–Output +3.7%, Hours +1.4%; ULC Implies Better Margins or Cost Offsets
By Joseph Plocek
WASHINGTON (MNI) – The U.S. Q3 productivity revisions were a little
less favorable than expected, but generally in line with the improved
GDP data.
Q3 nonfarm productivity was revised to +2.3% (was +1.9%
previously), in line with higher GDP, but Unit Labor Costs were
unrevised at -0.1%. Productivity is up 2.5% over the year, so the Q3
rate was in line with trend.
Unit Labor Costs for Q2 were revised substantially higher in an
unusual move, to a massive +4.9%, reflecting upward revisions to hourly
compensation. Some productivity data were revised back to 1987 to
reflect new output indices constructed from updated GDP data.
The Labor Department estimated Q3 output at +3.7% and hours worked
+1.4%. Perhaps as important is that over the last four quarters, ULC are
down 1.1%, suggesting margins and profits improved, or that higher
materials input costs were offset by lower labor charges.
These are favorable data but are revisions and thus of limited
interest. To some extent, the productivity gain also reflected a rebound
from the revised -1.8% in Q2.
In the manufacturing sector, productivity was up 0.6% as output
posted +4.2% and hours +3.6%. Real hourly manufacturing compensation was
up 0.1%. Durables manufacturing productivity posted -0.5% as workers
were added in the upturn; nondurables productivity was +3.2%.
**Market News International Washington Bureau: (202)371-2121**
[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]
