Global| Dec 02 2015U.S. Productivity Growth Lifted by Revisions; Unit Labor Costs Also Strengthened
by:Tom Moeller
|in:Economy in Brief
Summary
Nonfarm productivity during Q3'15 grew 2.2% at a seasonally adjusted annual rate, revised from 1.6%. The increase followed an unrevised 3.5% rise in Q2. The revised Q3 increase matched expectations in the Action Economics Forecast [...]
Nonfarm productivity during Q3'15 grew 2.2% at a seasonally adjusted annual rate, revised from 1.6%. The increase followed an unrevised 3.5% rise in Q2. The revised Q3 increase matched expectations in the Action Economics Forecast Survey. Real output growth of 1.8% (2.5% y/y) was revised from 1.2%. Hours worked eased 0.3% (+1.9% y/y), revised from -0.5%. Compensation per hour grew 4.0% (3.6% y/y) which was changed from 3.0%. The Q2 increase, however, was revised up even more sharply to 5.6% from 1.7%. As a result, unit labor cost growth last quarter was raised to 1.8% (3.0% y/y) from 1.4%, but the Q2 increase of 2.0% was lifted even more sharply from a 1.8% decline. A revised 1.0% rise in Q3 costs was expected.
Manufacturing sector productivity surged a little-revised 5.1% (1.5% y/y) during Q3, following a 2.2% increase. This remained the strongest gain in four years. Real factory-sector output grew 3.2% (2.0% y/y) but hours worked declined 1.8% (+0.4% y/y). Compensation per hour strengthened 7.5% (3.7% y/y), revised from 5.9%, but the 5.5% rise in Q2 was revised from no change. The Q3 rise was the firmest rise since Q1'14. As a result, unit labor cost growth of 2.3% (2.1% y/y) was revised from 0.8%. That followed a 3.3% Q2 gain which was revised from -2.0%.
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.
The Fed's latest Beige Book covering regional economic conditions is available here.
| Productivity & Costs (SAAR, %) | Q3'15 | Q2'15 | Q1'15 | Q3 Y/Y | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | 2.2 | 3.5 | -1.1 | 0.6 | 0.7 | 0.0 | 0.9 |
| Compensation per Hour | 4.0 | 5.6 | 1.5 | 3.6 | 2.7 | 1.1 | 2.7 |
| Unit Labor Costs | 1.8 | 2.0 | 2.6 | 3.0 | 2.0 | 1.1 | 1.7 |
| Manufacturing Sector | |||||||
| Output per Hour (Productivity) | 5.1 | 2.2 | -0.6 | 1.5 | 1.3 | 0.7 | 0.7 |
| Compensation per Hour | 7.5 | 5.5 | -2.2 | 3.7 | 2.7 | 0.2 | 1.8 |
| Unit Labor Costs | 2.3 | 3.3 | -1.6 | 2.1 | 1.4 | -0.5 | 1.0 |
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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