Briefing.com: Productivity-Prel

Updated: 06-Jun-24 09:51 ET

Q1 Productivity-Prel

Updated: 06-Jun-24 09:51 ET

Highlights

Q1 Productivity was revised down to 0.2% (Briefing.com consensus 0.3%) from 0.3%.
Q1 Unit Labor Costs were revised down to 4.0% (Briefing.com consensus 4.7%) from 4.7%.

Key Factors

The productivity increase stemmed from output increasing 0.9% (revised down from 1.3%) and hours worked increasing 0.6% (revised down from 1.0%).
The 4.0% increase in unit labor costs resulted from a 4.2% increase in hourly compensation (revised down from 5.0%) and a 0.2% increase in productivity (revised down from 0.3%).
Manufacturing sector labor productivity was unchanged (revised down from 0.2% increase), as output decreased 0.2% (revised down from unchanged) and hours worked decreased an unrevised 0.2%. Unit labor costs in the total manufacturing sector increased 3.1% (revised down from 3.2%), driven by a 3.1% increase in hourly compensation (revised down from 3.4%) and no change in productivity (revised from 0.2% increase).
From the same quarter a year ago, nonfarm business sector labor productivity increased 2.9% -- the largest four-quarter increase since the first quarter of 2021.

Big Picture

The key takeaway from the report is the downward revision to unit labor costs. Although a backward-looking report (we're two-thirds done with Q2), that revision will take out some of the labor cost inflation sting seen in the advance report.