Productivity and Costs by Industry: Wholesale and Retail Trade, Food Services and Drinking Places News Release

Internet: http://www.bls.gov/lpc/                                    USDL 09-1022                                  
Technical information: (202) 691-5618                                For release: 10:00 a.m. EDT
Media contact: (202) 691-5902                                        Friday, August 28, 2009




                     PRODUCTIVITY AND COSTS BY INDUSTRY: WHOLESALE TRADE, RETAIL 
                    TRADE, AND FOOD SERVICES AND DRINKING PLACES INDUSTRIES, 2008

	Labor productivity - defined as output per hour - fell in wholesale trade, retail trade, and 
food services and drinking places in 2008 as follows:

                            -0.3 percent in wholesale trade
                            -1.8 percent in retail trade and  
                            -0.7 percent in food services and drinking places.			
		
      Both output and hours declined in each of these sectors in 2008.  Productivity fell in 26 
of the 50 detailed industries studied.  (See table 1.)  Unit labor costs rose in 29 of the detailed 
industries and in all three sectors.

      Over the longer term, output per hour increased at the following average annual rates 
between 1987 and 2008:
                             3.0 percent in wholesale trade
                             3.0 percent in retail trade and  
                             0.6 percent in food services and drinking places.	

	Output and hours grew in all three sectors over the period.  Productivity increased in 46 
of the 50 detailed industries.  (See table 2.)  Unit labor costs rose in 32 of the 50 industries and in 
each of the three sectors between 1987 and 2008.

2007-2008 change

	Wholesale trade:  Labor productivity fell 0.3 percent as output declined 0.8 percent and 
hours declined 0.5 percent.  Output per hour fell in 10 of the 19 detailed wholesale trade 
industries in 2008.  Commercial equipment wholesalers (NAICS 4234) experienced the largest 
labor productivity gain, 9.2 percent, while furniture and home furnishing wholesalers (NAICS 
4232) recorded the largest decline, 15.9 percent.  The largest employer in the wholesale trade 
sector, electronic markets and agents and brokers (NAICS 4251), experienced a productivity 
decline of 2.6 percent. Unit labor costs rose in 13 of the 19 detailed industries, and grew 1.9 
percent in the wholesale trade sector overall.

	Retail trade: Labor productivity fell 1.8 percent as output declined 3.6 percent and hours 
decreased 1.8 percent.  Output per hour fell in 15 of the 27 retail trade industries in 2008.  Lawn 
and garden equipment and supplies stores (NAICS 4442) had the largest labor productivity gain, 
20.8 percent, while automotive dealers (NAICS 4411) posted the largest decline, 9.3 percent.  
Grocery stores (NAICS 4451), the largest employer among the retail trade industries, saw a 1.4 
percent decline in productivity in 2008.  Unit labor costs rose in 13 of the 27 detailed industries, 
and rose 2.4 percent in the retail trade sector overall.

	Food services and drinking places:  Labor productivity fell 0.7 percent as output and 
hours fell 1.0 percent and 0.2 percent, respectively.  Output per hour grew in three of the four 
detailed industries in 2008 including the largest employer, full-service restaurants (NAICS 7221).  
Drinking places (NAICS 7224) experienced the largest labor productivity increase, 4.1 percent, 
while limited-service eating places (NAICS 7222) recorded the only decline, -3.1 percent.  Unit 
labor costs rose in three of the four detailed industries and rose 3.7 percent in the food services 
and drinking places overall. 

Long-term trends

	Wholesale trade:  Labor productivity rose 3.0 percent per year, on average, between 1987 
and 2008.  Output grew 3.7 percent per year and hours increased 0.7 percent per year.  Labor 
productivity rose in 16 of the 19 detailed industries.  Commercial equipment wholesalers 
(NAICS 4234) and electric goods wholesalers (NAICS 4236) posted the highest average growth 
in output per hour, 14.9 percent and 8.5 percent, respectively.  Unit labor costs rose in 17 of the 
19 detailed industries between 1987 and 2008, and grew at an average annual rate of 1.1 percent 
per year overall in the wholesale trade sector.

	Retail trade: Labor productivity grew 3.0 percent per year, on average, between 1987 and 
2008, while output and hours increased 3.7 percent and 0.6 percent per year, respectively.  Labor 
productivity grew in all but one of the detailed industries in this period.  Electronics and 
appliance stores (NAICS 4431) and electronic shopping and mail-order houses (NAICS 4541) 
experienced the fastest labor productivity growth, 13.5 percent and 11.2 percent per year, 
respectively.  Unit labor costs fell in 14 of the 27 detailed industries in retail trade, but rose 0.1 
percent per year, on average, in the retail trade sector overall.

