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Thursday, May 23, 2019 1:47:33 PM EDT

Productivity-Prel Updated 02-May-19 09:24AM ET

Nonfarm business sector productivity increased 3.6% in the first quarter ( consensus 2.3%) following a downwardly revised 1.3% increase (from 1.9%) for the fourth quarter. The first quarter increase was the strongest pace since the third quarter of 2014.

Unit labor costs decreased 0.9% in the first quarter ( consensus +1.6%) following an upwardly revised 2.5% increase (from 2.0%) in the fourth quarter.

From the first quarter of 2018 to the first quarter of 2019, productivity increased 2.4%. That is the largest four-quarter increase since the third quarter of 2010.

Unit labor costs increased just 0.1% over the last four quarters, which is the slowest pace since the fourth quarter of 2013.

The productivity increase in the first quarter was driven by output increasing 4.1% and hours worked increasing 0.5%.

The key takeaway from the backward-looking report is that it fit quite well with the understanding that U.S. economic activity is solid while inflation pressures are muted.
Nonfarm Business Sector
Productivity Q/Q3.6%1.3%1.9%2.9%0.7%
Unit Labor Costs Q/Q-0.9%2.5%1.6%-2.8%3.5%
Productivity Y/Y2.4%1.7%1.3%1.4%1.1%
Unit Labor Costs Y/Y0.1%1.2%1.1%1.4%2.1%