Briefing.com: Productivity-Prel

Updated: 06-Mar-25 09:30 ET

Q4 Productivity-Prel

Updated: 06-Mar-25 09:30 ET

Highlights

Q4 productivity was upwardly revised to 1.5% (Briefing.com consensus 1.2%) from the advance estimate of 1.2%.
Q4 unit labor costs were revised down to 2.2% (Briefing.com consensus 3.0%) from the advance estimate of 3.0%.

Key Factors

The productivity increase stemmed from output increasing 2.4% (versus previously reported 2.3%) and hours worked increasing 0.8% (versus previously reported 1.0%).
The 2.2% increase in unit labor costs resulted from a 3.8% increase in hourly compensation (versus 4.2% previously) and a 1.5% increase in productivity (versus 1.2% previously).
From the same quarter a year ago, nonfarm business sector labor productivity increased 2.0% (versus 1.6% in the advance estimate).
Unit labor costs increased 2.0% over the last four quarters (versus 2.7% with the advance estimate).
Manufacturing sector labor productivity increased 0.3% (versus 0.8% previously), as output decreased 1.3% (versus 1.0% previously) and hours worked decreased 1.6% (versus 1.8% previously). Unit labor costs in the total manufacturing sector increased 3.7% (versus 3.3% previously), driven by a 4.0% increase in hourly compensation (versus 4.1% previously) and a 0.3% increase in productivity (versus 0.8% previously).

Big Picture

The key takeaway from the report is that both components had the right skew for market sentiment in that productivity was higher than previously reported while unit labor costs (an inflation gauge) were lower than previously reported, aided by the improved productivity.