Transmission of material in this release is embargoed until USDL-12-0162
8:30 a.m. (EST) Thursday, February 2, 2012
Technical information: (202) 691-5606 dprweb@bls.gov www.bls.gov/lpc
Media contact: (202) 691-5902 PressOffice@bls.gov
PRODUCTIVITY AND COSTS
Fourth Quarter and Annual Averages 2011, Preliminary
Nonfarm business sector labor productivity increased at a 0.7 percent
annual rate during the fourth quarter of 2011, the U.S. Bureau of Labor
Statistics reported today. The gain in productivity reflects increases of
3.6 percent in output and 2.9 percent in hours worked. (All quarterly
percent changes in this release are seasonally adjusted annual rates.)
From the fourth quarter of 2010 to the fourth quarter of 2011,
productivity grew 0.5 percent, as output rose 2.3 percent and hours rose
1.8 percent. (See table A.) Annual average productivity increased 0.7
percent from 2010 to 2011. (See table C.)
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.
Unit labor costs in nonfarm businesses increased 1.2 percent in the fourth
quarter of 2011, as productivity grew at a slower rate (0.7 percent) than
hourly compensation (1.9 percent). Unit labor costs rose 1.3 percent over
the last four quarters. (See table A.) Annual average unit labor costs
increased 1.2 percent from 2010 to 2011. (See table C.)
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 0.4 percent in the fourth
quarter of 2011, as output rose 3.8 percent and hours worked increased 4.2
percent; this is the largest quarterly gain in hours worked since the
fourth quarter of 2005 (4.8 percent). Over the last four quarters,
manufacturing productivity increased 1.7 percent. Annual average
productivity grew 2.8 percent from 2010 to 2011. Unit labor costs in
manufacturing increased 1.6 percent in the fourth quarter of 2011 but
decreased 1.1 percent from the same quarter a year ago. (See tables A, C
and 3.)
The data sources and methods used in the preparation of the manufacturing
output series differ from those used in preparing the business and nonfarm
business output series, and these measures are not directly comparable.
See Technical Notes for further information on data sources.
Table C presents annual averages for the most recent five years for the
nonfarm business sector and total manufacturing sector. Nonfarm business
sector productivity grew 0.7 percent in 2011, as output and hours
increased 2.4 percent and 1.7 percent, respectively. The increase in hours
worked is the first annual increase in the measure since 2007. Because
productivity grew more slowly than hourly compensation (1.9 percent), unit
labor costs rose in 2011(1.2 percent). Real hourly compensation, which
takes into account changes in consumer prices, fell 1.2 percent in 2011--
the largest decline in the annual series since a 1.7 percent decline in
1989.
In the manufacturing sector, productivity grew 2.8 percent in 2011,
reflecting a 4.9 percent increase in output combined with a 2.0 percent
increase in hours; this is the largest annual increase in manufacturing
sector hours since a 2.3 percent gain in 1994. Unit labor costs in the
manufacturing sector fell 1.3 percent in 2011.
Revised measures
Revised and previous measures for the third quarter of 2011 are shown in
tables B and D and cover the following major sectors: nonfarm business,
business, manufacturing, and nonfinancial corporations. Measures for the
nonfinancial corporate sector include historically revised gross product
of nonfinancial corporate business in chained (2005) dollars, published
December 22, 2011 by the Bureau of Economic Analysis of the U.S.
Department of Commerce.
In the third quarter of 2011, nonfarm business productivity growth was 1.9
percent, reflecting a downward revision to output and a slight upward
revision to hours. (See table B.) Unit labor costs for the nonfarm
business sector fell 2.1 percent in the third quarter, less than
previously reported.
In the nonfinancial corporate (NFC) sector, quarterly percent changes in
productivity and unit labor costs were not revised for the third quarter,
although indexes for these and other measures related to output were
revised historically.
Effective with this release, measures for the NFC sector, previously
beginning in 1958, have been extended back to 1947. These newly-introduced
data for the pre-1958 period are based upon the same methodology and data
sources as those for 1958 forward. Nonfinancial corporate sector
productivity grew at a 2.4 percent average annual rate from 1947 to 2010.
