The BLS reports Productivity rises 0.4% in first-quarter 2018; unit labor costs rise 2.9% (annual rates).

  • Nonfarm business sector labor productivity increased 0.4 percent during the first quarter of 2018 as output increased 2.7 percent and hours worked increased 2.3 percent.
  • From the first quarter of 2017 to the first quarter of 2018, productivity increased 1.3 percent, reflecting a 3.6-percent increase in output and a 2.3-percent increase in hours worked.
  • Manufacturing sector labor productivity decreased 1.2 percent in the first quarter of 2018, as output increased 1.7 percent and hours worked increased 2.9 percent.
  • Productivity declined 0.8 percent in the durable manufacturing sector, as output rose 3.3 percent and hours worked increased 4.2 percent. In the non-durable goods manufacturing sector, a 0.9-percent decrease in productivity reflected no change in output and a 0.9-percent increase in hours worked.

Unit Labor Costs

Image placeholder title

  • Unit labor costs in the nonfarm business sector increased 2.9 percent in the first quarter of 2018, reflecting a 3.3-percent increase in hourly compensation and a 0.4-percent increase in productivity. Unit labor costs increased 1.3 percent over the last four quarters.
  • BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs, and increases in output per hour tend to reduce them.

It appears the marginal employee is not all that productive.

Mike "Mish" Shedlock

Productivity Up 2.9% - Real Hourly Earnings Down: Thank You Fed!

Productivity for the second quarter rose 2.9%. Year-over-year inflation-adjusted hourly earnings are down.

Labor Productivity Dives as Unit Labor Costs Soar

Worker productivity unexpectedly took a steep dive. As a result, production costs soared.

Weak Productivity and Tame Unit Labor Costs

Labor costs and productivity were both weaker than expected.

Labor Productivity Up, Real Hourly Compensation Down

Labor productivity is inching along. Real wages are not keeping up.

Factory Orders Up 1.2%, Led by Transportation, Well Under Consensus

Factory orders rose 1.2% in February vs a consensus estimate of 1.7%. Excluding transportation, orders rose 0.1%.

Employment Costs Rise 0.7 Percent in the First Quarter: Spotlight on Health Care

Employment costs continue to rise at a steady pace, up 0.7 Percent in the fourth and first quarters.

Productivity Tale of Two Sectors: Overall Productivity +3.0%, Manufacturing Productivity -5.0%

Productivity jumped 3.0% in the third quarter with unit labor costs up only 0.5%. In manufacturing, productivity decreased 5.0 percent and unit labor costs increased 6.2 percent.

Industrial Production Up 0.2% - Mostly a Hurricane Artifact

Industrial Production rose 0.2% in November. Excluding the estimated hurricane impact, production would have been flat.

Manufacturing Productivity Declines in 54 of 86 Industries for 2017

A BLS report shows widespread declines in manufacturing and mining productivity.