Global| Mar 05 2008U.S. Productivity Growth Revised Little, Unit Labor Costs Revised Up
by:Tom Moeller
|in:Economy in Brief
Summary
Nonfarm labor productivity growth during 4Q07 was revised little, to 1.9% growth from 1.8% reported initially. The figure still is a marked slowdown from the 3Q figure of 6.3% during 3Q07 which was revised up slightly. Consensus [...]
Nonfarm labor productivity growth during 4Q07 was revised little, to 1.9% growth from 1.8% reported initially. The figure still is a marked slowdown from the 3Q figure of 6.3% during 3Q07 which was revised up slightly. Consensus expectations had been for no revision to 4Q growth.
Growth in output last quarter was little changed at 0.3% and still down sharply from 5.6% during 3Q. A 1.6% decline in hours worked is what pulled productivity up and it was the sharpest q/q decline since 2001.
Compensation per hour last quarter was revised up to a 4.6% growth rate. Compensation growth for the year accelerated to a 4.9% rate of growth which was the quickest since 2000.
The upward revision to compensation raised the estimate of unit labor cost growth to 2.6% from 2.1%, and from the revised 3Q decline of 2.7%. The Consensus expectation had been for unit cost growth to be left unchanged at 2.1%. The 4Q rise was again enough to lift the gain in labor costs for the full year by 3.1%, the quickest since 2000. Productivity in the factory sector eased to a little revised 2.3% rate of growth from 4.1% during 3Q. For all of 2007 factory sector productivity rose 3.7% versus 4.3% during 2006. Unit labor costs rose 2.1% after declines during the prior two quarters. For the full year unit labor costs in the factory sector rose 1.6% after two years of negative growth.Condition of the U.S. Banking System is yesterday's Senate testimony by Fed Vice ChairmanDonald L. Kohn and it can be found here.
| Non-farm Business Sector (SAAR, %) | Q4 '07 (Revised) | Q4 '07 | Q3 '07 | Y/Y | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|---|
| Output per Hour | 1.9 | 1.8 | 6.3 | 2.9 | 1.8 | 1.0 | 1.9 |
| Compensation per Hour | 4.6 | 3.9 | 3.4 | 3.9 | 4.9 | 3.9 | 4.0 |
| Unit Labor Costs | 2.6 | 2.1 | -2.7 | 0.9 | 3.1 | 2.9 | 2.0 |
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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