Quarterly and annual data for all sectors from 2009 to 2011 appear in
tables 1-6 and revised historical annual data for the nonfinancial
corporate sector in appendix table 1. Full historical measures can be
found on the productivity and costs home page at
http://www.bls.gov/lpc/#data.
___________
The revised Productivity and Costs press release for the fourth quarter
2011 is scheduled to be released on Wednesday, March 7, 2012 at 8:30 a.m.
(EST).
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Data in this release do not reflect the annual benchmark revision of the
BLS Current Employment Statistics program data to be released February 3,
2012. This benchmark will be incorporated in our next release on March 7,
2012.
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Table A. Preliminary fourth-quarter 2011 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
------------------------------------------------------------------------------------------------------
Productivity 0.7 0.5 0.6 0.2 -0.4 1.7 -0.4 3.0 1.3 1.6
Output 3.6 2.3 3.5 2.0 3.8 4.3 6.3 7.4 1.5 1.2
Hours 2.9 1.8 2.9 1.8 4.2 2.5 6.7 4.3 0.2 -0.4
Hourly
compensation 1.9 1.7 2.0 1.7 1.2 0.6 0.2 -0.2 2.7 1.8
Real hourly
compensation 1.0 -1.5 1.1 -1.6 0.3 -2.6 -0.8 -3.4 1.7 -1.5
Unit labor
costs 1.2 1.3 1.4 1.5 1.6 -1.1 0.6 -3.0 1.4 0.2
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Table B. Revised and previous measures: third quarter 2011
Sector Nonfarm Durable Nondurable
Business Business Manufacturing Manufacturing Manufacturing
Revised Previous Revised Previous Revised Previous Revised Previous Revised Previous
------------------------------------------------------------------------------------------------------
Percent change, annual rate
Productivity 1.9 2.3 1.5 1.9 5.3 5.0 8.7 9.5 1.6 0.1
Output 2.8 3.2 2.7 3.0 5.0 4.6 7.8 8.3 2.3 1.0
Hours 0.9 0.8 1.1 1.0 -0.3 -0.4 -0.9 -1.1 0.6 0.9
Hourly
compensation -0.3 -0.2 -0.6 -0.5 -0.6 -0.4 -0.2 0.2 -1.2 -1.3
Real hourly
compensation -3.2 -3.2 -3.5 -3.5 -3.5 -3.4 -3.1 -2.8 -4.1 -4.2
Unit labor
costs -2.1 -2.5 -2.1 -2.4 -5.6 -5.1 -8.2 -8.5 -2.8 -1.4
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Table C. Annual average changes in productivity and related measures: 2007-2011
Sector Nonfarm Business Manufacturing
2007 2008 2009 2010 2011 | 2007 2008 2009 2010 2011
--------------------------------------------------------------|---------------------------------------
Productivity 1.5 0.6 2.3 4.1 0.7 | 3.9 -0.5 0.5 6.1 2.8
Output 2.1 -1.5 -5.1 4.0 2.4 | 2.2 -4.4 -12.5 6.0 4.9
Hours 0.6 -2.1 -7.2 -0.1 1.7 | -1.7 -4.0 -13.0 0.0 2.0
Hourly |
compensation 4.0 3.4 1.6 2.1 1.9 | 3.2 4.3 4.5 1.6 1.5
Real hourly |
compensation 1.1 -0.4 2.0 0.4 -1.2 | 0.4 0.4 4.9 0.0 -1.7
Unit labor costs 2.4 2.8 -0.7 -2.0 1.2 | -0.7 4.8 4.0 -4.2 -1.3
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Table D. Nonfinancial corporations: revised third-quarter 2011 productivity and cost measures
Real
Hourly hourly Unit Implicit
Produc- compen- compen- labor Unit price
tivity Output Hours sation sation costs profits deflator
------------------------------------------------------------------------------------------------------
Percent change, annual rate, third quarter 2011
Revised -2.6 -0.8 1.9 0.3 -2.7 3.0 7.7 3.8
Previous -2.6 -0.8 1.9 0.3 -2.6 3.0 7.5 3.7
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