Productivity & Costs (Q1 Final): Modest Upward Revisions

June 7, 2016
Bottom Line: Productivity fell in 2016 Q1 but modestly less than was initially reported a month ago, in line with market expectations. Meanwhile, unit labor costs were modestly higher than previously estimated. These revisions reflect the recent adjustments to Q1 GDP, payroll employment, the workweek, and wages and salaries. Given the current state of the economic growth, productivity is increasing only slightly while unit labor costs are rising modestly. Nonfarm Business Productivity was REVISED UP by 0.4 percentage points but still fell by 0.6% in 2016 Q1, in line with market expectations. This revision increased the year-on-year growth rate of labor productivity to 0.7%. Output was revised modestly higher, from 0.4% to 0.9%, reflecting the recent upward adjustment in 2016 Q1 nonfarm business GDP. Hours Worked was unchanged at 1.5. Compensation was revised modestly higher, from 3.0% to 3.9%. Over the past year, compensation has risen by 3.7%. As a result of these adjustments, Unit Labor Costs were REVISED UP from 4.1% to 4.5%. Over the past year, unit labor costs have increased by 3.0%.
Article by contingentmacro