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Real Hourly Compensation continues to drop during the fourth-quarter of 2021
U.S. Productivity Economic Indicators
Modified 2022-04-12T11:34:45-04:00
Goran Soko / CSIMarket.com Contributer
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Americans are earning less (inflation adjusted) per hour, despite the gain in productivity, as decline in manufacturing offset an increase in nonfarm business productivity.In the fourth-quarter of 2021 U.S. productivity soared by 6.6 % on the seasonally adjusted basis, reported by the Labor Department. The increase in hourly income has not mathced the inflation, as a result Americans have to dip into their savings, or cut on spending. Consumer spending is by far the bigger source of U.S. growth, in order to increase consumer spending, wages have to match or outpace price increases.
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Over the past 12 months, driven by the increase in output, businesses productivity have climbed by 2 %. Over the past 12 months, business production grew by 6.8 %
Real hourly compensation has declined by smaller rate than a quarter ago. Economists warn that consumers cannot continue to spend at their current rates unless incomes rise and the unemployment rate declines, the real hourly compensation declined by -0.2 % on the seasonally adjusted basis, led by decline in nonfarm business, durable goods manufacturing and in total manufacturing Over the past 12 months, real hourly compensation decreased by -0.2 %.
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Output
U.S. business output continues to grow by higher rate, production soared by 9 % on the seasonally adjusted basis, as production in nonfarm businesses increased the most.
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Category
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U.S. labor costs have increased by smaller rate than a quarter ago, the business labor costs increased by 1 % on the seasonally adjusted basis, as labor costs in manufacturing of nondurable goods increased the most.
Increases in hourly compensation, lead to increase in unit labor costs Over the last 12 months, labor costs soared by 3.7 %.
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Productivity
(Y / Y in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
2 % |
-0.7 % |
2 % |
4 % |
2.4 % |
| Nonfarm business |
|
1.9 % |
-0.6 % |
1.8 % |
4.1 % |
2.4 % |
| Manufacturing |
|
1.3 % |
2.2 % |
7.2 % |
1.8 % |
2.8 % |
| Durable Goods |
|
2.2 % |
3 % |
12.5 % |
4 % |
6.4 % |
| Nondurable Goods |
|
0.3 % |
1 % |
2 % |
-1 % |
2.8 % |
Productivity
These productivity measures describe the relationship
between real output and the labor time involved in
its production. They show the changes from period
to period in the amount of goods and services produced
per hour. Although these measures relate output to
hours at work of all persons engaged in a sector,
they do not measure the specific contribution of labor,
capital, or any other factor of production. Rather,
they reflect the joint effects of many influences,
including changes in technology; capital investment;
level of output; utilization of capacity, energy,
and materials; the organization of production; managerial
skill; and the characteristics and effort of the work
force. |
Productivity
(Q / Q in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
6.6 % |
-5 % |
2.4 % |
5.2 % |
-4.9 % |
| Nonfarm business |
|
6.6 % |
-5.2 % |
2.1 % |
5.4 % |
-4.2 % |
| Manufacturing |
|
-0.1 % |
-1.8 % |
8 % |
-1.7 % |
5 % |
| Durable Goods |
|
2.8 % |
0.7 % |
4.6 % |
1.1 % |
6.4 % |
| Nondurable Goods |
|
-4 % |
-3.6 % |
10 % |
-3.7 % |
2.8 % |
Output
(Y / Y in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
6.8 % |
6 % |
15.7 % |
1.1 % |
-2.5 % |
| Nonfarm business |
|
7 % |
6.2 % |
15.8 % |
1.1 % |
-2.6 % |
| Manufacturing |
|
4.6 % |
6.1 % |
17.1 % |
-0.9 % |
13.1 % |
| Durable Goods |
|
6.9 % |
9.7 % |
-0.9 % |
5.7 % |
12.8 % |
| Nondurable Goods |
|
4 % |
5.5 % |
10.7 % |
-2.2 % |
13.1 % |
Output
(Q / Q in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
9 % |
1.5 % |
7.9 % |
8.3 % |
5.5 % |
| Nonfarm business |
|
9.1 % |
1.8 % |
8.1 % |
8.6 % |
5.5 % |
| Manufacturing |
|
5.8 % |
5.1 % |
5.5 % |
1.4 % |
13 % |
