Q1 Productivity-Prel
Updated 04-Jun-09 09:30 ET
Highlights
- First quarter nonfarm business productivity rose at a 1.6% annual rate, up from the preliminary increase of 0.8%. Productivity rose because worker hours were cut even faster than output.
- Output was down at 7.6% annual rate. Yet, because total hours worked fell at a 9.0% rate, the calculation of output per hours showed an increase.
- The year-over-year increase of 2.0% in productivity is consistent with the long-term trend of about 2%. Unit labor costs rose at a 3.0% annual rate. Unit labor costs rose because the cost of hourly compensation rose at a 4.6% annual rate while productivity was up 1.6%.
- Raw Data Available At: http://stats.bls.gov/news.release/prod2.toc
Key Factors
- Quarterly changes in productivity and unit labor costs are a function of swings in output more than underlying improvements in productivity or compensation trends and these data are not far enough from trend to alter economic expectations.
Big Picture
- Productivity gains help keep cost-push inflation pressures from rising wages in check. Over the long term, it is productivity gains that provide the increase in output that have led to the consistent gains in living standards in free market economies.
| Category |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
| Nonfarm Business Sector |
|
|
|
|
|
| Productivity Q/Q |
1.6% |
-0.6% |
2.2% |
4.7% |
2.6% |
| Unit Labor Costs Q/Q |
3.0% |
5.7% |
3.5% |
-2.8% |
1.1% |
| Productivity Y/Y |
1.9% |
2.2% |
2.2% |
3.4% |
3.5% |
| Unit Labor Costs Y/Y |
2.2% |
1.8% |
1.6% |
0.1% |
0.0% |
