U.S. Productivity Tumbles 3.1% In Q1, More Than Previously Estimated
2015-06-08Reflecting a much bigger than previously estimated drop in output, the Labor Department released a report on Thursday showing that U.S. labor productivity fell by even more than expected in the first quarter of 2015.
Economists had expected a revised decrease of about 2.9 percent, which would still reflect a notable acceleration from the 2.1 percent drop seen in the fourth quarter.
The downward revision to productivity, a measure of output per hour, was primarily due to the much bigger than previously estimated drop in output.
The Labor Department said output slumped by a revised 1.6 percent in the first quarter compared to the previously reported 0.2 percent dip and the 2.6 percent increase seen in the fourth quarter.
After jumping by 4.9 percent in the fourth quarter, hours worked increased by 1.6 percent in the first quarter, reflecting a slight downward revision from the 1.7 percent increase previously reported.
Meanwhile, the report also said unit labor costs jumped by an upwardly revised 6.7 percent in the first quarter versus the previously reported 5.0 percent increase. Costs had been expected to surge up by a revised 6.0 percent.
The jump in costs in the first quarter follows a 5.6 percent increase in the fourth quarter, which was upwardly revised from 4.2 percent.
The increase in unit labor costs reflected the drop in productivity as well as an increase in hourly compensation, which surged up by 3.3 percent in the first quarter after climbing by 3.4 percent in the fourth quarter.
Real hourly compensation, which takes changes in consumer prices into account, soared by 6.5 percent in the first quarter following a 4.2 percent increase in the previous quarter.
Compared to the same quarter a year ago, productivity rose by 0.3 percent in the first quarter, as output climbed by 3.2 percent and hours worked increased by 2.8 percent.
Unit labor costs were up by 1.8 percent year-over-year in the first quarter amid a 2.1 increase in hourly compensation.
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