Updated: 02-May-24 09:44 ET
| Q1 Productivity-Prel |
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| Updated: 02-May-24 09:44 ET |
Highlights
- Nonfarm business sector labor productivity was a lowly 0.3% in the first quarter (Briefing.com consensus 0.8%) following an upwardly revised 3.5% (from 3.2%) in the fourth quarter.
- Unit labor costs, meanwhile, surged 4.7% in the first quarter following a downwardly revised 0.0% reading (from 0.4%) in the fourth quarter.
Key Factors
- The productivity increase stemmed from output increasing 1.3% and hours worked increasing 1.0%.
- The 4.7% increase in unit labor costs resulted from a 5.0% increase in hourly compensation and a 0.3% increase in productivity.
- Manufacturing sector labor productivity increased 0.2%, as output was unchanged and hours worked decreased 0.2%. Unit labor costs in the total manufacturing sector increased 3.2%, driven by a 3.4% increase in hourly compensation and a 0.2% increase in productivity.
- From the same quarter a year ago, nonfarm business sector labor productivity increased 2.9%.
Big Picture
- The key takeaway from the report is that unit labor cost number, stemming in part from a 5.0% increase in hourly compensation, which is still too far detached from an inflation-friendly reading insomuch as the Fed is concerned.
| Category | Q1 | Q4 | Q3 | Q2 | Q1 |
| Nonfarm Business Sector | |||||
| Productivity Q/Q | 0.3% | 3.5% | 4.6% | 3.3% | -0.3% |
| Unit Labor Costs Q/Q | 4.7% | 0.0% | 0.1% | 2.5% | 7.1% |
| Productivity Y/Y | 2.9% | 2.7% | 2.4% | 1.3% | -0.5% |
| Unit Labor Costs Y/Y | 1.8% | 2.4% | 1.9% | 3.6% | 4.2% |