Manufacturing labor productivity dipped slightly in Q4, according to the Bureau of Labor Statistics. NAM Chief Economist Chad Moutray broke it down for us.
Topline numbers: “Manufacturing labor productivity edged down 0.1% in the fourth quarter at the annual rate, extending the 2.4% decline in the third quarter,” said Moutray. “With that said, output rose 5.8% in the fourth quarter, continuing to reflect solid growth in demand for goods despite ongoing challenges with supply chain and workforce issues. Additionally, the number of hours worked also rose 5.8%, and unit labor costs for manufacturers increased 1.4% in the fourth quarter. For 2021, manufacturing labor productivity increased 3.2%, the strongest annual increase since 2010, another year with strong rebounds in activity.
- Durable and nondurable goods: “Labor productivity for durable goods increased 2.8% in the fourth quarter, with output soaring 6.9%,” said Moutray. “At the same time, labor productivity for nondurable goods decreased 4.0% in the fourth quarter, with output rising 4.5% but with real hourly compensation increasing 5.1%. In the fourth quarter, unit labor costs for durable and nondurable goods rose 3.3% and 9.4%, respectively.”
- Nonfarm business labor: “Meanwhile, nonfarm business labor productivity soared 6.6% in the fourth quarter, bouncing back from the 3.9% decline in the third quarter,” said Moutray. “Output grew 9.1% for the quarter, and the number of hours worked rose 2.4%. Real hourly compensation jumped 7.5%, and unit labor costs ticked up 0.9%.”