Revisions confirm steep decline in U.S. productivity in second quarter
Source: Reuters
U.S. Markets
September 1, 2022
9:04 AM EDT
Last Updated 24 min ago
Revisions confirm steep decline in U.S. productivity in second quarter
Reuters
WASHINGTON, Sept 1 (Reuters) - U.S. worker productivity plunged in the second quarter, leading to the largest year-on-year decline on record, the government confirmed on Thursday, keeping upward pressure on labor costs.
Nonfarm productivity, which measures hourly output per worker, contracted at a 4.1% annualized rate last quarter, the Labor Department said. That was revised up from the previously reported 4.6% pace of contraction reported last month. Productivity tumbled at a 7.4% rate in the first quarter. ... Economists polled by Reuters had expected that pace of decline in productivity would be revised to 4.5%.
Productivity fell at 2.4% rate from a year ago, instead of the 2.5% pace estimated last month. It was still the biggest year-on-year decline since the government started tracking the series in the first quarter of 1948.
The decline in productivity, against the backdrop of fairly strong job growth, is likely unsustainable. That has made economists expect that hiring will slow down in the coming months. Job growth averaged about 461,300 per month in the first half of the year and has outperformed the overall economy.
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Read more: https://www.reuters.com/markets/us/revisions-confirm-steep-decline-us-productivity-second-quarter-2022-09-01/
Yeah, but:
https://www.marketwatch.com/story/u-s-q2-labor-productivity-decline-not-as-large-as-initially-estimated-11662036696
Economic Report
U.S Q2 labor productivity decline not as large as initially estimated
Published: Sept. 1, 2022 at 8:51 a.m. ET
By Greg Robb
Unit labor costs revised to 10.2% gain
U.S. labor productivity fell a revised 4.1% in the second quarter, not as steep a decline as the initial estimate of a 4.6 % drop, the Labor Department said Thursday. ... Output fell 1.4% in the second quarter while hours worked rose 2.7%.
The cost of labor rose a revised 10.2% in the April-June quarter, down from the initial estimate of a 10.8% increase, the government said. ... Productivity fell 7.4% in the first quarter.
Productivity rose sharply in the quarters immediately after the pandemic but has turned negative in recent months. ... Lower productivity can fuel inflation because businesses have to push up costs when workers demand higher wages.
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CentralMass
(15,265 posts)working remotely then they are being physically back at work ?
Initech
(99,914 posts)My firm definitely caught a few remote workers lying about what they were doing, and I've seen people out in public on their devices claiming that they were working from home. I can imagine we are not the only ones.
CentralMass
(15,265 posts)Initech
(99,914 posts)But then again everyone did. But two years later Ive definitely seen people in public just flat out lying about working at home. Theres definitely people out there taking advantage of the situation and you cant deny that.
CentralMass
(15,265 posts)Fullduplexxx
(7,818 posts)Farmer-Rick
(10,072 posts)A loss in sales before layoffs begin? Sometimes not though.
But it's an interesting number to look at.
mahatmakanejeeves
(56,894 posts)Productivity and Costs, Second Quarter 2022, Revised
Transmission of material in this release is embargoed until 8:30 a.m. (ET) Thursday, September 1, 2022
Technical information: (202) 691-5606 Productivity@bls.gov www.bls.gov/productivity
Media contact: (202) 691-5902 PressOffice@bls.gov
PRODUCTIVITY AND COSTS
Second Quarter 2022, Revised
Nonfarm business sector labor productivity decreased 4.1 percent in the second quarter of 2022, the U.S. Bureau of Labor Statistics reported today, as output decreased 1.4 percent and hours worked increased 2.7 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The 4.1-percent decrease in labor productivity reported today for the second quarter of 2022 is a 0.5-percentage point upward revision from the preliminary estimate of a 4.6-percent decrease, primarily driven by a 0.7-percentage point upward revision to output. From the same quarter a year ago, nonfarm business sector labor productivity decreased 2.4 percent. This is the largest decline in the series, which begins in the first quarter of 1948. (See table A1.)
