Global| May 03 2018U.S. Productivity Has Modest Increase; Unit Labor Costs Strengthen Moderately
Summary
Output per hour in the nonfarm business sector rose 0.7% at a seasonally adjusted annual rate in Q1'18 following a 0.3% rise in Q4'17; the latter was revised from zero change reported in March. The consensus in the Action Economics [...]
Output per hour in the nonfarm business sector rose 0.7% at a seasonally adjusted annual rate in Q1'18 following a 0.3% rise in Q4'17; the latter was revised from zero change reported in March. The consensus in the Action Economics Forecast Survey looked for a Q1 gain of 0.9%. Q1 output rose at a 2.8% rate (3.6% y/y) after a 3.7% increase during Q4, while hours worked were up at a 2.1%% rate (2.2% y/y). Data were again revised back to 2013 and in some cases 2010, owing to moderate revisions in underlying data on hours, compensation and output for detailed industries from original source agencies.
Unit labor costs increased at a 2.7% rate (1.1% y/y) after Q4's 2.1% advance, revised from 2.5%. A 3.0% rise had been expected in the Action Economics survey. Compensation costs increased 3.4% (2.5% y/y), following a 2.4% gain.
In the manufacturing sector, productivity grew at a modest 0.5% pace in Q1. Q4's original 6.0% advance was revised to 4.5%. Output increased at a 3.3% pace in Q1 (2.5% y/y) after 5.6% in Q4, while hours worked grew 2.8% (1.6% y/y) following 1.1% in Q4.
Unit labor costs in the factory sector rose a 2.7% rate (+1.3% y/y), following a 2.2% decline. Compensation per hour grew 3.2% (2.1% y/y) following a 2.2% 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, %) | Q1'18 | Q4'17 | Q3'17 | Q1'18 Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Nonfarm Business Sector | |||||||
| Output per Hour (Productivity) | 0.7 | 0.3 | 2.6 | 1.3 | 1.3 | 0.0 | 1.2 |
| Compensation per Hour | 3.4 | 2.4 | 3.6 | 2.5 | 1.7 | 1.1 | 3.1 |
| Unit Labor Costs | 2.7 | 2.1 | 1.0 | 1.1 | 0.3 | 1.1 | 1.8 |
| Manufacturing Sector | |||||||
| Output per Hour (Productivity) | 0.5 | 4.5 | -4.7 | 0.8 | 0.4 | -0.4 | 0.3 |
| Compensation per Hour | 3.2 | 2.2 | 0.7 | 2.1 | 1.6 | 0.7 | 2.5 |
| Unit Labor Costs | 2.7 | -2.2 | 6.0 | 1.3 | 1.1 | 1.1 | 2.2 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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