Nonfarm business sector productivity increased 3.6% in the first quarter (Briefing.com 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 (Briefing.com 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|
|Unit Labor Costs Q/Q||-0.9%||2.5%||1.6%||-2.8%||3.5%|
|Unit Labor Costs Y/Y||0.1%||1.2%||1.1%||1.4%||2.1%|