The Week Ahead

PRODUCTIVITY AND COSTS Monday, Feb. 4, 10 a.m.

Output per hour worked in the nonfarm business sector probably increased at an annual rate of about 1% in the fourth quarter. Although output dropped last quarter, the total number of hours worked dropped by a larger amount. However, all of the efficiency gain was likely in manufacturing, where productivity probably increased by about 1.5%. That's because cuts in factory jobs and hours worked were much greater than the drop in output. Nonmanufacturing output per hour worked was probably unchanged last quarter. In the third quarter, nonfarm productivity rose at a 0.4% annual clip, but manufacturing productivity jumped by 5.2%. Unit-labor costs in the nonfarm business sector likely increased at a 3.5% annual rate last quarter, much slower than the 4.3% pace of the third. Manufacturing unit-labor costs were probably up about 2%, after falling at a 1.2% annual rate in the third quarter.

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