The preliminary data from the U.S. Labour Department showed on Thursday that nonfarm business sector labor productivity in the United States rose 5.4 percent q-o-q in the first quarter of 2021, as output surged 8.4 percent q-o-q and hours worked increased 2.9 percent q-o-q (seasonally adjusted). This was better than economists’ forecast for a 4.3 percent q-o-q advance after a revised 3.8 percent q-o-q drop in the fourth quarter of 2020 (originally a 4.2 percent q-o-q decline).

In y-o-y terms, the labor productivity jumped 4.1 percent in the first quarter, reflecting a 1.1-percent gain in output and a 2.9-percent fall in hours worked.

Meanwhile, unit labor costs in the nonfarm business sector in the first quarter edged down 0.3 percent q-o-q compared to a revised 5.6 percent q-o-q climb in the prior quarter (originally a 6.0 percent q-o-q surge). Economists had forecast a 0.8 percent drop in first-quarter unit labor costs.

Unit labor costs quarterly decline reflected a 5.1-percent q-o-q jump in hourly compensation and a 5.4-percent rise in productivity.

Compared to the corresponding period of 2020, unit labor costs rose 1.6 percent, as hourly compensation increased 5.8 percent and productivity grew 4.1 percent.