	Food services and drinking places:  Labor productivity increased at an average annual rate 
of 0.6 percent per year between 1987 and 2008, as output and hours increased 2.2 percent and 
1.6 percent, respectively.  Labor productivity rose in the four detailed food services and drinking 
places industries during the period.  Unit labor costs rose in all four industries and rose 3.2 
percent per year, on average, in food services and drinking places overall.


                                         Technical Note

Labor Productivity

	The industry labor productivity measures describe the relationship between 
industry output and the labor time involved in its production.  They show the changes from period to 
period in the amount of goods and services produced per hour.  Although the labor productivity 
measures relate output to hours of employees or all persons in an industry, they do not measure the 
specific contribution of labor or any other factor of production.  Rather, they reflect the joint effects of 
many influences, including changes in technology; capital investment; utilization of capacity, energy, 
and materials; the use of purchased services inputs, including contract employment services; the 
organization of production; managerial skill; and the characteristics and effort of the workforce.

       Long-term productivity trends tend to be more reliable indicators of the performance of an 
industry than are year-to-year changes.  The annual changes in an industry’s output and use of labor 
may reflect cyclical changes in the economy as well as long-term trends.  

Output

	Industry output is measured as an annual-weighted index of the changes in the various 
products or services (in real terms) provided for sale outside the industry. Real industry output is usually 
derived by deflating nominal sales or values of production using BLS price indexes, but for some 
industries it is measured by physical quantities of output.

       Industry output measures are constructed primarily using data from the economic censuses and 
annual surveys of the U.S. Census Bureau, U.S. Department of Commerce, together with information on 
price changes primarily from BLS. The measures in this news release incorporate current data from the 
Census Bureau’s Monthly Wholesale Trade Survey (May 2009), Annual Wholesale Trade Report 
(February 2009), Annual Revision of the Monthly Retail and Food Services: Sales and Inventories (April 
2009), and the Annual Retail Trade Survey (July 2009).

Labor Hours

	The primary source of industry employment and hours data is the BLS Current 
Employment Statistics (CES) survey. The CES provides monthly data on the number of total and 
nonsupervisory worker jobs held by wage and salary workers in nonfarm establishments, as well as data 
on the average weekly hours of nonsupervisory workers in those establishments. Data from the Current 
Population Survey (CPS) are also used to supplement the CES data. The industry productivity program 
estimates the average weekly hours of supervisory workers for each industry using data from the CPS 
together with the CES data. Data from the CPS are also used to estimate the employment and hours of 
self-employed and unpaid family workers in each industry.  Hours of all persons in an industry are 
treated as homogeneous and are directly aggregated.

Unit Labor Costs

	Unit labor costs represent the cost of labor required to produce one unit of output.  
The unit labor cost indexes are computed by dividing an index of industry labor compensation by an 
index of real industry output.  Unit labor costs also describe the relationship between compensation per 
hour and real output per hour (labor productivity). Increases in hourly compensation increase unit labor 
costs; increases in labor productivity offset compensation increases and lower unit labor costs.

       Compensation, defined as payroll plus supplemental payments, is a measure of the cost to the 
employer of securing the services of labor.  Payroll includes salaries, wages, commissions, dismissal 
pay, bonuses, vacation and sick leave pay, and compensation in kind.  Supplemental payments include 
legally required expenditures and payments for voluntary programs.  The legally required portion 
consists primarily of Federal old age and survivors’ insurance, unemployment compensation, and 
workers’ compensation.  Payments for voluntary programs include all programs not specifically required 
by legislation, such as the employer portion of private health insurance and pension plans.

Revisions

	Output measures for wholesale trade industries have been revised to include the revenues 
of nonemployer firms as well as those of employer firms.  Although small, the revision reflects a more 
complete accounting of the total sales of each industry, and makes the output measures for wholesale 
trade industries consistent with the output series for industries in retail trade and food services and 
drinking places, which include nonemployer revenues.

Additional Information

	The measures in this news release replace the wholesale trade, retail trade, 
and food services and drinking places series published on the BLS website, in the news release 
Productivity and Costs by Industry: Wholesale Trade, Retail Trade, and Food and Drinking Places, 
2007 (released August 21, 2008)  and in table 50 of the Monthly Labor Review. The industries included 
in this release are classified according to the 2007 NAICS. All of the measures for 2008 in this release 
are preliminary and subject to revision.

