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Economy in Brief

U.S. Productivity Growth Accelerates
by Tom Moeller  November 2, 2017

Output per hour in the nonfarm business sector grew at a 3.0% annual rate (1.5% y/y) in the third quarter following an unrevised 1.5% Q2 gain. It was the quickest productivity increase in three years. A 2.4% rise had been expected in the Action Economics Forecast Survey. Output rose 3.8% (2.9% y/y) while hours-worked gained 0.8% (1.4% y/y).

Unit labor costs increased 0.5% last quarter (-0.1% y/y) following a 0.3% gain. A 0.4% rise had been expected. Compensation costs increased 3.5% last quarter (1.4% y/y) after a 1.8% rise.

In the manufacturing sector, productivity declined 5.0% (+0.1% y/y) last quarter following a 3.4% Q2 rise. Output fell 2.1% (+1.2% y/y) while hours-worked lengthened 3.1% (1.1% y/y).

Unit labor costs in the factory sector strengthened 6.2% last quarter (0.7% y/y) following a 1.0% decline.  Compensation per hour grew 0.9% (0.8% y/y) during Q3 following a 2.4% rise.

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, %) Q3'17 Q2'17 Q1'17 Q3'17 Y/Y 2016 2015 2014
Nonfarm Business Sector
Output per Hour (Productivity) 3.0 1.5 0.1 1.5 -0.1 1.3 1.0
Compensation per Hour 3.5 1.8 4.9 1.4 1.0 3.1 2.9
Unit Labor Costs 0.5 0.3 4.8 -0.1 1.1 1.8 1.9
Manufacturing Sector
Output per Hour (Productivity) -5.0 3.4 0.2 0.1 0.2 -0.6 0.1
Compensation per Hour 0.9 2.4 4.4 0.8 0.7 2.5 2.8
Unit Labor Costs 6.2 -1.0 4.2 0.7 0.6 3.1 2.7
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