Latest economic data shows that unit labour costs in the non-farm business sector in the United States have increased by 4.2 per cent per cent in the first quarter of 2023.
This reflects a 2.1 per cent increase in hourly compensation and a 2.1 per cent decrease in productivity. The US Bureau of Labor Statistics (BLS) is reporting that unit labor costs increased 3.8 per cent over the last four quarters.
In a statement, the BLS indicated that unit labour costs in the manufacturing sector increased 3.1 per cent in the first quarter, reflecting a 0.5 per cent increase in hourly compensation and a 2.5 per cent decrease in productivity. For the same quarter a year ago, manufacturing unit labour cost went up 4.5 per cent.
Non-farm labour productivity declined
Non-farm business sector labour productivity decreased 2.1 per cent in the first quarter of 2023. Labour productivity was revised up 0.6 per cent, the combined effect of a 0.3-percentage point upward revision to output and a 0.4-percentage point downward revision to hours worked.
“From the same quarter a year ago, non-farm business sector labour productivity decreased 0.8 per cent, reflecting a 1.4-per cent increase in output and a 2.2-per cent increase in hours worked. The 0.8-per cent productivity decline is the first time the four-quarter change series has remained negative for five consecutive quarters; this series begins in the first quarter of 1948,” the BLS said.