U.S. Productivity Gain Revised Lower in Q4’22
by:Tom Moeller
|in:Economy in Brief
Summary
- Growth remains below 2021.
- Compensation revised higher.
- Unit labor costs rise modestly.
Nonfarm business productivity rose 1.7% (SAAR) in Q4’22, revised from a 3.0% gain reported last month. This followed 1.2% growth in Q3 and declines during the prior two quarters. A 2.7% rise had been expected in the Action Economics Forecast Survey. Compared to one year earlier, productivity fell 1.8%.
The Q4 productivity gain reflected a 3.1% rise in output which was revised from 3.5%. It followed a 3.6% increase in Q3. For all of 2022, output rose 0.7%, down from 7.3% in 2021. Hours-worked increased 1.4% in Q4, revised from 0.5%. The 2.6% y/y gain followed a 5.8% rise in 2021.
Hourly compensation per hour rose 4.9% in Q4, revised from 4.1%, following an 8.2% increase in Q3. For all of 2022, compensation increased 4.4% after 4.6% growth in 2021. Adjusted for price increases, real compensation rose 0.7% in Q4, but it declined a near record 2.4% y/y.
Unit labor costs in the nonfarm business sector increased 3.2% in Q4. This was the smallest increase since a 4.2% decline in Q1 2021. The Action Economics Forecast Survey expected a 1.4% increase. Unit labor costs rose 6.3% y/y after a 3.2% y/y gain during 2021.
In the manufacturing sector, output per hour fell 2.7% in Q4 following a 3.9% fall in Q3. The 1.9% y/y decline followed 0.9% growth in 2021. Output fell 3.0% (+0.7% y/y) in Q4 after a 0.8% Q3 decline. Hours-worked declined 0.4% (+2.7% y/y) after a 3.2% rise.
Hourly compensation in the factory sector rose 4.8% (4.3% y/y) in Q4 following 7.7% growth in Q3. Unit labor costs rose 7.7% following a 12.1% Q3 rise. During all of 2022, unit labor costs in the factory sector rose 6.3% after increasing 2.1% in 2021.
The productivity and labor cost data are available in Haver’s USECON database. The expectations figures are in the AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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