The Bureau of Labor Statistics lowered its estimates of productivity growth down from 2.0 percent as originally stated to 1.3 percent. Output growth was also reduced for the quarter, down from 6.6 percent to 5.0 percent. Still, that figure suggests relatively strong growth overall, consistent with the bounce we saw in the second half of 2013. Unit labor costs edged slightly lower, off 0.1 percent in the fourth quarter.
Nondurable goods manufacturing was weaker than originally reported, with output up 2.4 percent instead of 4.1 percent. Labor productivity for nondurable goods decreased by 0.1 percent, with unit labor costs up 0.3 percent. On a year-over-year basis, productivity rose 1.0 percent, output increased 1.2 percent, and unit labor costs fell 0.2 percent.
In the durable goods sector, the news was quite positive, even with the latest revisions. Labor productivity increased a modest 3.0 percent on a huge jump in output of 7.5 percent. Unit labor costs declined 1.3 percent, helping to keep the sector more competitive globally. Speaking to the strengths of durables over the past year, output rose 4.6 percent over the past 12 months.
In the larger economy, labor productivity in the nonfarm business sector was also revised lower, down from the original estimate of 3.2 percent to 1.8 percent. Output increased 3.4 percent, and unit labor costs were marginally down by 0.1 percent.
Chad Moutray is the chief economist, National Association of Manufacturers.