HUGE JUMP: labour Costs Outpace Expectations And Productivity Increases

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Photo: Manufacturers Assoc – nam.org via flickr

Non-farm productivity increased at a faster clip than earlier estimates, new data out of the Bureau of labour Statistics shows.Productivity increased 0.9 per cent in the final quarter of 2011, while unit labour costs jumped 2.8 per cent.

The latter point is a sharp gain from the 1.2 per cent preliminary reading and well above analyst expectations.

Hourly compensation increased by 3.7 per cent during the quarter, which stood 3.5 per cent above year-ago levels.

Businesses drove the increase in productivity, with a 1.0 per cent gain, while manufacturing declined slightly.

“Manufacturing sector productivity edged down 0.1 per cent in the fourth quarter of 2011, as output rose 4.8 per cent and hours worked increased 4.9 per cent; this is the largest quarterly gain in hours worked since the second quarter of 1996 (6.2 per cent),” the Bureau said. “Annual average productivity grew 2.6 per cent from 2010 to 2011.”

Hours worked also surged in durable manufacturing, up 7.6 per cent during the final three months of 2011. 

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