       Industry productivity and related indexes and rates of change can be accessed online by visiting 
the Labor Productivity and Costs web site at http://www.bls.gov/lpc/.  Data on industry employment, 
hours, labor compensation, value of production, and the implicit price deflator for output for these 
industries are available upon request by calling the Division of Industry Productivity Studies (202-691-
5618) or by sending a request by e-mail to dipsweb@bls.gov. While the rates of change reported by BLS 
in this news release are rounded to one decimal place, all industry productivity percent changes are 
calculated using index numbers to three decimal places.

       Information in this report will be made available to sensory-impaired individuals upon request. 
Voice phone: 202-691-5618; TDD message referral phone number: 1-800-877-8339.


Table 1.   Percent change in output per hour, output, hours, compensation, and unit labor costs, 2007-2008

                                                                                      Percent change, 2007-2008
                                                                2008     ---------------------------------------------------
 NAICS                        Industry                       Employment   Output                        Labor     Unit labor
 code                                                       (thousands)  per hour   Output    Hours  compensation   costs

                          Wholesale Trade

42       Wholesale trade                                         6166      -0.3      -0.8      -0.5       1.2        1.9

423          Durable goods                                       3171       0.4      -1.1      -1.5       0.3        1.4
4231             Motor vehicles and parts                         351      -7.7     -10.9      -3.5      -4.2        7.6
4232             Furniture and furnishings                        122     -15.9     -10.3       6.8       3.7       15.5
4233             Lumber and construction supplies                 240      -1.1     -10.3      -9.3      -7.8        2.8
4234             Commercial equipment                             665       9.2       8.8      -0.3      -0.5       -8.6
4235             Metals and minerals                              136      -8.5      -7.4       1.2       6.0       14.5
4236             Electric goods                                   362       2.7       3.4       0.7       0.1       -3.3
4237             Hardware and plumbing                            258      -7.3      -9.6      -2.5       0.2       10.8
4238             Machinery and supplies                           697       6.5       4.7      -1.7       2.6       -1.9
4239             Miscellaneous durable goods                      340       2.9       2.6      -0.2       5.4        2.7

424          Nondurable goods                                    2141      -0.4      -0.5      -0.1       1.1        1.5
4241             Paper and paper products                         143      -8.5      -3.1       6.0      -1.1        2.0
4242             Druggists' goods                                 215       7.0       3.2      -3.6      -2.0       -5.0
4243             Apparel and piece goods                          157       4.6       2.2      -2.3      -4.3       -6.3
4244             Grocery and related products                     766      -3.5      -1.9       1.6       1.6        3.6
4245             Farm product raw materials                        79       1.7       3.3       1.5      17.8       14.0
4246             Chemicals                                        134       0.8      -3.3      -4.1      -0.7        2.7
4247             Petroleum                                        104       1.7       4.4       2.6       2.7       -1.6
4248             Alcoholic beverages                              164      -4.2       0.6       5.0       8.1        7.5
4249             Miscellaneous nondurable goods                   379      -6.9     -10.4      -3.8       1.5       13.3

425          Electronic markets and agents and brokers            854      -2.6      -0.2       2.5       4.5        4.7
4251             Electronic markets and agents and brokers        854      -2.6      -0.2       2.5       4.5        4.7

                            Retail Trade

44-45    Retail trade                                           16328      -1.8      -3.6      -1.8      -1.3        2.4

441          Motor vehicle and parts dealers                     1931      -8.9     -12.5      -3.9      -6.2        7.1
4411             Automobile dealers                              1240      -9.3     -14.2      -5.4      -8.0        7.3
4412             Other motor vehicle dealers                      175       1.6      -4.2      -5.7      -8.2       -4.2
4413             Auto parts, accessories, and tire stores         516      -3.9      -3.6       0.4       1.2        4.9

442          Furniture and home furnishings stores                579       0.3      -7.4      -7.6     -10.2       -3.1
4421             Furniture stores                                 281      -1.3      -6.6      -5.4     -11.0       -4.8
4422             Home furnishings stores                          298       1.9      -8.3     -10.0      -9.4       -1.2

443          Electronics and appliance stores                     577      15.9       7.8      -7.0      -0.1       -7.3
4431             Electronics and appliance stores                 577      15.9       7.8      -7.0      -0.1       -7.3

444          Building material and garden supply stores          1305       0.8      -4.2      -4.9      -2.9        1.3
4441             Building material and supplies dealers          1147      -2.1      -7.1      -5.1      -3.3        4.0
4442             Lawn and garden equipment and supplies stor      158      20.8      16.6      -3.5       1.1      -13.3

445          Food and beverage stores                            2978      -1.8      -0.6       1.2       4.5        5.1
4451             Grocery stores                                  2558      -1.4      -0.6       0.8       4.3        5.0
4452             Specialty food stores                            257      -8.1      -7.0       1.2       3.3       11.1
4453             Beer, wine and liquor stores                     163      -4.9       2.9       8.2       9.4        6.3

