U.S. Productivity Rose at 3.1% Rate in Third Quarter

[mahatmakanejeeves]

Last edited Fri Feb 3, 2017, 03:02 PM - Edit history (3)

Source: The Wall Street Journal.

U.S. Productivity Rose at 3.1% Rate in Third Quarter

Latest figure, unchanged from the initial estimate, the biggest gain in two years

By Josh Mitchell and Ben Leubsdorf

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[link:https://twitter.com/JMitchellWSJ@JMitchellWSJ]

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[link:https://twitter.com/BenLeubsdorf@BenLeubsdorf]

Dec. 6, 2016 8:35 a.m. ET

WASHINGTON The cost of labor in the U.S. grew more quickly than previously thought in the spring and summer, the latest sign that Americans wages are picking up. ... The new data came in a quarterly report Tuesday on productivity. The Labor Department reaffirmed its initial estimate that nonfarm business productivitya measure of the goods and services produced per hour workedgrew at a 3.1% seasonally adjusted annual pace in the third quarter, the biggest gain in two years. Economists had expected the revised figure to show a 3.3% increase.

But the government made big revisions to unit labor costs, a measure of the expense imposed on firms to compensate workers for their output. Such costs grew at a 0.7% rate in July through September, more than double the agencys initial estimate of a 0.3% gain. Economists had expected the new figure to show a 0.2% increase.

Unit labor costs grew at a 6.2% pace in the second quarter, up from the prior estimate of a 3.9% increase. ... The higher costs in the spring and summer mainly reflected rising hourly wages. Consistent hiring in recent years has pushed down unemployment and left the job market with fewer available workers relative to openings. Companies, in turn, are having to compete more aggressively to retain and hire workers, pushing up wages and benefits.
....

Productivity growth has been slowing for years, and particularly since the recession. ... Before the third quarter, productivity had declined for three consecutive quarters. Productivity was flat in the third quarter compared with a year earlier. From 1947 to 2015, productivity grew an average 2.2% a year. ... The burst in productivity in the last quarter coincided with a rebound in economic growth. The economy grew at a 3.2% annual rate from July through September, up from pace of just above 1% in the first half of the year, according to Commerce Department data. ... The Labor Department report on productivity can be accessed at https://bls.gov/lpc .

Read more: http://www.wsj.com/articles/u-s-productivity-rose-at-3-1-rate-in-third-quarter-1481031303

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This might be pay-per-view. I have found that you can beat the paywall by accessing the article via Google News. Also, some local public libraries have subscription services that provide online access to print journals.

Takeaway:

The higher costs in the spring and summer mainly reflected rising hourly wages. Consistent hiring in recent years has pushed down unemployment and left the job market with fewer available workers relative to openings. Companies, in turn, are having to compete more aggressively to retain and hire workers, pushing up wages and benefits.

https://bls.gov/lpc

Productivity rises 3.1% in 3rd quarter 2016 (annual rate); unit labor costs rise 0.7%
https://www.bls.gov/news.release/prod2.nr0.htm

Economic News Release Economic News Release USDL 16-2252

Productivity and Costs, Third Quarter 2016, Revised

Transmission of material in this release is embargoed until 8:30 a.m. (EST) Tuesday, December 6, 2016

Technical information: [phone] [e-mail] www.bls.gov/lpc
Media contact: [phone] [e-mail]

PRODUCTIVITY AND COSTS
Third Quarter 2016, Revised

Nonfarm business sector labor productivity increased at a 3.1-percent annual rate during the third quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 3.6 percent and hours worked increased 0.5 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The quarterly increase in nonfarm business sector labor productivity was the first increase after three consecutive declines in the measure. From the third quarter of 2015 to the third quarter of 2016, productivity was unchanged. (See table A.)

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers. Measures released today are based on more recent source data than were available for the preliminary report.

Unit labor costs in the nonfarm business sector increased 0.7 percent in the third quarter of 2016, reflecting a 3.8-percent increase in hourly compensation and a 3.1-percent increase in productivity. Unit labor costs increased 3.0 percent over the last four quarters. (See tables A and 2.)
....

Complete annual and quarterly data series can be found on the Productivity and Costs home page: www.bls.gov/lpc/#data.


[center]Facilities for Sensory Impaired[/center]

Information from this release will be made available to sensory impaired individuals upon request. Voice phone: [phone], Federal Relay Services: 1-800-877-8339.



Please do not link to grassmole taking credit for this.

[Skittles]

1. so I'm sure we'll all be getting big raises

riiiiiiiiiight

[TomCADem]

2. Middle class incomes had their fastest growth on record last year

Ask and you shall receive.

https://www.washingtonpost.com/news/wonk/wp/2016/09/13/the-middle-class-and-the-poor-just-had-the-best-year-since-the-end-of-the-great-recession/?utm_term=.9c8614ae2241

Middle-class Americans and the poor enjoyed their best year of economic improvement in decades in 2015, the Census Bureau reported Tuesday, a spike that broke a years-long streak of disappointment for American workers but did not fully repair the damage inflicted by the Great Recession.

Real median household income was $56,500 in 2015, the bureau reported, up from $53,700 in 2014. That 5.2 percent increase was the largest, in percentage terms, recorded by the bureau since it began tracking median income statistics in the 1960s.

In addition, the poverty rate fell by 1.2 percentage points, the steepest decline since 1968. There were 43.1 million Americans in poverty on the year, 3.5 million fewer than in 2014. The share of Americans who lack health insurance continued a years-long decline, falling 1.3 percentage points, to 9.1 percent.

A combination of forces fueled the gains, including an improving job market, low inflation and rising wages, particularly for low-earning workers who may have benefited from state and local initiatives to boost minimum wages.