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
ISM: US Manufacturing Improved in September, But Still Contracting
US manufacturing activity improved in September, nearing a recovery, but remained in contraction territory, according to the Institute for Supply Management (ISM).
Ford of Canada Union Workers Ratify Three-Year Labor Pact
Ford of Canada union workers represented by Unifor ratified a new, three-year labor agreement on Sunday.
ABI Index Drops in August
August’s Architecture Billings Index (ABI) reading from the American Institute of Architects (AIA) and Deltek showed a moderate decrease.
Beige Book: Economic Activity Appears Stable
The US Federal Reserve said that although overall economic activity was modest in July and August, per its latest Beige Book Report released on Sept. 6, the report was still slightly more optimistic than the previous one.
Dodge Momentum Declines in August on Tighter Lending
The Dodge Momentum Index (DMI) moved lower in August, driven by a slowdown in planning from tighter lending standards, according to the latest data from the Dodge Construction Network (DCN).