Q4 unit labor costs exceed consensus as productivity roughly in line

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• Q4 Productivity and Costs: +6.6% vs. +6.7% expected and +6.6% prior.
• Output increased 9.1% and hours worked rose 2.4% during the quarter.
• The Q4 output index is 4.6% higher than it was in Q4 2019, the last quarter unaffected by the pandemic. That reflects an annual growth rate of 2.3% during the pandemic so far, and exceeds the 1.4% average annual growth rate during the previous business cycle — from 2007 to 2019.
• Unit labor costs: +0.9% vs. +0.3% expected and +0.3% prior.
• The increase in unit labor costs reflected a 7.5% jump in hourly compensation and the 6.6% productivity improvement.
• Unit labor costs rose 3.5% over the last four quarters, the U.S. Bureau of Labor Statistics said.
• Previously (March 1), Construction spending jumps more than expected in January