2018 Economic Calendar
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Productivity and Costs  
Released On 6/6/2018 8:30:00 AM For Q1(r):18
PriorConsensusConsensus RangeActual
Nonfarm productivity - Q/Q change - SAAR0.7 %0.7 %0.3 % to 0.8 %0.4 %
Unit labor costs - Q/Q change - SAAR2.7 %2.8 %2.7 % to 3.0 %2.9 %

A small downward revision to output and a small upward revision to hours worked pulled down the second estimate of first-quarter nonfarm productivity to an even more paltry 0.4 percent quarterly gain from 0.7 percent in the first estimate. This in turn lifts unit labor costs to 2.9 percent from the first estimate's 2.7 percent.

Looking at year-on-year change, productivity rose 1.3 percent in the first quarter, which is right in line with trend, while labor costs also rose 1.3 percent which is an improvement from the fourth quarter's 1.8 percent rise.

When adjusted for inflation, real compensation remains in the negative column at a quarterly annualized rate of minus 0.2 percent. Readings in this report are all vital signs for the economy and the results point to subdued labor activity consistent with a mature expansion and high levels of employment.

Consensus Outlook
There was little change in the second estimate of first-quarter GDP and little change is the expectation for the second estimate of first-quarter productivity, at 0.7 percent growth to match the first estimate with unit labor costs at 2.8 percent vs the first estimate's 2.7 percent. Output slowed in the first quarter but so did hours worked while compensation rose.

Productivity measures the growth of labor efficiency in producing the economy's goods and services. Unit labor costs reflect the labor costs of producing each unit of output. Both are followed as indicators of future inflationary trends.  Why Investors Care
Nonfarm productivity growth has been historically low in recent years raising questions over lack of business investment in new technologies, lack of motivation in the workforce, and the mis-measurement of service productivity. When productivity growth abates, unit labor costs tend to rise; when productivity growth accelerates, labor costs tend to fall.
Data Source: Haver Analytics

2018 Release Schedule
Released On: 2/13/75/36/68/159/611/112/5
Release For: Q4(p):17Q4(r):17Q1(p):18Q1(r):18Q2(p):18Q2(r):18Q3(p):18Q3(r):18

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