Global| Mar 07 2013U.S. Worker Productivity Decline Is Little Revised; Factory Sector Much Stronger
by:Tom Moeller
|in:Economy in Brief
Summary
Nonfarm business sector productivity for Q4'12 declined 1.9% (SAAR, +0.6% y/y). That was hardly revised from the preliminary report of a 2.0% drop so it helped drive up costs. For the year productivity grew 0.7%, the same as in 2011. [...]
Nonfarm business sector productivity for Q4'12 declined 1.9% (SAAR, +0.6% y/y). That was hardly revised from the preliminary report of a 2.0% drop so it helped drive up costs. For the year productivity grew 0.7%, the same as in 2011. Lower productivity growth last quarter was accompanied by a quickened 2.6% rise (2.6% y/y) in compensation per hour. Nevertheless, for all of last year compensation growth slowed to 1.4%, its weakest since 2009. This combination of lower productivity and higher compensation caused unit labor costs to jump at a 4.6% annual rate (2.1% y/y) in Q4'12. Declines during the prior two quarters, however, left the full year increase at a modest 0.7%.
The productivity picture was more encouraging in the factory sector. The 2.1% gain (1.8% y/y) was revised from 0.5% in the preliminary report. Nevertheless, the 2.2% full year increase remained down from 2.6% in 2011 and 6.5% in 2010. Compensation growth decelerated slightly more than reported earlier to 0.2% (4.2% y/y) but the four quarter increase remained firm at 4.2%, its fastest since Q3'09. The full year 2.2% rise followed a 2.8% gain in 2011, both of which were slower than the 8.0% increase in 2003. The improvement in productivity lowered factory sector unit labor costs by 1.9% last quarter. As a result, unit labor costs were unchanged for the whole year, as they were in 2011.
The productivity & cost figures are available in Haver's USECON database.
| Productivity & Costs (SAAR,%) | Q4'12 | Q3'12 | Q2'12 | Q4 Y/Y | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | -1.9 | 3.1 | 1.7 | 0.5 | 0.7 | 0.6 | 3.1 |
| Compensation per Hour | 2.6 | 1.2 | 1.2 | 2.6 | 1.4 | 2.6 | 2.1 |
| Unit Labor Costs | 4.6 | -1.9 | -0.5 | 2.1 | 0.7 | 2.0 | -1.0 |
| Manufacturing Sector | |||||||
| Output per Hour | 2.1 | -0.9 | 0.1 | 1.8 | 2.2 | 2.6 | 6.5 |
| Compensation per Hour | 0.2 | 0.6 | 9.1 | 4.2 | 2.2 | 2.8 | 1.2 |
| Unit Labor Costs | -1.9 | 1.4 | 9.0 | 2.3 | 0.0 | 0.1 | -5.0 |
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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