Global| May 05 2005U.S. Productivity Slightly Higher Than Expected
by:Tom Moeller
|in:Economy in Brief
Summary
In 1Q05, non-farm labor productivity rose 2.6% versus Consensus expectations for a 1.9% gain. The gain was the quickest in three quarters yet growth year to year slowed to 2.5% from its peak of 5.5% early last year. The surprise [...]
In 1Q05, non-farm labor productivity rose 2.6% versus Consensus expectations for a 1.9% gain. The gain was the quickest in three quarters yet growth year to year slowed to 2.5% from its peak of 5.5% early last year.
The surprise stemmed from a slowdown in hours worked to 1.0% (1.4% y/y) versus 1.6% in 4Q and 2.8% growth in 3Q04. Output growth of 3.6% compared to 5.3% during all of 2004.
Unit labor costs accelerated to 2.2% versus annual growth of 0.4% last year. Compensation costs held steady at a strong 4.8% versus 4.5% growth during 2004.
A 2.9% rise in the implicit price deflator raised slightly the ratio of prices to unit labor costs, suggesting that profit margins remained firm.
Does Wage Inflation Cause Price Inflation? from the Federal Reserve Bank of Cleveland can be found here. 
| Non-farm Business Sector (SAAR) | 1Q '05 | 4Q '04 | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Output per Hour | 2.6% | 2.1% | 2.5% | 4.1% | 4.4% | 4.3% |
| Compensation | 4.8% | 3.8% | 5.0% | 4.5% | 4.0% | 3.2% |
| Unit Labor Costs | 2.2% | 1.7% | 2.5% | 0.4% | -0.4% | -1.1% |
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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