Last Modified Date: May 06, 2015
Labor Hours: Hours data for the labor productivity and cost measures
include hours for all persons working in the sector--wage and salary
workers, the self-employed and unpaid family workers. The primary source
of hours and employment data is the BLS Current Employment Statistics
(CES) program, which provides monthly survey data on the number of jobs
held by wage and salary workers in nonfarm establishments, counting a
person who is employed by two or more establishments at each place of
employment. The CES also provides average weekly paid hours of production
and nonsupervisory workers in these establishments. Weekly paid hours are
adjusted to hours at work using data from the National Compensation
Survey (NCS) for 2001 forward and data from the BLS Hours at Work survey,
conducted for this purpose, for earlier years. The Office of Productivity
and Technology estimates average weekly hours at work for nonproduction
and supervisory workers using information from the Current Population
Survey (CPS), the CES, and the NCS.
Data from the CPS are used to estimate hours worked for farm labor,
nonfarm proprietors, and nonfarm unpaid family workers. Using CPS
information on employment and hours worked at primary jobs and all other
jobs, separately, the BLS productivity measures assign all hours worked
to the correct industrial sector. Hours for government enterprises are
derived from the CPS, the CES, and the National Income and Product
Accounts (NIPA) prepared by the Bureau of Economic Analysis (BEA) of the
Department of Commerce.
Output: Business sector output is a chain-type, current-weighted index
constructed after excluding from gross domestic product (GDP) the
following outputs: general government, nonprofit institutions, and
private households (including owner-occupied housing). Corresponding
exclusions also are made in labor inputs. Business output accounted for
about 76 percent of the value of GDP in 2014. Nonfarm business, which
excludes farming, accounted for about 75 percent of GDP in 2014.
Annual indexes for manufacturing and its durable and nondurable goods
components are constructed by deflating current-dollar industry value of
production data from the U.S. Bureau of the Census with deflators from
the BLS. These deflators are based on data from the BLS producer price
program and other sources. The industry shipments are aggregated using
annual weights, and intrasector transactions are removed. Quarterly
manufacturing output measures are based on the indexes of industrial
production prepared monthly by the Board of Governors of the Federal
Reserve System, adjusted to be consistent with annual indexes of
manufacturing sector output prepared by BLS.
Nonfinancial corporate output is a chain-type, current-weighted index
calculated on the basis of the costs incurred and the incomes earned from
production. The output measure excludes the following outputs from GDP:
general government; nonprofit institutions; private households;
unincorporated business; and those corporations classified as offices of
bank holding companies, offices of other holding companies, or offices in
the finance and insurance sector. Nonfinancial corporations accounted for
about 49 percent of the value of GDP in 2014.
Labor Productivity: The measure describes the relationship between real
output and the labor time involved in its production. Measures of labor
productivity growth show the changes from period to period in the amount
of goods and services produced per hour worked. They reflect the joint
effects of many influences, including changes in technology; capital
investment; level of output; utilization of capacity, energy, and
materials; the organization of production; managerial skill; and the
characteristics and effort of the work force.
Labor Compensation: The measure includes accrued wages and salaries,
supplements, employer contributions to employee benefit plans, and taxes.
Estimates of labor compensation by major sector, required for measures of
hourly compensation and unit labor costs, are based primarily on employee
compensation data from the NIPA, prepared by the BEA. The compensation of
employees in general government, nonprofit institutions and private
households are subtracted from compensation of domestic employees to derive
employee compensation for the business sector. The labor compensation of
proprietors cannot be explicitly identified and must be estimated. This is
done by assuming that proprietors have the same hourly compensation as
employees in the same sector. The quarterly labor productivity and cost
measures do not contain estimates of compensation for unpaid family workers.
Unit Labor Costs: These measures describe the relationship between
compensation per hour and labor productivity, or real output per hour,
and can be used as an indicator of inflationary pressure on producers.
Increases in hourly compensation increase unit labor costs; labor
productivity increases offset compensation increases and lower unit labor
Presentation of the data: The quarterly data in this release are
presented in three ways: as percent changes from the previous quarter
presented at a compound annual rate, as percent changes from the
corresponding quarter of the previous year, and as index number series
where 2009=100. Annual data are presented both as index number series and
percent changes from the previous year.
The index numbers and rates of change reported in the productivity
and costs news release are rounded to one decimal place. All percent
changes in this release and on the BLS web site are calculated using
index numbers to three decimal places. These index numbers are available
at the BLS web site, www.bls.gov/data/home.htm, or by contacting the BLS
Division of Major Sector Productivity (Telephone 202-691-5606 or email
For a more detailed explanation of methodology see "Technical Information
About the Major Sector Productivity and Costs Methods" at
Information in this release will be made available to sensory-impaired
individuals upon request. Voice phone: 202-691-5606; Federal Relay
Service number: 1-800-877-8339.