Economy

BLS Reports Strong Productivity Growth in the Second Quarter
Written by Tim Triplett
August 17, 2018
Productivity growth was strong in the second quarter and unit labor costs increased 1.9 percent year over year, according to Steel Market Update’s latest analysis of Bureau of Labor Statistics (BLS) data.
Unit labor costs and productivity changes are reported quarterly by the BLS and results for Q2 2018 were released this week. This basic information is required to truly understand the steel market. One way of looking at GDP is that it is the growth of the working age population multiplied by their productivity. Steel consumption is correlated with the growth of GDP.
In Q2 2018, productivity increased by 0.7 percent quarter over quarter. Figure 1 shows labor productivity in output per hour as an index based on 2012 = 100 and the quarterly change. In the last 10 quarters, with three exceptions, there has been a healthy upward trend in the productivity of nonfarm businesses as a whole.
The bad news is that this is not true of manufacturing. Figure 2 shows the same analysis for manufacturing industries. The productivity growth of manufacturing has been stalled for 8 ½ years following the post-recessionary recovery.
In the second quarter, unit labor costs declined by 0.9 percent based on the previous quarter at an annual rate. Figure 3 shows the change in unit labor costs since Q1 2000 and that the cost increase has been around 2 percent for the last six quarters.

Tim Triplett
Read more from Tim TriplettLatest in Economy

Steel groups welcome passage of budget bill
Steel trade groups praised the passage of the Big Beautiful Bill (BBB) in Congress on Thursday.

Industry groups praise Senate for passing tax and budget bill
The Steel Manufacturers Association and the American Iron and Steel Institute applauded the tax provisions included in the Senate's tax and budget reconciliation bill.

Chicago PMI dips 0.1 points in June
The Chicago Purchasing Managers Index (PMI) slipped 0.1 points to 40.4 points, in June.

Multi-family pullback drives housing starts to 5-year low in May
US housing starts tumbled in May to a five-year low, according to figures recently released by the US Census Bureau.

Architecture firms still struggling, ABI data shows
Architecture firms reported a modest improvement in billings through May, yet business conditions remained soft, according to the latest Architecture Billings Index (ABI) release from the American Institute of Architects (AIA) and Deltek.