446          Health and personal care stores                     1048       0.4       1.9       1.5       3.1        1.2
4461             Health and personal care stores                 1048       0.4       1.9       1.5       3.1        1.2

447          Gasoline stations                                    860      -0.6      -4.4      -3.8      -0.7        3.9
4471             Gasoline stations                                860      -0.6      -4.4      -3.8      -0.7        3.9

448          Clothing and clothing accessories stores            1577       3.2      -2.4      -5.4      -1.7        0.7
4481             Clothing stores                                 1179       6.9      -0.8      -7.2      -2.3       -1.5
4482             Shoe stores                                      197      -1.2      -0.6       0.6      -1.8       -1.2
4483             Jewelry, luggage, and leather goods stores       201      -9.1     -11.8      -2.9       0.4       13.8

451          Sporting goods, hobby, book, and music stores        727       3.2       0.7      -2.4      -2.7       -3.3
4511             Sporting goods and musical instrument store      532       3.4       2.6      -0.8      -2.1       -4.6
4512             Book, periodical, and music stores               194       2.6      -4.1      -6.5      -4.1        0.0

452          General merchandise stores                          3070      -0.8       1.8       2.6       1.1       -0.7
4521             Department stores                               1557      -6.7      -4.5       2.4      -3.9        0.6
4529             Other general merchandise stores                1513       2.4       5.3       2.8       6.1        0.8

453          Miscellaneous store retailers                       1013       2.2      -1.2      -3.3      -5.2       -4.1
4531             Florists                                         111      19.0       0.5     -15.5      -8.5       -9.0
4532             Office supplies, stationery and gift stores      389      -2.9      -6.0      -3.1      -7.1       -1.2
4533             Used merchandise stores                          172      12.7       5.9      -6.1      -1.1       -6.5
4539             Other miscellaneous store retailers              342      -1.5       0.7       2.2      -4.0       -4.7

454          Nonstore retailers                                   665       1.5      -0.4      -1.9       1.1        1.6
4541             Electronic shopping and mail-order houses        305      -3.4       3.7       7.5       7.8        3.9
4542             Vending machine operators                         58      13.1      -2.2     -13.5      -5.4       -3.2
4543             Direct selling establishments                    303      -0.5      -9.8      -9.4      -5.9        4.4

                 Food Services and Drinking Places

722          Food services and drinking places                   9877      -0.7      -1.0      -0.2       2.7        3.7
7221             Full-service restaurants                        4640       0.5      -0.5      -0.9       2.1        2.6
7222             Limited-service eating places                   4191      -3.1      -2.6       0.5       3.3        6.1
7223             Special food services                            683       1.8       1.8       0.0       3.8        1.9
7224             Drinking places, alcoholic beverages             364       4.1       4.1      -0.1       1.2       -2.7



Table 2.  Average annual percent change in output per hour, output, hours, compensation, and unit labor costs, 1987-2008

                                                                   Average annual percent change, 1987-2008
                                                             ----------------------------------------------------
 NAICS                        Industry                         Output                        Labor     Unit labor
  code                                                        per hour   Output    Hours  compensation   costs

                           Wholesale Trade

42       Wholesale trade                                         3.0       3.7       0.7       4.9       1.1

423          Durable goods                                       4.9       5.4       0.5       4.8      -0.6
4231             Motor vehicles and parts                        3.1       2.9      -0.2       3.9       0.9
4232             Furniture and furnishings                       1.2       1.7       0.6       4.9       3.1
4233             Lumber and construction supplies                0.7       1.9       1.2       3.8       1.9
4234             Commercial equipment                           14.9      15.5       0.5       5.1      -9.0
4235             Metals and minerals                            -0.9      -0.3       0.6       4.8       5.2
4236             Electric goods                                  8.5       8.5       0.0       5.1      -3.2
4237             Hardware and plumbing                           0.5       1.6       1.1       5.1       3.4
4238             Machinery and supplies                          2.5       2.6       0.2       4.6       1.9
4239             Miscellaneous durable goods                     1.4       2.7       1.3       5.7       2.9

424          Nondurable goods                                    0.9       1.3       0.4       4.9       3.5
4241             Paper and paper products                        2.1       1.5      -0.6       3.7       2.2
4242             Druggists' goods                                2.1       4.3       2.2       9.8       5.2
4243             Apparel and piece goods                         2.5       2.4      -0.1       4.0       1.5
4244             Grocery and related products                    0.7       1.7       1.0       4.8       3.0
4245             Farm product raw materials                      1.8      -0.7      -2.5       4.0       4.7
4246             Chemicals                                      -0.4       0.3       0.7       4.7       4.5
4247             Petroleum                                       2.6       0.3      -2.3       3.2       2.9
4248             Alcoholic beverages                             0.2       2.0       1.8       5.2       3.2
4249             Miscellaneous nondurable goods                 -0.2      -0.1       0.1       3.7       3.8

