Global| Mar 05 2020U.S. Productivity Growth Is Little Changed
by:Tom Moeller
|in:Economy in Brief
Summary
Productivity in the nonfarm business sector during Q4'19 increased 1.2% (SAAR), close to expectations, after a little-changed 0.3% Q3 decline. The Q4 gain was revised from 1.4%. Earlier figures also were revised. The latest increase [...]
Productivity in the nonfarm business sector during Q4'19 increased 1.2% (SAAR), close to expectations, after a little-changed 0.3% Q3 decline. The Q4 gain was revised from 1.4%. Earlier figures also were revised. The latest increase raised productivity by 1.8% during the last four quarters. Output rose 2.4% (2.6% y/y) while hours-worked increased 1.2% (0.8% y/y).
Compensation increased 2.1% (3.5% y/y), revised from 2.8%. It followed a 0.1% easing during Q3, revised from +2.3%.. Adjusted for price changes, compensation rose 0.4% (1.1% y/y). Unit labor costs increased 0.9% during Q4, revised from 1.4%. Third quarter growth of 0.2% was revised from 2.5%. A 1.4% increase was expected. The gain left the y/y rise steady at 1.7%.
In the manufacturing sector, productivity declined at a 0.8% annual rate, off for the third straight quarter. It was revised from -1.2%. The decline lowered factory sector productivity by 0.6% during the last four quarters, the weakest performance since Q3'17. Output eased 0.4% (-1.1% y/y) while hours worked edged 0.4% higher (-0.5% y/y.
Compensation in the factory sector strengthened 2.8%, revised from 4.6%. During the last four quarters, compensation rose 3.1%. Adjusted for price inflation, compensation edged 0.4% higher q/q and a lessened 1.1% y/y. The compensation increase, combined with the decline in productivity, raised unit labor costs in the factory sector by 3.6% (3.7% y/y).
The productivity & cost figures are available in Haver's USECON database.
| Productivity & Costs (SAAR, %) | Q4'19 | Q3'19 | Q2'19 | Q4'19 Y/Y | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | 1.2 | -0.3 | 2.6 | 1.8 | 1.9 | 1.4 | 1.3 |
| Compensation per Hour | 2.1 | -0.1 | 2.7 | 3.5 | 3.6 | 3.2 | 3.5 |
| Unit Labor Costs | 0.9 | 0.2 | 0.1 | 1.7 | 2.0 | 1.8 | 2.1 |
| Manufacturing Sector | |||||||
| Output per Hour (Productivity) | -0.8 | -0.5 | -2.3 | -0.6 | 0.1 | 0.4 | -0.4 |
| Compensation per Hour | 2.8 | -1.2 | 2.8 | 3.1 | 3.2 | 2.2 | 3.6 |
| Unit Labor Costs | 3.6 | -0.7 | 5.2 | 3.7 | 3.1 | 1.8 | 4.0 |
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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