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February 2008, Vol. 131, No. 2
Labor productivity trends since 2000, by sector and industry
Corey Holman, Bobbie Joyeux, and Christopher Kask
U.S. productivity (as measured by output per hour) surged during the latter half of the 1990s, led by rapid output growth in industries that produced, sold, or intensively used information technology (IT) products. This surge was the focus of a great deal of attention by economists and policymakers. Recent interest has focused on productivity growth since 2000. After slowing and, in some sectors, declining during the recession that occurred in 2001, productivity growth rebounded, resulting in robust increases over the period from 2000 through 2005.1
This article focuses on labor productivity trends from 2000 through 2005 in some of the sectors and industries that make up the nonfarm business sector. These measures provide information on shifts in industrial efficiency and competitiveness in the component industries and sectors underlying the aggregate productivity statistics. The data used in this analysis are from the Bureau of Labor Statistics (BLS) industry productivity program, which produces data on productivity and related measures for selected sectors and industries of the U.S. economy.2
Productivity shifts among sectors and industries reflect recent events and economic conditions, as well as long-term structural shifts taking place in the American economy. Notable among the latter category are the declining importance of goods-producing sectors vis-à-vis the service-providing sectors, the rapid growth of IT, and the increased use of outsourcing and offshoring. While productivity continued to advance after 2000, the components of this growth differed from those that led to the productivity surge of the latter half of the 1990s.
This excerpt is from an article published in the February 2008 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 The National Bureau of Economic Research reports that a business cycle peak occurred in the first quarter of 2001, with the trough following in the fourth quarter of that year. During a recession, productivity typically falls or grows at rates below those seen during business cycle expansions.
2 Current industry productivity measures are available on the BLS Labor Productivity and Costs Web site at www.bls.gov/lpc/home. htm. Measures examined here are mainly for three- and four-digit industries, classified according to the North American Industry Classification System (NAICS).
Related BLS programs
productivity growth in wholesale trade, 1990-2000—Dec.
Labor productivity in the retail trade industry, 1987–99—Dec. 2001.
BLS completes major expansion of industry productivity series.—Sep. 1998.
BLS modernizes industry labor productivity program.—Jul. 1995.
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