Productivity and Costs, First Quarter 2016, Revised



Transmission of material in this release is embargoed until        USDL 16-1147
8:30 a.m. (EDT) Tuesday, June 7, 2016

Technical information: (202) 691-5606    dprweb@bls.gov   www.bls.gov/lpc
Media contact:         (202) 691-5902    PressOffice@bls.gov




                           PRODUCTIVITY AND COSTS
                        First Quarter 2016, Revised


Nonfarm business sector labor productivity decreased at a 0.6-percent annual 
rate during the first quarter of 2016, the U.S. Bureau of Labor Statistics 
reported today, as output increased 0.9 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 0.7 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.  Measures released today were based on 
more recent source data than were available for the preliminary report.

Unit labor costs in the nonfarm business sector increased 4.5 percent in the 
first quarter of 2016, reflecting a 3.9-percent increase in hourly 
compensation and a 0.6-percent decline 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 1.3 percent in the first 
quarter of 2016, as output increased 0.6 percent and hours worked decreased 
0.7 percent. Productivity decreased 0.6 percent in the durable goods 
manufacturing sector and increased 4.2 percent in the nondurable goods sector. 
Over the last four quarters, manufacturing productivity increased 1.3 percent, 
as output increased 0.6 percent and hours declined 0.7 percent. (See tables A, 
3, 4, and 5.)  Unit labor costs in manufacturing increased 1.1 percent in the 
first quarter of 2016 and rose 3.6 percent from the same quarter a year ago. 
Hourly compensation increased 2.5 percent in the first quarter of 2016, and 
5.0 percent since the same quarter a year ago--the largest four-quarter gain 
since a 5.8-percent increase from the first quarter of 2004 to the first 
quarter of 2005. (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 first quarter 2016 measures were announced today for the 
nonfinancial corporate sector. Productivity increased 2.5 percent in the first 
quarter of 2016 and increased 0.8 percent over the last four quarters. Unit 
profits of nonfinancial corporations grew at a 13.4 percent annual rate in the 
first quarter of 2016, but fell 8.0 percent over the last four quarters. (See 
tables C and 6.) 

Revised measures

Table B presents previous and revised productivity and related measures for 
the business, nonfarm business, and manufacturing sectors, for the first 
quarter of 2016 and the fourth quarter of 2015. 

In the first quarter of 2016, nonfarm business productivity fell 0.6 percent, 
a smaller decline than the preliminary estimate, due to a 0.5-percentage 
point upward revision to output. Unit labor costs were revised up as a 0.9-
percentage point upward revision to hourly compensation was partially offset 
by the 0.4-percentage point upward revision to productivity. In the 
manufacturing sector, productivity increased 1.3 percent in the first quarter 
of 2016--less than the preliminary estimate--reflecting an upward revision to 
hours worked and a slight downward revision to output. Unit labor costs 
increased 1.1 percent rather than declining 1.2 percent, due primarily to a 
1.9-percentage point upward revision to hourly compensation.
 
In the fourth quarter of 2015, nonfarm business sector productivity decreased 
at the same 1.7-percent rate reported May 4, while manufacturing productivity 
was revised down slightly. In both sectors, large upward revisions to hourly 
compensation resulted in large upward revisions to unit labor costs. 

In the nonfinancial corporate sector, productivity declined 0.9 percent in the 
fourth quarter of 2015 rather than falling 2.2 percent as previously reported, 
due solely to an upward revision to output. Annual average productivity 
increased 0.9 percent from 2014 to 2015, slightly more than the 0.8-percent 
increase reported May 4, but well below the long-term rate from 1947 to 2015 
of 2.3 percent. Unit profits of nonfinancial corporations fell 36.6 percent in 
the fourth quarter of 2015. (See tables C and 6.)

Complete annual and quarterly data series can be found on the Productivity and 
Costs home page: www.bls.gov/lpc/#data.
______________  







The preliminary Productivity and Costs news release for second-quarter 2016 is 
scheduled to be released on Tuesday, August 9, 2016 at 8:30 a.m. (EDT).






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Table A. Revised 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      -0.6      0.7    -0.7     0.8     1.3     1.3    -0.6     1.1     4.2     1.5
Output                   0.9      2.3     0.8     2.4     0.6     0.6    -0.2     0.3     1.6     1.1
Hours worked             1.5      1.6     1.6     1.6    -0.7    -0.7     0.4    -0.8    -2.5    -0.4
Hourly compensation      3.9      3.7     3.8     3.7     2.5     5.0     1.6     4.9     4.0     5.2
Real hourly 
compensation             4.2      2.6     4.1     2.6     2.8     3.8     1.9     3.8     4.3     4.0
Unit labor costs         4.5      3.0     4.5     2.9     1.1     3.6     2.2     3.7    -0.2     3.6
======================================================================================================
Table B. Revised and previous measures: first quarter 2016 and fourth quarter 2015

Sector            Nonfarm                                             Durable           Nondurable
                  Business         Business         Manufacturing     Manufacturing     Manufacturing
              Revised Previous  Revised Previous  Revised Previous  Revised Previous  Revised Previous
------------------------------------------------------------------------------------------------------
                                Percent change, annual rate, first quarter 2016
Labor 
 Productivity   -0.6    -1.0     -0.7     -1.1      1.3      1.9     -0.6      0.1      4.2      4.4
Output           0.9     0.4      0.8      0.4      0.6      0.7     -0.2     -0.1      1.6      1.7
Hours worked     1.5     1.5      1.6      1.6     -0.7     -1.1      0.4     -0.3     -2.5     -2.6
Hourly 
 compensation    3.9     3.0      3.8      2.9      2.5      0.6      1.6     -0.6      4.0      2.8
Real hourly 
 compensation    4.2     3.4      4.1      3.3      2.8      0.9      1.9     -0.3      4.3      3.1
Unit labor 
 costs           4.5     4.1      4.5      4.1      1.1     -1.2      2.2     -0.8     -0.2     -1.6
-----------------------------------------------------------------------------------------------------
                                Percent change, annual rate, fourth quarter 2015
Labor 
 Productivity   -1.7    -1.7     -1.8     -1.8     -1.2     -1.0     -2.1     -2.1      0.1      0.3
Output           1.5     1.5      1.5      1.5     -0.5     -0.4     -1.4     -1.4      0.6      0.8
Hours worked     3.3     3.3      3.4      3.4      0.6      0.6      0.7      0.7      0.5      0.5
Hourly 
 compensation    3.6     0.9      3.3      0.7      7.9      2.5      8.8      2.8      6.2      2.0
Real hourly 
 compensation    2.7     0.1      2.5     -0.1      7.1      1.7      8.0      1.9      5.3      1.2
Unit labor 
 costs           5.4     2.7      5.3      2.6      9.2      3.6     11.2      4.9      6.1      1.7
======================================================================================================
Table C. Nonfinancial corporations: preliminary first-quarter 2016 and revised fourth-quarter 
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, first quarter 2016
Q to Q            2.5     3.2       0.7       3.8          4.2          1.3        13.4        -2.0
Y to Y            0.8     2.5       1.7       3.7          2.6          2.8        -8.0         0.2
                                Percent change, annual rate, fourth quarter 2015                        
Q to Q Revised   -0.9     2.7       3.6       3.2          2.4          4.1       -36.6         0.1
Q to Q Previous  -2.2     1.3       3.6       0.9          0.1          3.1       -35.7         0.1
======================================================================================================

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Last Modified Date: June 07, 2016