Transmission of material in this release is embargoed until USDL 15-2291
8:30 a.m. (EST) Wednesday, December 2, 2015
Technical information: (202) 691-5606 dprweb@bls.gov www.bls.gov/lpc
Media contact: (202) 691-5902 PressOffice@bls.gov
PRODUCTIVITY AND COSTS
Third Quarter 2015, Revised
Nonfarm business sector labor productivity increased at a 2.2-percent annual
rate during the third quarter of 2015, the U.S. Bureau of Labor Statistics
reported today, as output increased 1.8 percent and hours worked decreased
0.3 percent. (All quarterly percent changes in this release are seasonally
adjusted annual rates.) The decline in hours worked was the first decline in
this series since a 4.8-percent decline in the third quarter of 2009. From
the third quarter of 2014 to the third quarter of 2015, productivity
increased 0.6 percent, reflecting increases in output and hours worked of 2.5
percent and 1.9 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 are based on
more recent source data than were available for the preliminary report.
Unit labor costs in the nonfarm business sector increased 1.8 percent in the
third quarter of 2015, reflecting a 4.0-percent increase in hourly
compensation and a 2.2-percent increase in productivity. Unit labor costs
increased 3.0 percent over the last four quarters. (See tables A and 2.)
BLS calculates 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 labor productivity increased 5.1 percent in the third
quarter of 2015—the largest gain since a 6.1-percent increase in the third
quarter of 2011—as output increased 3.2 percent and hours worked decreased
1.8 percent. Productivity increased 6.9 percent in the durable goods
manufacturing sector and increased 2.3 percent in the nondurable goods
sector. (See tables A, 3, 4, and 5.) Over the last four quarters,
manufacturing productivity increased 1.5 percent, as output increased 2.0
percent and hours increased 0.4 percent. Unit labor costs in manufacturing
increased 2.3 percent in the third quarter of 2015 and increased 2.1 percent
from the same quarter a year ago. (See tables A and 3.) The concepts,
sources, and methods used for the manufacturing output series differ from
those used in the business and nonfarm business output series; these output
measures are not directly comparable. See the Technical Notes for a more
detailed explanation.
Preliminary third-quarter 2015 measures of productivity and costs were
announced for the nonfinancial corporate sector. Productivity increased 2.9
percent in the third quarter of 2015, as output increased 4.3 percent and
hours worked increased 1.4 percent. Unit labor costs increased 1.2 percent.
Revised measures
The measures released today are based on more recent source data than were
available for the preliminary report. Table B presents previous and revised
productivity and related measures for the business, nonfarm business, and
manufacturing sectors, for the second and third quarters of 2015.
In the third quarter of 2015, nonfarm business labor productivity increased
2.2 percent, rather than 1.6 percent as reported on November 5. The revised
figure reflects an upward revision to output that was larger than a small
upward revision to hours. Unit labor costs were revised up, and increased
1.8 percent rather than increasing 1.4 percent, as the upward revision to
productivity was smaller than a 1.0 percentage point upward revision to
hourly compensation growth. In the manufacturing sector, productivity
increased 5.1 percent rather than increasing 4.9 percent as previously
reported, as the upward revision to output was larger than the upward
revision to hours. Unit labor costs increased 2.3 percent, a larger increase
than the preliminary estimate.
In the second quarter of 2015, nonfarm business labor productivity, output,
and hours were unrevised. Unit labor costs increased 2.0 percent, rather
than decreasing 1.8 percent as previously reported, the result of a large
upward revision to hourly compensation. In the manufacturing sector, output
growth and productivity growth were both revised up by 0.1 percentage point.
Hourly compensation was revised up to a 5.5-percent increase from a
preliminary estimate of 0.0 percent. As a result, unit labor costs were
revised up, and increased 3.3 percent instead of decreasing 2.0 percent.
Second-quarter 2015 measures of productivity and costs were revised for the
nonfinancial corporate sector. Productivity increased 1.6 percent rather
than decreasing 0.5 percent as reported on November 5, due to a 2.0
percentage point upward revision to output. (See table C.)
