Research >> Economics
4Q2014 Productivity Growth Decreased 1.8%
Nonfarm business sector labor productivity decreased at a 1.8 percent annual rate during the fourth quarter of 2014, the U.S. Bureau of Labor Statistics reported today, as output increased 3.2 percent and hours worked increased 5.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The increase in hours worked is the largest increase in this series since a gain of 5.7 percent in the fourth quarter of 1998. From the fourth quarter of 2013 to the fourth quarter of 2014, productivity was unchanged as output and hours worked both increased 3.1 percent. Annual average productivity increased 0.8 percent from 2013 to 2014.
Unit labor costs in the nonfarm business sector increased 2.7 percent in the fourth quarter of 2014, reflecting a 0.9 percent increase in hourly compensation and a 1.8 percent decline in productivity. Unit labor costs increased 1.9 percent over the last four quarters.
Manufacturing sector productivity increased 1.3 percent in the fourth quarter of 2014, as output increased 5.7 percent and hours worked increased 4.3 percent. Productivity increased 1.5 percent in the durable manufacturing sector and increased 0.2 percent in the nondurable manufacturing sector. (See tables A, 3, 4, and 5.) Over the last four quarters, manufacturing productivity increased 2.8 percent, as output increased 4.8 percent and hours increased 1.9 percent. Unit labor costs in manufacturing increased 0.2 percent in the fourth quarter of 2014 and decreased 0.4 percent from the same quarter a year ago.
Nonfarm business sector productivity grew 0.8 percent in 2014, as output and hours increased 3.1 percent and 2.2 percent, respectively. This increase in productivity is similar to the increases of 0.9 percent in 2013 and 1.0 percent in 2012. These rates are slower than the long-term average annual rate of productivity growth since 1947 (2.2 percent), and reflect steady growth in both output and hours.
Unit labor costs rose 1.5 percent in 2014, as hourly compensation grew faster than productivity. Real hourly compensation, which takes into account changes in consumer prices, increased 0.7 percent in 2014.
In the manufacturing sector, productivity increased 2.5 percent from 2013 to 2014, and unit labor costs were unchanged. Real hourly compensation in manufacturing increased 0.8 percent--the first annual increase in the series since 2009 (3.8 percent).
In the third quarter of 2014, nonfarm business productivity was revised up 1.4 percentage points, to an increase of 3.7 percent; this is due solely to an upward revision to output, as hours worked were unrevised. Unit labor costs for the nonfarm business sector fell 2.3 percent in the third quarter--rather than falling 1.0 percent as previously reported--due solely to the upward revision to productivity
Posted: February 5, 2015 Thursday 08:30 AM