U.S. Labor Productivity Falls

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Meanwhile, here are the major economic headlines from the last week:

• Nonfarm business sector labor productivity in the United States increased 1.7 percent in the fourth quarter of 2022. Output rose 3.1 percent and hours worked expanded by 1.4 percent. Productivity was down 1.8 percent from the same quarter in 2021, however, and annual average productivity fell 1.7 percent from 2021 to 2022. That drop is the largest annual decline in the measure since 1974. Read the full report here.
• The Institute for Supply Management’s purchasing managers’ index (PMI) for the United States rose to 47.7 percent in February from 47.4 percent in January. While the volume of new orders improved, readings for production and employment both fell. Read the full report here.
• U.S. construction spending fell 0.1 percent between December 2022 and January 2023 to a seasonally adjusted annual rate of $1.825 trillion. The January figure is 5.7 percent above the January 2022 estimate, however. Read the full report here.
• According to the U.S. Department of Labor, 190,000 individuals filed for federal unemployment benefits during the week that ended February 25, down from 192,000 the week before. The four-week moving average of first time claims rose, however. The number of individuals who continued to receive benefits declined to 1.655 million for the week that ended February 18, down from 1.66 million the week before, but the four-week moving average of continuing claims increased.
• The Conference Board’s Consumer Confidence Index® fell to 102.9 in February from 106.0 in January. Consumers’ assessment of current business and labor market conditions improved, but their outlook for future income, business, and labor market conditions fell. Indeed, the Conference Board’s Expectations Index is now well below 80, which is the level that often signals a recession within the next year. It has been below this level for 11 of the last 12 months.