425          Electronic markets and agents and brokers           2.0       4.7       2.6       4.9       0.2
4251             Electronic markets and agents and brokers       2.0       4.7       2.6       4.9       0.2

                            Retail Trade

44-45    Retail trade                                            3.0       3.7       0.6       3.8       0.1

441          Motor vehicle and parts dealers                     2.0       2.8       0.8       3.8       0.9
4411             Automobile dealers                              1.8       2.7       0.8       3.7       1.1
4412             Other motor vehicle dealers                     3.3       5.3       2.0       5.7       0.3
4413             Auto parts, accessories, and tire stores        2.0       2.6       0.5       3.4       0.8

442          Furniture and home furnishings stores               3.8       4.3       0.4       3.5      -0.8
4421             Furniture stores                                3.3       3.7       0.4       3.0      -0.6
4422             Home furnishings stores                         4.6       5.1       0.5       4.0      -1.0

443          Electronics and appliance stores                   13.5      15.0       1.3       4.8      -8.9
4431             Electronics and appliance stores               13.5      15.0       1.3       4.8      -8.9

444          Building material and garden supply stores          3.0       4.4       1.3       4.1      -0.3
4441             Building material and supplies dealers          2.7       4.4       1.6       4.4       0.0
4442             Lawn and garden equipment and supplies store    5.2       4.7      -0.5       2.6      -2.0

445          Food and beverage stores                            0.4       0.3      -0.1       3.3       3.0
4451             Grocery stores                                  0.3       0.3       0.0       3.5       3.2
4452             Specialty food stores                          -0.1      -0.4      -0.3       2.1       2.6
4453             Beer, wine and liquor stores                    2.2       1.0      -1.2       2.6       1.6

446          Health and personal care stores                     2.4       3.8       1.4       5.4       1.5
4461             Health and personal care stores                 2.4       3.8       1.4       5.4       1.5

447          Gasoline stations                                   2.0       1.2      -0.7       2.5       1.3
4471             Gasoline stations                               2.0       1.2      -0.7       2.5       1.3

448          Clothing and clothing accessories stores            4.9       4.5      -0.3       3.2      -1.3
4481             Clothing stores                                 5.2       5.2      -0.1       3.5      -1.6
4482             Shoe stores                                     3.7       2.6      -1.1       1.8      -0.8
4483             Jewelry, luggage, and leather goods stores      3.9       3.5      -0.4       3.1      -0.4

451          Sporting goods, hobby, book, and music stores       4.1       4.7       0.6       3.8      -0.8
4511             Sporting goods and musical instrument stores    4.7       5.5       0.7       4.1      -1.3
4512             Book, periodical, and music stores              2.6       2.9       0.3       3.2       0.3

452          General merchandise stores                          3.4       5.3       1.8       4.0      -1.2
4521             Department stores                               0.6       2.1       1.4       2.7       0.6
4529             Other general merchandise stores                6.9       9.2       2.2       5.7      -3.2

453          Miscellaneous store retailers                       4.5       4.6       0.1       2.6      -1.9
4531             Florists                                        3.5       1.0      -2.5       0.7      -0.3
4532             Office supplies, stationery and gift stores     6.0       5.8      -0.2       2.8      -2.8
4533             Used merchandise stores                         5.8       6.6       0.7       3.5      -2.9
4539             Other miscellaneous store retailers             2.5       3.9       1.3       2.6      -1.3

454          Nonstore retailers                                  8.5       8.7       0.2       3.9      -4.5
4541             Electronic shopping and mail-order houses      11.2      15.2       3.6       7.8      -6.4
4542             Vending machine operators                       2.1      -0.7      -2.7       1.5       2.2
4543             Direct selling establishments                   3.1       1.5      -1.6       1.5       0.0

                 Food Services and Drinking Places

722          Food services and drinking places                   0.6       2.2       1.6       5.5       3.2
7221             Full-service restaurants                        0.6       2.3       1.7       6.4       4.0
7222             Limited-service eating places                   0.4       2.3       1.8       5.3       3.0
7223             Special food services                           1.5       2.6       1.1       4.1       1.4
7224             Drinking places, alcoholic beverages            0.2       0.1      -0.1       2.4       2.2



Last Modified Date: August 28, 2009