∙ U.S. Productivity Slacked Off in Q1...Unit Labor Costs Increased

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Nonfarm business sector labor productivity decreased at a 0.9 percent annual rate during the first quarter of 2012. The decline in productivity reflects increases of 2.4 percent in output and 3.3 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2011 to the first quarter of 2012, productivity increased 0.4 percent as output and hours worked rose 2.7 percent and 2.2 percent, respectively. Manufacturing sector productivity rose 5.2 percent in the first quarter of 2012, as output grew 10.0 percent and hours worked increased 4.6 percent. Over the last four quarters, manufacturing sector productivity increased 2.3 percent, as output increased 5.3 percent and hours rose 2.9 percent-- the largest four-quarter increase in hours worked since the first quarter of 1997 (3.0 percent). Unit labor costs in nonfarm businesses increased 1.3 percent in the first quarter of 2012, while hourly compensation increased 0.4 percent. Unit labor costs rose 0.9 percent over the last four quarters. (BLS defines unit labor costs as the ratio of hourly compensation to labor productivity; increases in hourly compensation tend to increase unit labor costs and increases in output per hour tend to reduce them.) Source: USDOL-BLS

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