–3Q ULC Revised Down On Compensation Revision To -0.2% From Prev +1.4%
–2Q Unit Labor Costs Revised Down To -0.1% From Prev +2.8%
–3Q Productivity Growth High Since 1Q 2010, ULC Drop Most Since 1Q 2010

By Kevin Kastner and Ian McKendry

WASHINGTON (MNI) – U.S. nonfarm productivity was revised lower to a
2.3% rate of growth on a downward adjustment to output and a slight
upward adjustment to hours worked, data released by the Bureau of Labor
Statistics Wednesday showed.

Productivity was originally reported up 3.1% in the preliminary
estimate for the third quarter.

Despite the downward revision to productivity growth, which was
larger than expected, unit labor costs were revised down to a 2.5% rate
of decline from the previously reported 2.4% drop. The reason for that
unexpected downward revision to unit labor costs was a downward
adjustment to hourly compensation, which is now reported as a 0.2%
decline compared to the preliminary estimate of a 0.6% increase.

In addition, unit labor costs are now reported to have declined
0.1% in the second quarter, a sharp downward adjustment from the 2.8%
rise that was previously reported. Again, a downward revision to hourly
compensation was the key factor, with the new estimate of a 0.2% decline
replacing the previous estimate of a 2.7% jump.

Second quarter productivity was unrevised, still down 0.1% from the
previous quarter.

Analysts in a Market News International survey had expected
productivity to be revised down to a 2.6% rate of growth in the third
quarter and unit labor costs to fall 2.2% after revision.

Third quarter output was revised down to a 3.2% rate of growth in
the third quarter from the preliminary estimate of 3.8%, but up from an
unrevised 1.8% increase in the second quarter. Hours worked is now
reported up 0.8%, compared with the 0.6% rise in the preliminary
estimate. Hours worked rose an unrevised 2.0% in the second quarter.

Real compensation was revised down to a 3.2% rate of decline in the
third quarter from the original estimate of a 2.4% decline. Real
compensation fell 4.1% in the second quarter, a much larger decline than
the 1.3% previous estimate and in line with the downward adjustment to
nominal compensation.

Year-over-year growth in productivity now stands at a 0.9% rate for
the third quarter, down slightly from the 1.1% preliminary estimate and
the same as the year/year rate in the previous quarter.

Unit labor costs rose 0.4% year/year in the third quarter, much
slower than the 1.2% year/year rate in the preliminary estimate and down
from the 1.0% rise in the revised second quarter estimate.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: MAUDS$,MT$$$$,M$U$$$,MAUDR$]