June 6, 2018
U.S. Bureau of Labor Statistics released its labor productivity report today. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers.
According to the report, 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 at a slower pace of 2.3 percent. Year over year, 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.
Unit labor costs in the nonfarm business sector increased 2.9 percent in the first quarter of 2018, relative to 1.3 percent over the last four quarters. This reflected a 3.3 percent increase in hourly compensation and a 0.4 percent increase in productivity.
For the 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 and 0.9 percent for both durable and non-durable goods respectively. Conversely, over the last four quarters, total manufacturing sector productivity increased 0.3 percent, as output increased 2.0 percent and hours worked increased 1.7 percent.
Also, for nonfinancial corporate sector, productivity increased 1.9 percent in the first quarter of 2018 and increased 1.7 percent over the last four quarters. According to the latest release, “unit profits of nonfinancial corporations fell at a 9.5 percent annual rate in the first quarter of 2018 and increased 1.7 percent over the last four quarters.”
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