U.S. Productivity Increase Revised Slightly Higher in Q2’24
by:Tom Moeller
|in:Economy in Brief
Summary
- Output per hour growth raised.
- Compensation growth is reduced.
- Modest unit labor cost increase is lessened.
U.S. nonfarm business productivity (output per hour) increased 2.5% (2.7% y/y) last quarter, revised from 2.3%, after a 0.4% gain in Q1. The Action Economics Survey Forecast expected a 2.4% increase in productivity during Q2. The increase remained below growth in the last three quarters of 2023 which averaged 3.8%. Nonfarm business output increased 3.5% (3.5% y/y), revised from 3.3%, after a 1.0% Q1 rise. Hours-worked rose an unrevised 1.0% (0.7% y/y) after edging 0.5% higher in Q1.
Compensation growth slowed to 3.0% last quarter (3.1% y/y), revised from 3.3%, versus a 4.2% gain in Q1. As a result, unit labor cost growth was revised down to 0.4% (0.3% y/y) in Q2 from 0.9%, after a 3.8% rise in Q1. The Action Economics survey expected unit labor costs to rise 0.8% last quarter.
In the manufacturing sector, productivity in Q2 grew 1.3% (0.4% y/y), revised from 1.8%, after falling 0.7% in Q1, revised from a 1.1% decline. Compensation growth grew 4.9% (4.7% y/y), revised from 5.1%, in Q2 following a 3.2% rise. Unit labor costs grew 3.6% (4.3% y/y), revised from 3.2%, in Q2 after a 3.9% increase in Q1, revised from 4.3%.
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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