Productivity declines 0.6% in 1st quarter 2016 (annual rate); unit labor costs rise 4.5%

[mahatmakanejeeves]

Source: U.S. Bureau of Labor Statistics

Economic News Release USDL 16-1147

Productivity and Costs, First Quarter 2016, Revised

Transmission of material in this release is embargoed until 8:30 a.m. (EDT) Tuesday, June 7, 2016

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

PRODUCTIVITY AND COSTS
First Quarter 2016, Revised


Nonfarm business sector labor productivity decreased at a 0.6-percent annual rate during the first quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 0.9 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 0.7 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. Measures released today were based on more recent source data than were available for the preliminary report.

Unit labor costs in the nonfarm business sector increased 4.5 percent in the first quarter of 2016, reflecting a 3.9-percent increase in hourly compensation and a 0.6-percent decline in productivity. Unit labor costs increased 3.0 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.
....

______________

The preliminary Productivity and Costs news release for second-quarter 2016 is scheduled to be released on Tuesday, August 9, 2016 at 8:30 a.m. (EDT).

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

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[tonyt53]

1. I read an article a few months ago about productivity being linked to investments by the company

If a company invests in newer technology, the productivity of their employees increases. Right now, American based companies are sitting on about $3 trillion in cash and not investing. The only people in vesting in the US are the foreign-owned companies.

[Bragi]

2. They will invest in robotics and CUT JOBS!

What's bizarre is that eliminating jobs and using more robots, productivity as measured buy economists will go up. Just cutting wages without any investment in anything, will also make for a productivity boost. Productivity isn't a measure of efficiency, it's a measure of how much is paid to workers by employers. Pay them less, productivity goes up, pay them more, it goes down.

[mahatmakanejeeves]

3. "Productivity isn't a measure of efficiency, it's a measure of how much is paid to workers...."

From the BLS release:

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 were based on more recent source data than were available for the preliminary report.

HTH.

Best wishes.

[Bragi]

5. Okay then

Good to know. I think I'm still correct re robotics, though.

[anigbrowl]

6. That is incorrect

Productivity is the ratio of how much value a worker produces to how much the worker is paid. Better-paid workers are often more productive, as Henry Ford discovered. But productivity is a shifting target, because it varies depending on the skills and capital (in the form of both tools and raw materials) available for the worker to do the job. It's not a straight linear relationship of two quantities.

[mahatmakanejeeves]

4. The only people {investing} in the US are the foreign-owned companies.

Full disclosure: I own shares of UNP.

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