Productivity in the nonfarm business sector during Q4'19 increased 1.2% (SAAR), close to expectations, after a little-changed 0.3% Q3 decline. The Q4 gain was revised from 1.4%. Earlier figures also were revised. The latest increase raised productivity by 1.8% during the last four quarters. Output rose 2.4% (2.6% y/y) while hours-worked increased 1.2% (0.8% y/y).

Compensation increased 2.1% (3.5% y/y), revised from 2.8%. It followed a 0.1% easing during Q3, revised from +2.3%.. Adjusted for price changes, compensation rose 0.4% (1.1% y/y). Unit labor costs increased 0.9% during Q4, revised from 1.4%. Third quarter growth of 0.2% was revised from 2.5%. A 1.4% increase was expected. The gain left the y/y rise steady at 1.7%.

In the manufacturing sector, productivity declined at a 0.8% annual rate, off for the third straight quarter. It was revised from -1.2%. The decline lowered factory sector productivity by 0.6% during the last four quarters, the weakest performance since Q3'17. Output eased 0.4% (-1.1% y/y) while hours worked edged 0.4% higher (-0.5% y/y.

Compensation in the factory sector strengthened 2.8%, revised from 4.6%. During the last four quarters, compensation rose 3.1%. Adjusted for price inflation, compensation edged 0.4% higher q/q and a lessened 1.1% y/y. The compensation increase, combined with the decline in productivity, raised unit labor costs in the factory sector by 3.6% (3.7% y/y).

The productivity & cost figures are available in Haver's USECON database.