Complete annual and quarterly data series can be found on the Productivity
and Costs home page: www.bls.gov/lpc/#data.
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The preliminary Productivity and Costs news release for fourth-quarter 2015
is scheduled to be released on Thursday, February 4, 2016 at 8:30 a.m. (EST).
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Calendar year 2016 release dates for Productivity and Costs news releases are
now available at www.bls.gov/schedule/news_release/prod2.htm.
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Table A. Revised third-quarter 2015 measures: percent change from previous quarter, at annual rate
(Q to Q) and from same quarter a year ago (Y to Y)
Sector Nonfarm Durable Nondurable
Business Business Manufacturing Manufacturing Manufacturing
Q to Q Y to Y Q to Q Y to Y Q to Q Y to Y Q to Q Y to Y Q to Q Y to Y
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Labor Productivity 2.2 0.6 2.7 0.6 5.1 1.5 6.9 1.9 2.3 0.6
Output 1.8 2.5 2.3 2.6 3.2 2.0 3.7 1.6 2.7 2.4
Hours worked -0.3 1.9 -0.4 2.0 -1.8 0.4 -3.0 -0.3 0.3 1.8
Hourly compensation 4.0 3.6 4.1 3.6 7.5 3.7 7.5 3.5 7.7 4.2
Real hourly
compensation 2.4 3.4 2.4 3.4 5.8 3.5 5.9 3.4 6.0 4.0
Unit labor costs 1.8 3.0 1.3 2.9 2.3 2.1 0.6 1.6 5.3 3.5
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Table B. Revised and previous measures: third quarter and second quarter 2015
Sector Nonfarm Durable Nondurable
Business Business Manufacturing Manufacturing Manufacturing
Revised Previous Revised Previous Revised Previous Revised Previous Revised Previous
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Percent change, annual rate, third quarter 2015
Labor
Productivity 2.2 1.6 2.7 2.0 5.1 4.9 6.9 7.3 2.3 1.3
Output 1.8 1.2 2.3 1.5 3.2 2.7 3.7 3.5 2.7 1.8
Hours worked -0.3 -0.5 -0.4 -0.5 -1.8 -2.1 -3.0 -3.6 0.3 0.5
Hourly
compensation 4.0 3.0 4.1 3.1 7.5 5.9 7.5 5.8 7.7 6.2
Real hourly
compensation 2.4 1.4 2.4 1.5 5.8 4.2 5.9 4.2 6.0 4.5
Unit labor
costs 1.8 1.4 1.3 1.1 2.3 0.9 0.6 -1.4 5.3 4.8
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Percent change, annual rate, second quarter 2015
Labor
Productivity 3.5 3.5 3.7 3.7 2.2 2.1 2.8 2.6 1.1 1.2
Output 5.1 5.1 5.0 5.0 1.3 1.2 1.4 1.2 1.2 1.3
Hours worked 1.5 1.5 1.2 1.2 -0.8 -0.8 -1.4 -1.4 0.1 0.1
Hourly
compensation 5.6 1.7 5.9 2.0 5.5 0.0 5.3 -0.3 5.9 0.7
Real hourly
compensation 2.5 -1.2 2.8 -0.9 2.4 -2.9 2.3 -3.1 2.8 -2.3
Unit labor
costs 2.0 -1.8 2.1 -1.6 3.3 -2.0 2.5 -2.8 4.7 -0.5
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Table C. Nonfinancial corporations: preliminary third quarter and revised second quarter 2015
Real
Labor Hourly hourly Unit Implicit
produc- Hours compen- compen- labor Unit price
tivity Output worked sation sation costs profits deflator
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Percent change, annual rate, third quarter 2015
Q to Q 2.9 4.3 1.4 4.1 2.5 1.2 0.7 0.5
Y to Y 1.4 3.3 1.9 2.9 2.7 1.5 -5.3 -0.4
Percent change, annual rate, second quarter 2015
Q to Q Revised 1.6 2.0 0.4 5.7 2.6 4.1 5.8 2.4
Q to Q Previous -0.5 0.0 0.4 2.1 -0.8 2.6 8.0 2.4
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