Global| Aug 07 2003U.S. Productivity Surged in 2nd Quarter
by:Tom Moeller
|in:Economy in Brief
Summary
Nonfarm labor productivity growth last quarter surged 5.7%, nearly equaling the barn-burner 5.9% growth in 2Q 2002. Consensus expectations had been for 5.0% growth. Prior years' figures were revised up. The surge in productivity [...]
Nonfarm labor productivity growth last quarter surged 5.7%, nearly equaling the barn-burner 5.9% growth in 2Q 2002. Consensus expectations had been for 5.0% growth. Prior years' figures were revised up.
The surge in productivity dropped unit labor costs at a 2.1% rate. It was the sixth decline in unit labor costs over the last eight quarters. During that period unit labor costs fell 3.3%. Compensation rose at a moderate 3.5% rate.
Productivity surged as a 3.4% gain in output was accompanied by a 2.2% decline in hours of all persons (employment times hours). Since peaking in three years ago, hours worked have fallen 5.5%.
Manufacturing sector productivity growth in 2Q surged 4.2% (4.8% y/y). That growth was accompanied by a 1.2% (0.7% y/y) gain in unit labor costs as compensation rose a strong 5.4% (5.6% y/y).
Research from the Federal Reserve Bank of San Francisco titled "Productivity Shocks and the Unemployment Rate" can be found here.
| Nonfarm Business Sector (SAAR) | 2Q '03 Prelim | 1Q '03 | Y/Y | 2002 | 2001 | 2000 |
|---|---|---|---|---|---|---|
| Output per Hour | 5.7% | 2.1% | 3.8% | 5.4% | 1.9% | 3.0% |
| Compensation | 3.5% | 4.1% | 2.8% | 2.8% | 3.6% | 7.0% |
| Unit Labor Costs | -2.1% | 2.0% | -1.0% | -2.4% | 1.7% | 3.9% |
by Tom Moeller August 7, 2003
Initial claims for unemployment insurance remained below 400,000 for the third consecutive period. Claims fell last week by 3,000 to 390,000 but prior weeks' were revised up slightly. Consensus expectations had been for claims of 395,000.
The four-week moving average of initial claims dropped below 400,000 for the first time since late-February to 397,250 (+3.5% y/y).
Continuing claims for unemployment insurance rose 72,000 (2.0%). The gain followed a similar moderate gain the prior week but nevertheless left the claimant level down 2.4% from the late-June peak.
The insured rate of unemployment was stable at 2.9%.
Research from the Federal Reserve Bank of Kansas City titled "A Closer Look at Jobless Recoveries" can be found here.
| Unemployment Insurance (000s) | 8/02/03 | 7/26/03 | Y/Y | 2002 | 2001 | 2000 |
|---|---|---|---|---|---|---|
| Initial Claims | 390.0 | 393.0 | 1.0% | 404.3 | 406.0 | 299.7 |
| Continuing Claims | -- | 3,691 | 5.2% | 3,575 | 3,022 | 2,114 |
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.
More Economy in Brief
