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by Tom Moeller May 4, 2016
Nonfarm output per hour during Q1'16 fell 1.0% at an annual rate (+0.6% y/y) following a 1.7% Q4'15 shortfall, revised from -2.2%. A 1.5% decline had been expected in the Action Economics Forecast Survey. It was the fourth productivity decline in the last six quarters. It occurred as a diminished 0.4% rise in output (+2.2% y/y) was outpaced by a 1.5% (1.6% y/y) rise in hours-worked. Productivity's decline was accompanied by a strengthened 3.0% rise (2.8% y/y) in compensation, the quickest rise since Q2. That combination of faster compensation growth and declining productivity raised unit labor costs 4.1% (2.3% y/y), the strongest gain since Q4'14. A 3.5% rise had been expected.
In the manufacturing sector, productivity rebounded 1.9% (1.5% y/y) following a 1.0% decline, revised from -0.7%. Output improved 0.7% both q/q and y/y, while hours-worked declined 1.1% (-0.8% y/y). Compensation growth weakened to 0.6%, but the y/y advance of 3.1% was the strongest since Q4'14. The combination of stronger productivity and weaker compensation growth caused unit labor costs to decline 1.2%, offsetting a little-revised 3.6% gain. That pushed y/y growth to 1.6%, below last year's 1.9% rise and 2.8% in 2014.
The productivity & cost figures are available in Haver's USECON database. The expectations figures are from the Action Economics Forecast Survey and are found in the AS1REPNA database.
|Productivity & Costs (SAAR, %)||Q1'16||Q4'15||Q3'15||Q1'16 Y/Y||2015||2014||2013|
|Nonfarm Business Sector|
|Output per Hour (Productivity)||-1.0||-1.7||2.0||0.6||0.7||0.8||0.0|
|Compensation per Hour||3.0||0.9||2.3||2.8||2.8||2.8||1.1|
|Unit Labor Costs||4.1||2.7||0.4||2.3||2.1||2.0||1.1|
|Output per Hour (Productivity)||1.9||-1.0||3.7||1.5||0.2||-0.1||0.7|
|Compensation per Hour||0.6||2.5||4.0||3.1||2.2||2.7||0.2|
|Unit Labor Costs||-1.2||3.6||0.3||1.6||1.9||2.8||-0.5|