PRODUCTIVITY AND COSTS
Third Quarter 2013, Revised
Nonfarm business sector labor productivity increased at a 3.0 percent annual
rate during the third quarter of 2013, the U.S. Bureau of Labor Statistics
reported today. The increase in productivity reflects increases of 4.7
percent in output and 1.7 percent in hours worked. (All quarterly percent
changes in this release are seasonally adjusted annual rates.) From the third
quarter of 2012 to the third quarter of 2013, productivity increased 0.3
percent as output and hours worked rose 2.1 percent and 1.8 percent,
respectively. (See table A.)
Labor productivity, or output per hour, is calculated by dividing an index of
real output by an index of hours worked of all persons, including employees,
proprietors, and unpaid family workers. Measures released today were based
on more recent source data than were available for the preliminary report.
Unit labor costs in nonfarm businesses decreased 1.4 percent in the third
quarter of 2013, while hourly compensation increased 1.6 percent. Unit labor
costs rose 2.1 percent over the last four quarters.
BLS defines unit labor costs as the ratio of hourly compensation to labor
productivity; increases in hourly compensation tend to increase unit labor
costs and increases in output per hour tend to reduce them.
Manufacturing sector productivity declined 0.1 percent in the third quarter
of 2013, as output and hours worked increased 1.1 percent and 1.2 percent,
respectively. Productivity increased 1.1 percent in the durable goods sector
and decreased 1.0 percent in the nondurable goods sector. Over the last four
quarters, manufacturing productivity increased 2.2 percent, as output
increased 2.3 percent and hours edged up 0.1 percent. Unit labor costs in
manufacturing grew 1.3 percent in the third quarter of 2013 and declined 0.2
percent from the same quarter a year ago. (See tables A and 3.) Nonfinancial
corporate sector productivity decreased 0.7 percent in the third quarter of
2013.
The concepts, sources, and methods used for the manufacturing and
nonfinancial corporate output series differ from those used in the business
and nonfarm business output series; these output measures are not directly
comparable. See Technical Notes for a more detailed explanation.
Revised measures
The measures released today are based on more recent source data than were
available for the preliminary report. Tables B and C present previous and
revised productivity and related measures for the major sectors: nonfarm
business, business, and manufacturing, as well as nonfinancial corporations.
In the third quarter of 2013, nonfarm business productivity increased 3.0
percent, rather than 1.9 percent as reported November 14; this is the
largest increase in the quarterly series since a 4.7 percent gain in the
fourth quarter of 2009. The upward revision to productivity reflected a 1.0
percentage point upward revision to output. Unit labor costs were revised
down, and decreased 1.4 percent, as the upward revision to productivity was
greater than an upward revision to hourly compensation. In the manufacturing
sector, productivity declined 0.1 percent rather than increasing 0.4 percent
as previously reported, reflecting a downward revision to output and an
upward revision to hours worked. Unit labor costs increased 1.3 percent, the
same as the preliminary estimate.
In the second quarter of 2013, nonfarm business productivity, output, and
hours were unrevised. Unit labor costs increased 2.0 percent, rather than
the previous estimate of 0.5 percent, the result of an upward revision to
hourly compensation. In the manufacturing sector, output and productivity
growth were both revised up by 0.1 percentage point. Unit labor costs
increased 0.5 percent, a smaller increase than previously reported, due
primarily to a downward revision to hourly compensation.
Second-quarter 2013 measures of productivity and costs were revised for the
nonfinancial corporate sector. Productivity increased 3.3 percent rather
than 2.4 percent as reported November 14.
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Source: Bureau of Labor Statistics
