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Last Update: 02-May-13 09:08 ET
Productivity-Prel
Highlights
- Nonfarm business labor productivity increased 0.7% in the preliminary reading from Q1 2013 after falling 1.7% (revised from -1.9%) in Q4 2012. The Briefing.com consensus expected productivity to increase 1.2%.
Key Factors
- Output levels increased 2.5%, up from a 0.7% gain Q4 2013.
- Hours growth softened, increasing 1.8% in Q1 2013 after increasing 2.4% in the fourth quarter. Hourly compensation growth also weakened, increasing just 1.2% after rising 2.7% in Q4 2012.
- The weakness in both hours and compensation growth led to unit labor costs increasing only 0.5% in Q1 2013 after increasing 4.4% in the fourth quarter.
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 | 0.7% | -1.7% | 3.1% | 1.7% | -0.7% |
| Unit Labor Costs Q/Q | 0.5% | 4.4% | -1.9% | -0.5% | 6.4% |
| Productivity Y/Y | 0.9% | 0.6% | 1.6% | 0.8% | 0.5% |
| Unit Labor Costs Y/Y | 0.6% | 2.0% | 0.1% | 0.4% | 0.2% |
