The attached file contains this articles commentary as well as tables and charts of the data.
Productivity: Rebound in 4Q
February 3, 2022
Bottom Line: Productivity rose sharply in the 4th Quarter as output increased over 9% and hours worked increased just 2.4%, according to the preliminary report. This follows a one-off decline in the 3rd Quarter due to strong hiring. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons. Thus, it's even more impressive that output and hours worked increased for the sixth consecutive Quarter after the historic declines in the early days of the pandemic. Overall, the trend in productivity continued to move higher in the 4th Quarter after a brief downtick as businesses brought back employees in the 3rd Quarter.Nonfarm Business Productivity ROSE by 6.6% in 2021 Q4, compared with market expectations for an increase of 3.8%. Productivity is now 2.0% ABOVE its year ago level.Output ROSE by 9.2%, in line with the Q4 increase in nonfarm business GDP. With its recent gains, output is now 7.0% ABOVE its year ago level. Hours Worked ROSE by 2.4% because of the solid gains in private employment and a steady workweek. Hours worked are now 4.9% ABOVE their year-ago level.Compensation ROSE by 6.9% and is now 5.1% ABOVE its year-ago level. Quarterly compensation has been quite volatile in recent years but the trend turned higher in 2017.Unit Labor Costs ROSE by 0.3%, compared with market expectations for an increase of 1.0%. Unit labor costs are now 3.1% ABOVE their year ago level.
Article by Contingent Macro Advisors