Global| Mar 07 2019U.S. Productivity Growth Is Solid
by:Tom Moeller
|in:Economy in Brief
Summary
Output per hour in the nonfarm business sector grew 1.9% (SAAR) in Q4'18, an increase fairly stable with the Q3 gain. During the last four quarters, productivity growth picked up to 1.8%, the quickest rate of increase in three years. [...]
Output per hour in the nonfarm business sector grew 1.9% (SAAR) in Q4'18, an increase fairly stable with the Q3 gain. During the last four quarters, productivity growth picked up to 1.8%, the quickest rate of increase in three years. A 1.6% Q4 rise had been expected in the Action Economics Forecast Survey. The latest increase reflected a 3.1% rise (3.7% y/y) in real output and a 1.2% increase (1.9% y/y) in hours worked.
The gain in productivity was accompanied by a 2.0% increase in unit labor costs. It followed a 1.6% rise in Q3. The 1.0% gain for the full year compared to a 2.2% increase during 2017. A 1.7% Q4 rise had been expected. Compensation growth remained solid at 3.9% (2.8% y/y) after a 3.5% rise.
In the manufacturing sector, productivity increased 2.0% (1.0% y/y), the quickest rate of growth in four quarters. It reflected a 2.7% rise (2.9% y/y) in real output accompanied by a 0.8% gain (1.9% y/y) in hours worked.
Unit labor costs in the factory sector increased 2.2% (0.8% y/y), following a 1.8% gain. The y/y rise compared to a 5.0% peak in early 2015. Compensation per hour strengthened 4.3% (1.8% y/y), the strongest increase since Q1'18.
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, %) | Q4'18 | Q3'18 | Q2'18 | Q4'18 Y/Y | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | 1.9 | 1.8 | 2.8 | 1.8 | 1.3 | 1.1 | 0.2 |
| Compensation per Hour | 3.9 | 3.5 | -0.1 | 2.8 | 2.7 | 3.4 | 1.1 |
| Unit Labor Costs | 2.0 | 1.6 | -2.8 | 1.0 | 1.4 | 2.2 | 0.9 |
| Manufacturing Sector | |||||||
| Output per Hour (Productivity) | 2.0 | 1.0 | 1.2 | 1.0 | 0.8 | 0.7 | 0.3 |
| Compensation per Hour | 4.3 | 2.8 | -5.0 | 1.8 | 1.7 | 3.4 | 0.6 |
| Unit Labor Costs | 2.2 | 1.8 | -6.1 | 0.8 | 0.9 | 2.6 | 0.3 |
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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