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Economy in Brief
Kansas City Fed Manufacturing Index Dips in May But Remains Strong
The Kansas City Fed reported that its manufacturing sector business activity index declined to 23 in May...
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Home buying remains under pressure...
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Initial claims for unemployment insurance filed in the week ended May 21 were 210,000 (-52.4% y/y)...
Italian Confidence Makes Small Bounce in May; Is It a Signal or Is It Noise?
Italian business and consumer confidence indexes both are substantially lower in May...
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Manufacturers' new orders for durable goods increased 0.4% during April (12.2% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
State Coincident Indexes in April 2022
State Labor Markets in April 2022
Profits & Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
by Tom Moeller March 5, 2015
Nonfarm productivity slipped at a 2.2% annual rate last quarter, revised from -1.8%. The decline followed a 3.9% 3Q rise. For all of last year, worker productivity rose 0.7% on average. Real output increased at a downwardly revised 2.6% rate last quarter (2.9% y/y) while hours worked gained 4.9% (3.0% y/y). Compensation per hour increased a 1.9% rate (2.5% y/y) but when adjusted for lower prices, it improved 3.1% (1.3% y/y). The decline in productivity caused unit labor costs to jump at an upwardly-revised 4.1% rate (2.6% y/y) after declines during the prior two quarters. The Q4 productivity decline compared to expectations for a 2.4% drop in the Action Economics Forecast Survey. A 3.3% rise in unit labor costs was expected.
Manufacturing sector worker productivity slipped at a 0.1% rate (+2.4% y/y), revised from +1.3%, after a 3.5% rise. For all of last year, productivity grew 2.2% after a 1.9% increase in 2013. Output grew 4.3% last quarter (4.5% y/y) after a 4.9% gain, while hours worked improved 4.4% (2.0% y/y) following a 1.4% Q3 increase. Worker compensation per hour increased at a 1.4% rate (2.4% y/y). Adjusted for price inflation, compensation gained 2.7% (1.2% y/y). Unit labor costs increased an upwardly-revised 1.5% (0.0% y/y) following two quarters of sharp decline.
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,%) | Q4'14 | Q3'14 | Q2'14 | Q4 Y/Y | 2014 | 2013 | 2012 |
---|---|---|---|---|---|---|---|
Nonfarm Business Sector | |||||||
Output per Hour (Productivity) | -2.2 | 3.9 | 2.9 | -0.1 | 0.7 | 0.9 | 1.0 |
Compensation per Hour | 1.9 | 2.8 | -0.9 | 2.5 | 2.5 | 1.1 | 2.7 |
Unit Labor Costs | 4.1 | -1.0 | -3.7 | 2.6 | 1.8 | 0.3 | 1.7 |
Manufacturing Sector | |||||||
Output per Hour (Productivity) | -0.1 | 3.5 | 3.7 | 2.4 | 2.2 | 1.9 | 1.0 |
Compensation per Hour | 1.4 | 2.1 | -1.9 | 2.4 | 2.3 | 0.5 | 1.8 |
Unit Labor Costs | 1.5 | -1.3 | -5.4 | 0.0 | 0.1 | -1.4 | 0.8 |