Last Modified Date: August 30, 2012
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 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.
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 derived by
deflating nominal sales using BLS price indexes. 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.
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. CES data are
supplemented with data from the Current Population Survey (CPS) to estimate employment and hours
of self-employed and unpaid family workers in each industry. Data from the CPS, together with the
CES data, are also used to estimate the historical average weekly hours of supervisory workers for each
industry. CES and CPS data are supplemented or further disaggregated for some industries using data
from the BLS Quarterly Census of Employment and Wages (QCEW), the Census Bureau, or other
sources. 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 hourly
compensation and labor productivity (real output per hour) and are an indicator of inflationary pressures
on producers. 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 survivorsí insurance, unemployment compensation, and workersí 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: The measures in this news release incorporate preliminary data from the Census Bureauís
Annual Wholesale Trade Report (March 2012), Monthly Wholesale Trade Survey (May 2012), Annual
Retail Trade Survey (March 2012), and the Annual Revision of the Monthly Retail and Food Services:
Sales and Inventories (April 2012), as well as data from the Census Bureauís Nonemployer Statistics
(August 2012). The labor productivity and output series for all industries have been revised for 2010 and
earlier years as a result. This news release also incorporates the annual benchmark revision of the BLS
Current Employment Statistics (CES) survey published in February 2012. In addition, the unit labor cost
measures incorporate preliminary data from the BLS Quarterly Census of Employment and Wages (June
2012). All of the measures for 2011 in this release are preliminary and subject to revision.
Additional Information: The industries included in this release are classified according to the 2007
NAICS. 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 rounded to three
Industry productivity and related indexes; rates of change; and levels of industry employment, hours,
nominal value of production and labor compensation are available on the Labor Productivity and Costs
web site at http://www.bls.gov/lpc/. Additional information can be obtained by calling the Division of
Industry Productivity Studies (202-691-5618) or by sending a request by e-mail to firstname.lastname@example.org.
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.
To subscribe to the industry productivity programís news releases, customers can register on the BLS
website at https://subscriptions.bls.gov/accounts/USDOLBLS/subscriber/new.