Global| Aug 08 2014U.S. Worker Productivity Rebounds; Unit Labor Costs Nudge Higher
by:Tom Moeller
|in:Economy in Brief
Summary
Nonfarm productivity increased at a 2.5% annual rate last quarter (1.2% y/y) following a 4.5% Q1 decline, revised from -1.7%. Real output growth of 5.2% (3.2% y/y), rebounding from a 2.4% Q1 drop, was accompanied by a 2.7% increase [...]
Nonfarm productivity increased at a 2.5% annual rate last quarter (1.2% y/y) following a 4.5% Q1 decline, revised from -1.7%. Real output growth of 5.2% (3.2% y/y), rebounding from a 2.4% Q1 drop, was accompanied by a 2.7% increase (2.0% y/y) in hours worked. Compensation per hour increased 3.1% (3.1% y/y) but when adjusted for inflation it nudged just 0.1% higher (1.0% y/y). The improvement in productivity caused unit labor costs to increase just 0.6% following an 11.8% Q1 surge, revised from 4.2%. The Q2 productivity gain outpaced expectations for a 1.5% rise in the Action Economics Forecast Survey. A 1.2% rise in unit labor costs was expected. Data revisions extended back to 1999, reflecting benchmark GDP revisions.
In the factory sector, worker productivity rose at an improved 3.6% rate (2.1% y/y), the quickest rise in a year. Output rebounded at a 7.0% rate (3.7% y/y) after a 1.5% gain, while hours worked rose 3.2% (1.5% y/y) following a 1.6% Q1 decline. Worker compensation per hour increased at a 2.2% rate (2.9% y/y), moderating from the 8.3% Q1 surge. Adjusted for price inflation, compensation declined 0.8% (+0.9% y/y) after a 6.2% increase during Q1. Unit labor costs declined 1.3% (+0.8% y/y) following a 5.0% jump.
The productivity & cost figures are available in Haver's USECON database. The expectations figure is from Action Economics and is the AS1REPNA database.
| Productivity & Costs (SAAR,%) | Q2'14 | Q1'14 | Q4'13 | Q2 Y/Y | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | 2.5 | -4.5 | 3.3 | 1.2 | 0.9 | 1.0 | 0.1 |
| Compensation per Hour | 3.1 | 6.8 | 1.9 | 3.1 | 1.1 | 2.7 | 2.2 |
| Unit Labor Costs | 0.6 | 11.8 | -1.3 | 1.9 | 0.2 | 1.7 | 2.1 |
| Manufacturing Sector | |||||||
| Output per Hour (Productivity) | 3.6 | 3.2 | 1.3 | 2.1 | 2.3 | 1.9 | 1.0 |
| Compensation per Hour | 2.2 | 8.3 | 0.8 | 2.9 | 0.6 | 1.7 | 1.7 |
| Unit Labor Costs | -1.3 | 5.0 | -0.5 | 0.8 | -1.6 | -0.2 | 0.8 |
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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