U.S. Factory Worker Productivity Rises; Overall Figure Not Produced Due to Shutdown
Productivity of U.S. manufacturing workers rose in the final three months of 2018, but a broader measure of nonfarm business productivity was not reported Wednesday due to the lingering effects of the partial government shutdown.
The productivity of manufacturing workers, measured as the output of goods for each hour on the job, increased at a 1.3% seasonally adjusted annual rate in the fourth quarter, the Labor Department said. That compared to a 1.1% productivity gain for factory workers in the third quarter.
A more closely watched measure, productivity for workers at all nonfarm businesses, was not reported in Wednesday’s release. That’s because the Labor Department needs output figures from the quarterly gross-domestic-product report to calculate productivity. The fourth-quarter GDP report was initially scheduled to be released on Jan. 30, but its publication has been delayed as a result of the 35-day government shutdown, which ended Jan. 25. Number crunchers at Commerce Department’s Bureau of Economic Analysis, which produces the GDP figures, were not on the job for weeks when that report is typically compiled.
No date has been set for the fourth-quarter GDP release.
A gauge of compensation costs known as unit labor costs was not produced for the same reason.
Economists surveyed by the Wall Street Journal projected overall productivity grew at a 1.6% rate in the fourth quarter and unit labor costs advanced 1.7%.
The Labor Department uses Federal Reserve data to determine manufacturing output. Neither the Labor Department nor Fed were affected by the shutdown.
Overall worker productivity has mostly grown at a sluggish rate in recent years. Through the third quarter, year-over-year productivity gains have held below 2% since late 2010, the longest such streak on records back to 1948.
But productivity for nonfarm business workers increased at a better rate in the middle of last year, advancing at an 3% annual rate in the second quarter and a 2.2% pace in the third quarter, according to revised figures.
From a year earlier, productivity rose 1.3% in the third quarter.
The improved output per hour for a portion of last year could be a sign that recent changes to the tax law intended to increase investment are pushing firms to spend on technology needed to support better worker productivity.
However, there have been other short-term bursts in productivity growth, only for gains to cool again after a few quarters. And historically low unemployment means companies are hiring less-skilled workers to fill jobs, a potential drag on productivity.
Source: Dow Jones