Nonfarm productivity fell at a 3.1% annual rate during Q1 2015, revised from the initial report of a 1.9% fall. The decline followed a 2.1% retreat during the prior quarter. Harsh winter weather and the strike at West coast ports constrained real output. It fell at a 1.6% rate (+3.2% y/y), revised from 0.2%, after rising 2.6% in Q4. Hours worked gained a little-revised 1.6% (2.8% y/y) following a 4.9% rise. Compensation per hour increased at a 3.3% rate (2.1% y/y), revised from 3.1%, after a 3.4% Q4 rise, which also was revised up. When adjusted for lower prices compensation improved at a 6.5% rate (2.2% y/y), the largest increase since Q4 2012. The decline in productivity caused unit labor costs to rise at an upwardly revised 6.7% rate (1.8% y/y), the firmest increase in a year. A 2.9% decline in productivity was expected in the Action Economics Forecast Survey. Unit labor costs were expected to rise at a 5.9% rate.

Manufacturing sector worker productivity declined at a little-revised 1.0% rate last quarter (+1.5% y/y) following no change in Q4, also little changed. The 1.1% decline in output was little revised (+3.8% y/y), following a 4.4% gain. Hours worked edged 0.1% lower (+2.3% y/y) following a 4.4% Q4 increase. Worker compensation per hour rose an upwardly revised 2.4% (1.7% y/y). Adjusted for price deflation, compensation gained 5.5% (1.8% y/y), about the same as in Q4. Unit labor costs increased 3.4% (0.2% y/y), revised from 2.7%, following a 4.2% gain.

The productivity & cost figures are available in Haver's USECON database. The expectations figure is from Action Economics and is the AS1REPNA database.