Global| Jun 05 2013U.S. Worker Productivity is Revised Down but Compensation & Unit Labor Costs Decline Significantly
by:Tom Moeller
|in:Economy in Brief
Summary
Nonfarm business sector productivity growth during Q1'13 was revised slightly downward to 0.5% (SAAR) from 0.7% reported initially. That was a rebound from the 1.7% decline during Q4'12. It left the y/y gain of 0.9% on a par with the [...]
Nonfarm business sector productivity growth during Q1'13 was revised slightly downward to 0.5% (SAAR) from 0.7% reported initially. That was a rebound from the 1.7% decline during Q4'12. It left the y/y gain of 0.9% on a par with the slow growth rates of 2011 and 2012. Real output rose at a 2.1% rate (2.4% y/y) while hours worked rose 1.6% (1.5% y/y). The revised compensation per hour and unit cost figures, however, were revised substantially. Compensation's initial 1.2% rise was taken down and now shows a 3.8% decline (+2.0% y/y). This combination of improved productivity and lower compensation caused unit labor costs to fall at a 4.3% annual rate (+1.1% y/y) in Q1'13. The offset to this favorable story is that Q4'12 compensation was revised up substantially to 9.9% from 2.7%. As a result, Q4's rise in unit costs was increased to 11.8% from 4.4%.
The factory sector figures also were updated. The current 3.5% quarterly gain in output per hour was little-changed and left the y/y increase at 1.6%, on a par with the prior two years. Output rose 5.3% (2.5% y/y) while hours worked increased 1.8% (0.9% y/y). Compensation fell 6.9% (+4.5% y/y) instead of rising 3.3% as indicated initially. That dropped unit labor costs by 10.0% (+2.8% y/y) instead of slipping 0.5% as reported initially.
The productivity & cost figures are available in Haver's USECON database.
Drilling Down into Core Inflation: Goods versus Services from the Federal Reserve Bank of New York is available here.
| Productivity & Costs (SAAR,%) | Q1'13 | Q4'12 | Q3'12 | Q1 Y/Y | 2012 | 2011 | 2010 | |
|---|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | ||||||||
| Output per Hour (Productivity) | 0.5 | -1.7 | 3.1 | 0.9 | 0.7 | 0.6 | 3.1 | |
| Compensation per Hour | -3.8 | 9.9 | 1.2 | 2.0 | 1.9 | 2.6 | 2.1 | |
| Unit Labor Costs | -4.3 | 11.8 | -1.9 | 1.1 | 1.2 | 2.0 | -1.0 | |
| Manufacturing Sector | ||||||||
| Output per Hour | 3.5 | 2.4 | -0.3 | 1.6 | 1.9 | 1.4 | 6.4 | |
| Compensation per Hour | -6.9 | 16.7 | 0.6 | 4.5 | 3.2 | 2.8 | 1.2 | |
| Unit Labor Costs | -10.0 | 14.0 | 0.8 | 2.8 | 1.3 | 1.4 | -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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