WASHINGTON — U.S. nonfarm productivity was revised lower to a 2.3% rate of growth on a downward adjustment to output and a slight upward adjustment to hours worked, data released by the Bureau of Labor Statistics Wednesday showed.
Productivity was originally reported up 3.1% in the preliminary estimate for the third quarter.
Despite the downward revision to productivity growth, which was larger than expected, unit labor costs were revised down to a 2.5% rate of decline from the previously reported 2.4% drop. The reason for that unexpected downward revision to unit labor costs was a downward adjustment to hourly compensation, which is now reported as a 0.2% decline compared to the preliminary estimate of a 0.6% increase.
In addition, unit labor costs are now reported to have declined 0.1% in the second quarter, a sharp downward adjustment from the 2.8% rise that was previously reported. Again, a downward revision to hourly compensation was the key factor, with the new estimate of a 0.2% decline replacing the previous estimate of a 2.7% jump.
Second-quarter productivity was unrevised, still down 0.1% from the previous quarter.
Analysts in a Market News International survey had expected productivity to be revised down to a 2.6% rate of growth in the third quarter and unit labor costs to fall 2.2% after revision.
Third-quarter output was revised down to a 3.2% rate of growth from the preliminary estimate of 3.8%, but up from an unrevised 1.8% increase in the second quarter.
Hours worked is now reported up 0.8%, compared with the 0.6% rise in the preliminary estimate. Hours worked rose an unrevised 2.0% in the second quarter.
Real compensation was revised down to a 3.2% rate of decline in the third quarter from the original estimate of 2.4%. Real compensation fell 4.1% in the second quarter, a much larger decline than the previous 1.3% estimate and in line with the downward adjustment to nominal compensation.
Year-over-year growth in productivity now stands at a 0.9% rate for the third quarter, down slightly from the preliminary estimate of 1.1% and the same as the year-over-year rate in the previous quarter.
Unit labor costs rose 0.4% year over year in the third quarter, much slower than the 1.2% year-over-year rate in the preliminary estimate and down from the 1.0% increase in the revised second-quarter estimate.