| Durable Goods |
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6.9 % |
9.7 % |
-0.9 % |
5.7 % |
12.8 % |
| Nondurable Goods |
|
4.5 % |
0.3 % |
12.9 % |
-3 % |
13.1 % |
Unit Labor Costs
(Y / Y in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
3.7 % |
6.5 % |
0.2 % |
4.1 % |
4.1 % |
| Nonfarm business |
|
3.5 % |
6.3 % |
0.2 % |
4.1 % |
4.2 % |
| Manufacturing |
|
1.5 % |
3.7 % |
-6.1 % |
5.1 % |
-3.2 % |
| Durable Goods |
|
-0.9 % |
4 % |
-10.9 % |
3 % |
-11.7 % |
| Nondurable Goods |
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5.6 % |
2.7 % |
-0.8 % |
8 % |
-3.2 % |
Unit Labor Costs
The measures of unit labor costs
describe the relationship between compensation per hour and productivity,
or real output per hour, and can be used as an indicator of inflationary
pressure on producers. Increases in hourly compensation increase unit
labor costs; labor productivity increases offset compensation increases
and lower unit labor costs. |
Unit Labor Costs
(Q / Q in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
1 % |
9.9 % |
1.4 % |
1.9 % |
6 % |
| Nonfarm business |
|
0.9 % |
9.6 % |
1.3 % |
1.7 % |
6 % |
| Manufacturing |
|
1.4 % |
4.6 % |
-3 % |
10.7 % |
-8.8 % |
| Durable Goods |
|
-3.3 % |
1 % |
0.7 % |
10.4 % |
-11.7 % |
| Nondurable Goods |
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9.4 % |
8 % |
-5 % |
7.6 % |
-3.2 % |
Hours Worked
(Y / Y in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
4.7 % |
6.7 % |
13.5 % |
-2.8 % |
-4.8 % |
| Nonfarm business |
|
4.9 % |
6.8 % |
13.7 % |
-2.9 % |
-4.9 % |
| Manufacturing |
|
3.2 % |
3.9 % |
9.3 % |
-2.6 % |
10.1 % |
| Durable Goods |
|
2.9 % |
3.6 % |
9.7 % |
-3.5 % |
6 % |
| Nondurable Goods |
|
3.7 % |
4.4 % |
8.6 % |
-1.2 % |
10.1 % |
Hours Worked
Hours data for the labor productivity and cost measures
include hours for all persons working in the sector—wage and salary
workers, the self-employed and unpaid family workers. |
Hours Worked
(Q / Q in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
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2.3 % |
6.9 % |
5.4 % |
2.9 % |
10.9 % |
| Nonfarm business |
|
2.4 % |
7.4 % |
6 % |
3 % |
10.1 % |
| Manufacturing |
|
5.8 % |
7 % |
-2.3 % |
3.1 % |
7.6 % |
| Durable Goods |
|
4 % |
8.9 % |
-5.2 % |
4.6 % |
6 % |
| Nondurable Goods |
|
8.8 % |
4 % |
2.7 % |
0.7 % |
10.1 % |
Real Hourly Compensation
(Y / Y in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
-0.2 % |
-2.1 % |
-4.2 % |
3.4 % |
-1.6 % |
| Nonfarm business |
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-1.1 % |
0.4 % |
-2.7 % |
6.3 % |
5.3 % |
| Manufacturing |
|
-3.6 % |
0.6 % |
-4 % |
5 % |
-2.9 % |
| Durable Goods |
|
-5.1 % |
1.7 % |
-4.4 % |
5.1 % |
-8.2 % |
| Nondurable Goods |
|
-0.7 % |
-1.4 % |
-3.5 % |
4.9 % |
-2.9 % |
Real Hourly Compensation
(Q / Q in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
-0.2 % |
-2.1 % |
-4.2 % |
3.4 % |
-1.6 % |
| Nonfarm business |
|
-0.3 % |
-2.5 % |
-4.6 % |
3.3 % |
-0.9 % |
| Manufacturing |
|
-6.1 % |
-3.7 % |
-3.4 % |
5 % |
-6.5 % |
| Durable Goods |
|
-7.9 % |
-4.6 % |
-2.9 % |
7.6 % |
-8.2 % |
| Nondurable Goods |
|
-2.6 % |
-2.3 % |
-3.6 % |
-0.1 % |
-2.9 % |
Hourly Compensation
(Y / Y in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
1.3 % |
2.7 % |
4.7 % |
8.9 % |
-4.2 % |
| Nonfarm business |
|
7.7 % |
4.4 % |
3.9 % |
7.3 % |
0.8 % |
| Manufacturing |
|
-0.6 % |
1.7 % |
5.3 % |
11.7 % |
-0.5 % |
| Durable Goods |
|
5.1 % |
4.1 % |
4.5 % |
3.6 % |
1.1 % |
| Nondurable Goods |
|
5.9 % |
3.8 % |
1.2 % |
6.9 % |
-0.5 % |
Hourly Compensation
The measure includes accrued wages and salaries,
supplements, employer contributions to employee benefit plans, and taxes.
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Hourly Compensation
(Q / Q in %) |
IV Quarter
2021
prel. |
III Quarter
2021
prel. |
II Quarter
2021
prel. |
I Quarter
2021
prel. |
IV Quarter
2020
prel. |
| Total Business |
|
7.7 % |
4.4 % |
3.9 % |
7.3 % |
0.8 % |
| Nonfarm business |
|
7.5 % |
3.9 % |
3.4 % |
7.2 % |
1.5 % |
| Manufacturing |
|
1.3 % |
2.7 % |
4.7 % |
8.9 % |
-4.2 % |
| Durable Goods |
|
-0.6 % |
1.7 % |
5.3 % |
11.7 % |
1.1 % |
| Nondurable Goods |
|
5.1 % |
4.1 % |
4.5 % |
3.6 % |
6.3 % |
• Source: Department of Labor, BLS.gov
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