S&P 500
7,401.00
+0.91%
Dow Jones
49,665.70
+0.19%
Nasdaq 100
29,241.00
+2.43%
Russell 2000
2,860.88
+0.82%
FTSE 100
10,263.70
+0.48%
Nikkei 225
63,767.70
+2.68%

Jobs

Productivity and Labor Costs Compete with Unemployment

Photo of Jon C. Ogg
By Jon C. Ogg Updated Published
Follow 24/7 Wall St. on Google
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Invalid Image
The report on second-quarter productivity and unit labor costs is out from the Labor Department after last week’s surprise nonfarm payrolls gains. Productivity (hourly output) rose by 1.6% versus -0.5% in the first quarter, and that was higher than the 1.3% gain that Dow Jones was calling for. Unit Labor costs (wage inflation) rose by 1.7% after the first quarter’s revision to +5.6%. Dow Jones was calling for a gain of only 0.6% on the cost basis for the second quarter.

Expectations from Bloomberg were +1.3% on the productivity measure and +0.9% on the unit labor cost measurement. Hourly compensation grew at a faster rate than productivity. Has America milked the last ounce of productivity per cost? While the United States added 163,000 in last week’s jobs report in the second quarter, the unemployment rate did officially tick up by 0.1% to 8.3% in the quarter.

In today’s report, nonfarm business output rose by 2.0% in the second quarter, lower than the 2.7% gain in the first quarter. The hours worked rose by 0.4% in the second quarter, versus 3.2% higher in the first quarter. These modest gains are also largely reflected in that low GDP growth of 1.5% we saw on a preliminary GDP basis as well.

JON C. OGG

Photo of Jon C. Ogg
About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

Continue Reading

Labor Costs and Productivity Look Like a Win-Win for the Economy
Jon C. Ogg |

Labor Costs and Productivity Look Like a Win-Win for the Economy

After a long period of stagnation, the measure for worker productivity is back on the up. And at the same…

Worker Productivity Finally Back in the Right Direction
Jon C. Ogg |

Worker Productivity Finally Back in the Right Direction

After having been in the dumps for far too long, we are seeing a long overdue surge in worker productivity.…

Productivity Outpaces Labor Costs in Q3 2016
Jon C. Ogg |

Productivity Outpaces Labor Costs in Q3 2016

Is it possible that the endless decline and stagnation in worker productivity is ending? The third quarter increase in nonfarm…

Should Negative Labor Productivity Become a Political Hot Button?
Jon C. Ogg |

Should Negative Labor Productivity Become a Political Hot Button?

Even though 2016 is an election year, no politician really will try to tackle the issue of a decline in…

Large Drop in Productivity Could Weigh on Corporate America’s Growth Ambitions
Jon C. Ogg |

Large Drop in Productivity Could Weigh on Corporate America’s Growth Ambitions

The Bureau of Labor Statistics has released its reading on labor productivity and unit labor costs for the fourth quarter.

Jon C. Ogg |

Nonfarm Productivity Ticks Back Up With Rise in Labor Costs

Nonfarm productivity managed to post a small gain in the second quarter of 2015. While that gain was smaller than…

The Pandemic Is Making the Jobs Numbers Look Paranormal
Jon C. Ogg |

The Pandemic Is Making the Jobs Numbers Look Paranormal

Thursday's financial news included two key reports on the employment picture ahead of Friday's key unemployment report.

Worker Productivity Hits 3-Year High
Jon C. Ogg |

Worker Productivity Hits 3-Year High

The U.S. Department of Labor has released data indicating that nonfarm labor productivity rose by 2.9% in the second quarter…

Is Rising Workforce Productivity Actually Bad Right Now?
Jon C. Ogg |

Is Rising Workforce Productivity Actually Bad Right Now?

A Bureau of Labor Statistics report on Thursday showed that nonfarm business sector labor productivity increased at a 1.6% annualized…

Top Gaining Stocks

Akamai
AKAM • Vol: 21,556,944
Micron Technology
MU • Vol: 65,135,624
Intel
INTC • Vol: 227,504,426
Monster Beverage
MNST • Vol: 15,284,847
Dell Technologies
DELL • Vol: 12,167,525

Top Losing Stocks

Mettler Toledo International
MTD • Vol: 539,266
Motorola Solutions
MSI • Vol: 3,101,643
Expedia
EXPE • Vol: 4,189,786
Coterra Energy
CTRA • Vol: 73,319,495
Fidelity National Information Services
FIS • Vol: 11,468,820