Keeping you up to date on the latest data releases.
- Productivity and Costs
Nonfarm business sector productivity—real output per hour of all persons—fell to a 0.7 percent decline in the second quarter after previously being estimated as a decrease of 0.3 percent. This is now a steeper decline than the 0.6 percent drop reported in the first quarter. Productivity is now up just 0.7 percent since last year, slower than the first quarter’s 1.2 percent gain. Real output was the culprit for the drop in productivity, as it was downwardly revised from 1.8 percent to 1.3 percent. Hours were unchanged at 2.0 percent. Hourly compensation received an extra 0.8 percentage point, jumping to 2.7 percent growth in the second quarter. However, after adjusting for price changes, real compensation remained negative at a 1.4 percent decline. The downward revisions to productivity and upward revisions to compensation boosted unit labor costs—compensation per hour divided by output per hour—from an initial estimate of 2.2 percent to a revised estimate of 3.3 percent. First quarter unit labor cost growth was also revised to 6.2 percent from 4.8 percent after revisions to first-quarter compensation. On a year-over-year basis, unit labor costs are now up 1.9 percent, its fastest pace since 2008.