US Productivity falls in Q4 2014

Labor , USA Feb 09, 2015 No Comments

US Productivity falls in Q4 2014US Productivity fell at a 1.8% rate in the fourth quarter because output rose at a 3.2% pace but hours worked increased at a 5.1% rate, the largest jump in hours since the fourth quarter of 1998, after a revised 3.7% gain in the prior three months that was larger than previously estimated. Economists surveyed by The Wall Street Journal had expected productivity would be flat in October through December.

Easy productivity gains are more or less gone at this point,” said Sam Coffin, an economist at UBS Securities LLC in Stamford, Connecticut, whose projection for a 1.7% drop was the closest in the Bloomberg survey. “We’ll probably need to see capital expenditures at some point if we’re going to see much faster output growth.”

Labor costs increased at a 2.7% rate in the fourth quarter after having fallen at a 2.3% rate in the third quarter. Economists say quarterly changes in productivity and labor costs can swing sharply. They believe labor costs are still rising at slow levels that do not present a threat of higher inflation. Labor costs had been expected to climb by 1.2% compared to the 1% drop that had been reported for the previous quarter.

For all of 2014, unit labor costs rose 1.5 percent compared to a gain of 0.2 percent in 2013. Hourly compensation rose at a 0.9 percent rate in the fourth quarter. It had risen at a 1.3 percent pace in the July-September quarter.

Pascal Blanc

Pascal has implemented numerous software solutions in the areas of procurement, sourcing, spend management, supplier evaluation and performance. His clients include Fortune 500 companies in Europe, Asia and North America. He is a co-founder of Source & Procure.

Leave a Reply

Your email address will not be published. Required fields are marked *