Productivity falls 1.0% in 1st quarter 2016 (annual rate); unit labor costs rise 4.1%

[mahatmakanejeeves]

Source: U.S. Bureau of Labor Statistics

Economic News Release USDL 16-0880

Productivity and Costs, First Quarter 2016, Preliminary

Transmission of material in this release is embargoed until 8:30 a.m. (EDT) Wednesday, May 4, 2016

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

PRODUCTIVITY AND COSTS
First Quarter 2016, Preliminary

Nonfarm business sector labor productivity decreased at a 1.0-percent annual rate during the first quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 0.4 percent and hours worked increased 1.5 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2015 to the first quarter of 2016, productivity increased 0.6 percent. (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.

Unit labor costs in the nonfarm business sector increased 4.1 percent in the first quarter of 2016, reflecting a 3.0-percent increase in hourly compensation and a 1.0-percent decrease in productivity. Unit labor costs increased 2.3 percent over the last four quarters. (See tables A and 2.)

BLS calculates 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.
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Quarterly and annual data for all sectors for recent years appear in tables 1-6 and appendix tables 1-6. Full historical annual and quarterly measures can be found on the labor productivity and costs home page at www.bls.gov/lpc/#data.

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The revised Productivity and Costs news release for first-quarter 2016 is scheduled to be released on Tuesday, June 7, 2016 at 8:30 a.m. (EDT).

Read more: http://www.bls.gov/news.release/prod2.nr0.htm

[whatthehey]

1. It's not panic time but this one gives me more qualms than moribund ADP

If labor costs more and is less productive, the incentive to add it, already resisted, is diminished. If both go up that's great, but shoppers balk at paying 4% more for 1% less do they not? The same applies to shoppers for new hires.

[Helen Borg]

2. All productivity has been sucked out of the workforce.

Cannot squeeze anymore from empty shells.

[TexasBushwhacker]

4. Yup. Americans are slightly less overworked n/t

[Chakaconcarne]

3. Perhaps workers are pushing back...

In the only way they know how...