Updated: 05-Sep-24 09:30 ET
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Updated: 05-Sep-24 09:30 ET |
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Highlights
- The revised Q2 Productivity report showed productivity revised up to 2.5% (Briefing.com consensus 2.3%) from the preliminary reading of 2.3%.
- Unit labor costs were revised down to 0.4% (Briefing.com consensus 0.9%) from the preliminary reading of 0.9%.
Key Factors
- The productivity increase stemmed from output increasing 3.5% (vs preliminary reading of 3.3%) and hours worked increasing 1.0% (unchanged from preliminary reading). The 0.4% increase in unit labor costs resulted from a 3.0% increase in hourly compensation (vs preliminary reading of 3.3%) and a 2.5% increase in productivity (vs preliminary reading of 2.3%).
- Manufacturing sector labor productivity increased 1.3% (vs preliminary reading of 1.8%), as output increased 2.4% (vs preliminary reading of 3.4%) and hours worked increased 1.1% (vs preliminary reading of 1.6%). Unit labor costs in the total manufacturing sector increased 3.6% (vs preliminary reading of 3.2%), driven by a 4.9% increase in hourly compensation (vs preliminary reading of 5.1%) and a 1.3% increase in productivity (vs preliminary reading of 1.8%).
- From the same quarter a year ago, nonfarm business sector labor productivity increased 2.7%.
Big Picture
- The key takeaway from the report was the friendly inflation view embedded in the softening unit labor costs. They were up just 0.3% over the last four quarters, which is the lowest rate since the fourth quarter of 2013.
Category |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Nonfarm Business Sector |
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Productivity Q/Q |
2.5% |
0.4% |
3.5% |
4.6% |
3.3% |
Unit Labor Costs Q/Q |
0.4% |
3.8% |
-2.8% |
0.1% |
2.5% |
Productivity Y/Y |
2.7% |
2.9% |
2.7% |
2.4% |
1.3% |
Unit Labor Costs Y/Y |
0.3% |
0.9% |
1.7% |
1.9% |
3.6% |