Global| Aug 09 2016U.S. Productivity Declines for Third Straight Quarter
by:Tom Moeller
|in:Economy in Brief
Summary
Nonfarm output per hour during Q2'16 declined at a 0.5% annual rate (-0.4% y/y) following an unrevised 0.6% Q1 shortfall. It was the third consecutive quarterly decline and compared to expectations for a 0.5 rise in the Action [...]
Nonfarm output per hour during Q2'16 declined at a 0.5% annual rate (-0.4% y/y) following an unrevised 0.6% Q1 shortfall. It was the third consecutive quarterly decline and compared to expectations for a 0.5 rise in the Action Economics Forecast Survey. Revisions raised growth last year to 0.9% from 0.7%. Growth in 2014 was left at 0.8%, but the 2013 increase was raised to 0.3% from no change. The latest decline occurred as output increased 1.2% (1.1% y/y) and hours worked rose 1.8% (1.5% y/y). Compensation per hour increased 1.5% (1.7% y/y) after a 0.8% decline, revised from a 3.9% increase. The combination of faster compensation growth and declining productivity raised unit labor costs 2.0% (2.1 y/y) following a 0.2% dip, previously reported as a 4.5% increase. A 1.8% increase had been expected.
In the manufacturing sector, productivity eased 0.2% (+0.9% y/y) after a 1.5% increase, revised from 1.3%. Output fell 0.8 (+0.3% y/y), while hours-worked declined 0.7% (-0.6% y/y). Compensation growth rebounded 2.9% (2.6% y/y) after a 4.6% decline, revised from a 2.5% rise. The rise pushed unit labor costs up 3.1% (1.7% y/y) following a 5.9% drop, revised from a 1.1% rise.
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.
| Productivity & Costs (SAAR, %) | Q2'16 | Q1'16 | Q4'15 | Q2'16 Y/Y | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | -0.5 | -0.6 | -2.4 | -0.4 | 0.9 | 0.8 | 0.3 |
| Compensation per Hour | 1.5 | -0.8 | 3.1 | 1.7 | 2.9 | 2.8 | 1.2 |
| Unit Labor Costs | 2.0 | -0.2 | 5.7 | 2.1 | 2.0 | 2.0 | 0.9 |
| Manufacturing Sector | |||||||
| Output per Hour (Productivity) | -0.2 | 1.5 | -1.1 | 0.9 | 0.3 | 0.1 | 0.2 |
| Compensation per Hour | 2.9 | -4.6 | 8.2 | 2.6 | 2.5 | 2.8 | 0.2 |
| Unit Labor Costs | 3.1 | -5.9 | 9.5 | 1.7 | 2.2 | 2.7 | 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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