WASHINGTON – U.S. nonfarm productivity was revised to an annual rate of increase of 8.1% for the third quarter, down from the 9.5% increase reported last month, but still the largest productivity increase in six years, the Labor Department said today.
Unit labor costs were revised to a 2.5% annual rate of decline from a 5.2% decline initially reported. The revision was partly due to upwardly revised hourly compensation to 5.4% from 3.8%. Unit labor costs record the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs and increases in output per hour then to reduce them.
Economists expected productivity to be revised lower to an 8.0% annual rate increase and for unit labor costs to be revised to a 5.5% annual rate decline in the third quarter, according to the median estimate provided by Thomson Reuters.
Output was revised to a 2.9% increase, from a 3.0% increase. Hours worked were revised to a 4.8% decline, from 5.0% decline initially reported for the quarter that ended Sept. 30. Labor productivity is measured as a worker's output per hour.
Manufacturing productivity was revised lower to a 13.4% increase from the 13.9% gain initially reported. It was the largest quarterly manufacturing increase since records for this series began in the second quarter of 1987.
Some economists saw the third quarter jump in productivity as a sign that unemployment could peak soon. The last surge in productivity, in the third quarter of 2003, marked a turning point for unemployment following the last recession, economists said after the initial third quarter figures were reported.
Unemployment figures for November, which will be released tomorrow, are expected to show the unemployment rate held at 10.2% and that employers shed 130,000 workers for the month, according to the median estimate from Thomson Reuters.
