Output And Productivity In Line With Trend

A small downward revision to output and a small upward revision to hours worked pulled down the second estimate of first-quarter nonfarm productivity to an even more paltry 0.4 percent quarterly gain from 0.7 percent in the first estimate. This in turn lifts unit labor costs to 2.9 percent from the first estimate's 2.7 percent.

Looking at year-on-year change, productivity rose 1.3 percent in the first quarter, which is right in line with trend, while labor costs also rose 1.3 percent which is an improvement from the fourth quarter's 1.8 percent rise.

When adjusted for inflation, real compensation remains in the negative column at a quarterly annualized rate of minus 0.2 percent. Readings in this report are all vital signs for the economy and the results point to subdued labor activity consistent with a mature expansion and high levels of employment.