Global| Jun 07 2018U.S. Productivity Revised Lower in Q1; Unit Labor Costs Revised Higher
Summary
Output per hour in the nonfarm business sector was revised down to a 0.4% gain at a seasonally adjusted annual rate in Q1'18 (1.3% year-on-year), from the previously reported 0.7% increase. In Q4'17 productivity grew at an unrevised [...]
Unit labor costs were revised higher in both Q1’18 and Q4’17 to 2.9% (1.3% y/y) and 2.5% respectively. A 2.8% rise in Q1 had been expected in the Action Economics survey. Compensation costs were revised slightly lower to 3.3% (2.6% y/y), following an upwardly revised 2.9% gain.
In the manufacturing sector, productivity was revised substantially lower to a 1.2% annualized decline in Q1 (+0.3% y/y). The fourth quarter’s advance was revised down to 4.3%. Output increased at a downwardly revised 1.7% pace in Q1 (2.0% y/y) after 5.4% in Q4. Hours worked grew a slightly faster 2.9% (1.7% y/y) following 1.1% in Q4.
Unit labor costs in the factory sector rose at a 5.2% rate in Q1 (2.5% y/y), following a 0.2% increase. Compensation per hour grew 3.9% (2.9% y/y) following a 4.5% gain.
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) | 0.4 | 0.3 | 2.6 | 1.3 | 1.3 | 0.0 | 1.2 |
| Compensation per Hour | 3.3 | 2.9 | 3.6 | 2.6 | 1.7 | 1.1 | 3.1 |
| Unit Labor Costs | 2.7 | 2.5 | 1.0 | 1.3 | 0.4 | 1.1 | 1.8 |
| Manufacturing Sector | |||||||
| Output per Hour (Productivity) | -1.2 | 4.3 | -5.0 | 0.3 | 0.7 | 0.3 | -1.5 |
| Compensation per Hour | 3.9 | 4.5 | 0.7 | 2.9 | 1.7 | 0.7 | 2.5 |
| Unit Labor Costs | 5.2 | 0.2 | 6.0 | 2.5 | 1.0 | 0.4 | 4.1 |
Gerald D. Cohen
AuthorMore in Author Profile »Gerald Cohen provides strategic vision and leadership of the translational economic research and policy initiatives at the Kenan Institute of Private Enterprise.
He has worked in both the public and private sectors focusing on the intersection between financial markets and economic fundamentals. He was a Senior Economist at Haver Analytics from January 2019 to February 2021. During the Obama Administration Gerald was Deputy Assistant Secretary for Macroeconomic Analysis at the U.S. Department of Treasury where he helped formulate and evaluate the impact of policy proposals on the U.S. economy. Prior to Treasury, he co-managed a global macro fund at Ziff Brothers Investments.
Gerald holds a bachelor’s of science from the Massachusetts Institute of Technology and a Ph.D. in Economics from Harvard University and is a contributing author to 30-Second Money as well as a co-author of Political Cycles and the Macroeconomy.
More Economy in Brief
