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US productivity falls again in Q1

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US productivity falls again in Q1

1.9% drop follows Q4 decline of 2.1%.

Nonfarm business sector labor productivity decreased at a 1.9% annual rate during the first quarter of 2015, the U.S. Bureau of Labor Statistics reported today, as output declined 0.2% and hours worked increased 1.7%.

Analysts had expected a drop in productivity of 1.8% during the quarter.

The decline in productivity follows a decline of 2.1% in the fourth quarter of 2014, which represents the first back-back decline since 2006. From the first quarter of 2014 to the first quarter of 2015, productivity increased 0.6%, reflecting increases in output and hours worked of 3.5% and 2.9%, respectively. 

Unit labor costs in the nonfarm business sector increased 5.0% in the first quarter of 2015, reflecting a 3.1% increase in hourly compensation and a 1.9% decline in productivity. Unit labor costs increased 1.1% over the last four quarters. 

Manufacturing sector productivity decreased 1.1% in the first quarter of 2015, as output decreased 1.2% and hours worked edged down 0.1%. Productivity decreased 2.3% in the durable manufacturing sector and was unchanged in the nondurable manufacturing sector.

Over the last four quarters, manufacturing productivity increased 1.4%, as output increased 3.8% and hours increased 2.3%. Unit labor costs in manufacturing increased 2.7% in the first quarter of 2015 and decreased 0.7% from the same quarter a year ago. 

 

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