Global| Nov 05 2015U.S. Productivity Improves but Unit Labor Costs Rise
by:Tom Moeller
|in:Economy in Brief
Summary
Nonfarm productivity during Q3'15 grew 1.6% at a seasonally adjusted annual rate (0.4% y/y) following a 3.5% rise in Q2, earlier reported as 3.3%. Zero change in Q3 productivity was expected in the Action Economics Forecast Survey. [...]
Nonfarm productivity during Q3'15 grew 1.6% at a seasonally adjusted annual rate (0.4% y/y) following a 3.5% rise in Q2, earlier reported as 3.3%. Zero change in Q3 productivity was expected in the Action Economics Forecast Survey. Real output growth of 1.2% (2.3% y/y) was accompanied by a 0.5% easing (+1.9% y/y) in hours worked. Compensation per hour grew 3.0% (2.4% y/y) which was the quickest increase since Q4'14. The gain left unit labor costs rising at a 1.4% rate (2.0% y/y) which offset most of the prior quarter's decline.
Manufacturing sector productivity surged 4.9% (1.5% y/y) following a 2.1% increase. This was the strongest gain in four years. Real output grew 2.7% (1.8% y/y) but hours worked declined 2.1% (+0.4% y/y). Compensation per hour strengthened 5.9% (1.9% y/y) following little change in Q2. It was the firmest rise since Q1'14. As a result, unit labor costs rose 0.8% (0.5% y/y) which was the strongest increase since Q4.
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, %) | Q3'15 | Q2'15 | Q1'15 | Q3 Y/Y | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | 1.6 | 3.5 | -1.1 | 0.4 | 0.7 | 0.0 | 0.9 |
| Compensation per Hour | 3.0 | 1.7 | 1.5 | 2.4 | 2.7 | 1.1 | 2.7 |
| Unit Labor Costs | 1.4 | -1.8 | 2.6 | 2.0 | 2.0 | 1.1 | 1.7 |
| Manufacturing Sector | |||||||
| Output per Hour (Productivity) | 4.9 | 2.1 | -0.6 | 1.5 | 1.3 | 0.7 | 0.7 |
| Compensation per Hour | 5.9 | 0.0 | -2.2 | 1.9 | 2.7 | 0.2 | 1.8 |
| Unit Labor Costs | 0.9 | -2.0 | -1.6 | 0.5 | 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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