Unit labor costs in the nonfarm business sector increased 10.2 percent in the second quarter of 2022, reflecting a 5.7-percent increase in hourly compensation and a 4.1-percent decrease in productivity. Unit labor costs increased 9.3 percent over the last four quarters. (See tables A1 and 2.) This is the largest four-quarter increase in this measure since a 10.6-percent increase in the first quarter of 1982. 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 productivity tend to reduce them.
Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers. The second quarter of 2022 is the second consecutive quarter in which output per hour worked declined; labor productivity fell 7.4 percent in the first quarter of 2022. The productivity declines over these two quarters reduced the average annual productivity growth rate since the fourth quarter of 2019--the last quarter not affected by the COVID-19 pandemic--to 0.6 percent in the nonfarm business sector. Output and hours worked in the nonfarm business sector are now 3.1 percent and 1.5 percent above their fourth-quarter 2019 levels, respectively.
Hourly compensation increased 5.7 percent in the nonfarm business sector in the second quarter of 2022. Real hourly compensation, which takes into account changes in consumer prices, decreased 4.4 percent in the second quarter of 2022, which followed a 4.4-percent decline in the first quarter of 2022. The consumer price series, which is used to estimate real hourly compensation, grew 10.5 percent in the second quarter of 2022, the largest increase since an 11.6-percent increase in the first quarter of 1981 (seasonally adjusted annual rates). See Footnote 2 for more information.
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Complete quarterly and annual data series can be found on the Productivity and Costs home: www.bls.gov/productivity/data-overview.htm.
______________
The preliminary Productivity and Costs news release for third-quarter 2022 is scheduled to be released on Thursday, November 3, 2022 at 8:30 a.m. (ET).
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Information from these releases will be made available to sensory impaired individuals upon request. Voice phone: 202-691-5200, Federal Relay Services: 1-800-877-8339.
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Historic NY
(37,449 posts)The nonfarm payroll (NFP) report is a key economic indicator for the United States and represents the total number of paid workers in the U.S. excluding those employed by farms, the federal government, private households, and nonprofit organizations.
They aren't manufacturing job.
mahatmakanejeeves
(56,894 posts)The manufacturing labor productivity index is 4.7 percent higher in second-quarter 2022 than in fourth-quarter 2019, corresponding to an annual labor productivity growth rate of 1.9 percent during that period. Manufacturing sector output is now 3.5 percent above its level in the fourth quarter of 2019, the last quarter not affected by the COVID-19 pandemic. Hours worked in manufacturing remain 1.2 percent below the fourth-quarter 2019 level.
So does the nonfarm payroll report. From last month:
Fri Aug 5, 2022, 09:06 AM: From the source:
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In July, the average workweek for all employees on private nonfarm payrolls was 34.6 hours for the fifth month in a row. In manufacturing, the average workweek for all employees held at 40.4 hours, and overtime increased by 0.1 hour to 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained unchanged at 34.0 hours. (See tables B-2 and B-7.)
Historic NY
(37,449 posts)as supplies have stabilized. I tend to think it's a new business model on carrying large inventories. Home Improvement stores only stock a finite supply of products. They now deal with on-demand home delivered orders or in-store pickup orders. They need less help. Appliances are the same way. Many of the major auto companies are adopting the same system. Imagine dealers not having to floor plan vehicles and the interest on the unsold ones. I went to a store to purchase and item on sale, but it wasn't in the store, it had to be done online and shipped to my home. I just bought an appliance on-line that is not carry in a store, it was delivered and installed in 2 days. I will order a fridge next and pass the old one onto Habitat.
Perhaps Covid has changed more than just how Americans shopped, but also how it produces stuff. Computers seem to have replaced some workers, My local Shoprite, is converting the majority of the store to scanners. The will need less cashiers to service the front end. They removed the Rx section, took out the customer lounge and replace the front in with delivery coolers, for shop at home.
We're being Amazoned
Baggies
(503 posts)Just kidding. I was with the Federal Reserve for 30 years (NY, SF, Atl) so I know what it means. I will be interested in reading what others believe it means and internally reacting accordingly.
mahatmakanejeeves
(56,894 posts)I try to post of schedule of the upcoming financial news releases every week over in the Economy group.
Baggies
(503 posts)LymphocyteLover
(5,601 posts)be maintained... doesn't mean 2022 didn't have productivity