, revised from $14.3 billion reported last month. It was the quickest rise in six months. Federal government loans (36% of the total) increased 11.1% y/y. Finance company balances (24% of the total) eased 0.8% y/y. Borrowing at depository institutions (25% of the total) accelerated to 5.7% y/y, and borrowing at credit unions (11% of the total) also accelerated to 15.1% y/y. Nonprofit & educational institution loans (2% of the total) declined 8.7% y/y, and nonfinancial business loans (1% of the total) remained unchanged y/y.
Student loans outstanding increased a diminished 6.2% y/y during Q1'16 while motor vehicle loans rose a steady 8.2% y/y.
These Federal Reserve Board figures are break-adjusted and calculated by Haver Analytics. There is a break in the credit outstanding data from November 2010 to December 2010 due to the Fed's benchmarking process. Benchmark estimates are based on the Census of Finance Companies (CFC) and the Survey of Finance Companies (SFC) conducted in 2010 and 2011, respectively.
The consumer credit data are available in Haver's USECON database. The Action Economics figures are contained in the AS1REPNA database.
| Consumer Credit Outstanding (M/M Chg, SA) | Apr | Mar | Feb | Y/Y | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Total | $29.7 bil. | $14.1 bil. | 6.6% | 6.6% | 7.2% | 6.0% | |
| Revolving | 11.1 | 2.9 | 6.2 | 5.2 | 3.9 | 1.4 | |
| Nonrevolving | 18.6 | 11.2 | 6.8 | 7.1 | 8.4 | 7.9 |
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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