U.S. Productivity Growth Is Steady in Q3’24
by:Tom Moeller
|in:Economy in Brief
Summary
- Annual increase remains below last year’s gain.
- Compensation growth dips.
- Increase in unit labor costs slows.
U.S. nonfarm business productivity (output per hour) increased 2.2% (SAAR) during last quarter after a 2.1% rise in Q2, revised from 2.5%, and a 0.7% Q1 gain, revised from 0.4%. Earlier figures were revised modestly. The Action Economics Survey Forecast expected a 2.6% productivity increase during Q3. The 2.0% y/y increase remained below its 2.7% gain in 2023 (Q4/Q4) but was improved from a 1.4% decline in 2022. Nonfarm business output increased 3.5% (2.8% y/y) after a 3.0% gain, revised from 3.5%, while hours-worked rose 1.2% (0.7% y/y) after increasing 0.9%, revised from 1.0%.
Compensation growth slowed to 4.2% (5.5% y/y) after a 4.6% gain, revised from 3.0%, and a 9.3% jump in Q1, revised from 4.2%. As a result, unit labor costs grew 1.9% (3.4% y/y) last quarter after a 2.4% rise, revised from 0.4% and an 8.5% Q1 gain, revised from 3.8%. The Action Economics survey expected unit labor costs to rise 1.1% last quarter.
In the manufacturing sector, productivity in Q3 improved 1.0% (0.7% y/y) after rising 0.3% in Q2, revised from 1.3%, and 0.7% in Q1, revised from a 0.7% decline. Compensation growth grew 6.4% (6.4% y/y) following a 6.2% rise, revised from 4.9%. Unit labor costs grew 5.3% (5.7% y/y) after a 5.8% jump, revised from 3.6%.
The productivity and labor cost data are available in Haver’s USECON database. The Action Economics 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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