Productivity and Costs, First Quarter 2016, Preliminary



Transmission of material in this release is embargoed until        USDL 16-0880
8:30 a.m. (EDT) Wednesday, May 4, 2016

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                           PRODUCTIVITY AND COSTS
                       First Quarter 2016, Preliminary
                       
                       
                       
Nonfarm business sector labor productivity decreased at a 1.0-percent annual 
rate during the first quarter of 2016, the U.S. Bureau of Labor Statistics 
reported today, as output increased 0.4 percent and hours worked increased 
1.5 percent. (All quarterly percent changes in this release are seasonally 
adjusted annual rates.) From the first quarter of 2015 to the first quarter 
of 2016, productivity increased 0.6 percent. (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. 

Unit labor costs in the nonfarm business sector increased 4.1 percent in the 
first quarter of 2016, reflecting a 3.0-percent increase in hourly 
compensation and a 1.0-percent decrease in productivity. Unit labor costs 
increased 2.3 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 1.9 percent in the first 
quarter of 2016, as output increased 0.7 percent and hours worked decreased 
1.1 percent. Productivity increased 0.1 percent in the durable goods 
manufacturing sector and increased 4.4 percent in the nondurable goods 
sector. Over the last four quarters, manufacturing productivity increased 1.5 
percent, as output increased 0.7 percent and hours declined 0.8 percent. (See 
tables A, 3, 4, and 5.) Unit labor costs in manufacturing decreased 1.2 
percent in the first quarter of 2016 and rose 1.6 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 fourth quarter and annual 2015 measures were announced today for 
the nonfinancial corporate sector. Productivity decreased 2.2 percent in the 
fourth quarter of 2015 and decreased 0.5 percent over the last four quarters. 
Annual average productivity increased 0.8 percent from 2014 to 2015. Unit 
profits of nonfinancial corporations fell 35.7 percent in the fourth quarter 
of 2015, which is the largest quarterly decline since a 41.8-percent decline 
in the fourth quarter of 2008. The measure has declined 15.2 percent over the 
last four quarters, which is the largest four-quarter decline since a 15.8-
percent decline in the third quarter of 2009. (See tables C and 6.)

Revised measures                

Measures of real hourly compensation for all sectors were revised from the 
second quarter of 2011 forward, due to incorporation of new and revised data 
from the BLS Office of Prices and Living Conditions. Output data for the 
manufacturing sector incorporate historically revised indexes of industrial 
production published by the Board of Governors of the Federal Reserve System 
on April 1. 

In the fourth quarter of 2015, nonfarm business sector productivity decreased 
1.7 percent--a smaller decline than reported March 3--reflecting an upward 
revision to output. Unit labor costs increased 2.7 percent, a smaller increase
than previously reported. Total manufacturing sector productivity decreased 
1.0 percent in the fourth quarter of 2015, as output was revised down more 
than hours. Unit labor costs in the total manufacturing sector increased 3.6
percent during the quarter. There were also revisions to measures for the 
durable and nondurable manufacturing sectors. (See table B.)

There were historical revisions to manufacturing labor productivity. The 
annual average rate of productivity growth for 2015 was revised down from 1.3 
percent to 0.2 percent and the rate for 2014 was revised down from 1.3 
percent to negative 0.1 percent. (See table 3.)

Quarterly and annual data for all sectors for recent years appear in tables 
1-6 and appendix tables 1-6. Full historical annual and quarterly 
measures can be found on the labor productivity and costs home page at 
www.bls.gov/lpc/#data. 
 
______________  






The revised Productivity and Costs news release for first-quarter 2016 is 
scheduled to be released on Tuesday, June 7, 2016 at 8:30 a.m. (EDT).






======================================================================================================
Table A. Preliminary first-quarter 2016 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
------------------------------------------------------------------------------------------------------
Labor Productivity      -1.0      0.6    -1.1     0.7     1.9     1.5     0.1     1.3     4.4     1.6
Output                   0.4      2.2     0.4     2.3     0.7     0.7    -0.1     0.3     1.7     1.1
Hours worked             1.5      1.6     1.6     1.6    -1.1    -0.8    -0.3    -1.0    -2.6    -0.5
Hourly compensation      3.0      2.8     2.9     2.9     0.6     3.1    -0.6     2.8     2.8     3.8
Real hourly 
 compensation            3.4      1.7     3.3     1.8     0.9     2.0    -0.3     1.7     3.1     2.7
Unit labor costs         4.1      2.3     4.1     2.2    -1.2     1.6    -0.8     1.5    -1.6     2.1
======================================================================================================
Table B. Revised and previous measures: fourth quarter and annual averages 2015

Sector            Nonfarm                                             Durable           Nondurable
                  Business         Business         Manufacturing     Manufacturing     Manufacturing
              Revised Previous  Revised Previous  Revised Previous  Revised Previous  Revised Previous
------------------------------------------------------------------------------------------------------
                                Percent change, annual rate, fourth quarter 2015
Labor 
 Productivity   -1.7    -2.2     -1.8     -2.2     -1.0     -0.7     -2.1     -1.8      0.3      0.3
Output           1.5     1.0      1.5      1.0     -0.4      0.1     -1.4     -1.2      0.8      1.6
Hours worked     3.3     3.2      3.4      3.3      0.6      0.8      0.7      0.6      0.5      1.2
Hourly
 compensation    0.9     1.1      0.7      0.9      2.5      2.4      2.8      2.9      2.0      1.6
Real hourly 
 compensation    0.1     0.9     -0.1      0.7      1.7      2.2      1.9      2.7      1.2      1.3
Unit labor 
 costs           2.7     3.3      2.6      3.2      3.6      3.2      4.9      4.8      1.7      1.2
------------------------------------------------------------------------------------------------------
                                     Percent change, annual average 2015
Labor 
 Productivity    0.7     0.7      0.6      0.6      0.2      1.3      0.0      1.6      0.2      0.8
Output           2.9     2.8      3.0      2.9      1.1      2.2      0.5      2.1      1.7      2.3
Hours worked     2.1     2.1      2.3      2.3      0.8      0.9      0.5      0.5      1.5      1.5
Hourly 
 compensation    2.8     2.8      2.7      2.7      2.2      2.2      2.0      2.0      2.4      2.4
Real hourly 
 compensation    2.7     2.7      2.5      2.5      2.0      2.0      1.9      1.9      2.3      2.3
Unit labor 
 costs           2.1     2.1      2.0      2.0      1.9      0.8      2.0      0.4      2.2      1.6
======================================================================================================
Table C. Nonfinancial corporations: preliminary fourth-quarter and annual average 2015 productivity 
and cost measures
                                                          Real 
               Labor                         Hourly       hourly       Unit                   Implicit
               produc-             Hours     compen-      compen-      labor      Unit        price
               tivity    Output    worked    sation       sation       costs      profits     deflator
------------------------------------------------------------------------------------------------------
                                Percent change, annual rate, fourth quarter 2015
Q to Q          -2.2      1.3       3.6       0.9          0.1          3.1       -35.7        0.1
Y to Y          -0.5      1.3       1.8       2.3          1.9          2.9       -15.2        0.5
------------------------------------------------------------------------------------------------------
                                        Percent change, annual average 2015                     
2015             0.8      3.0       2.2       2.0          1.9          1.2        -5.4       -0.2
======================================================================================================

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Last Modified Date: May 04, 2016