The revised data from the U.S. Labour Department showed on Thursday that nonfarm business sector labor productivity in the United States decreased 0.9 percent q-o-q in the first quarter of 2020, as output fell 6.5 percent q-o-q and hours worked dropped 5.6 percent q-o-q (seasonally adjusted). That was better than initial estimate of a drop of 2.5 percent q-o-q and economists’ forecast for a decline of 2.7 percent q-o-q. In the fourth quarter of 2019, labor productivity rose 1.2 percent q-o-q.

In y-o-y terms, the labor productivity rose 0.7 percent, reflecting no change in output and a 0.7-percent decline in hours worked.

Meanwhile, unit labor costs in the nonfarm business sector in the first quarter climbed 5.1 percent q-o-q compared to an initial estimate of a 4.8 percent q-o-q advance and a revised 2.2 percent q-o-q gain in the prior quarter (originally a 0.9 percent q-o-q advance). That was the biggest increase in labor costs since the first quarter of 2019.

Economists had forecast a 5.0 percent q-o-q surge in first-quarter unit labor costs.

Unit labor costs quarterly increase reflected a 4.2-percent q-o-q growth in compensation per hour and a 0.9-percent q-o-q decline in productivity.

Compared to the corresponding period of 2018, unit labor costs rose 1.9 percent.