Productivity and Costs by Industry: Wholesale Trade and Retail Trade News Release

For release 10:00 a.m. (ET) Thursday, May 25, 2023                                             USDL-23-1089

Technical Information:  (202) 691-5606  •  productivity@bls.gov  •  www.bls.gov/productivity 
Media Contact:          (202) 691-5902  •  PressOffice@bls.gov


                                   PRODUCTIVITY AND COSTS BY INDUSTRY 
                           WHOLESALE TRADE AND RETAIL TRADE INDUSTRIES - 2022


Labor productivity declined 1.2 percent in wholesale trade and 0.4 percent in retail trade in 2022, the 
U.S. Bureau of Labor Statistics reported today. Unit labor costs, which reflect the total labor costs 
required to produce a unit of output, rose in both wholesale trade and retail trade.

Annual productivity decreased in retail trade for the first time since 2008, with output declining at a 
faster rate than hours worked. In wholesale trade, annual productivity decreased for the first time since 
2011, with hours worked growing at a higher rate than output. This was the second year in a row of 
increasing output and hours worked for wholesale trade after declining in 2020.

All 6 four-digit NAICS industries with the highest productivity growth reported increases in output and 
five showed declines in hours worked. Productivity growth was greatest in florists (+22.5 percent) where 
there was strong growth in output and a significant decline in hours worked. 

Among the 6 four-digit NAICS industries with the largest declines in productivity, output decreased in 
five and hours worked increased in all six. The two industries with the greatest decreases in productivity 
were furniture stores (-12.1 percent) and automobile dealers (-12.0 percent). (See table 1.)

Labor Productivity Rose in Nearly Half of the Three-Digit NAICS Industries in 2022

Productivity increased in 7 of the 15 three-digit NAICS industries studied in 2022. (See table 1.) The 
only industry with a double-digit gain was nonstore retailers (+11.1 percent). The next largest increases 
occurred in miscellaneous store retailers (+7.9 percent) and general merchandise stores (+5.3 percent). 
Both motor vehicle and parts dealers and furniture and home furnishings stores had the largest 
productivity decline (-10.9 percent each).
  
In wholesale trade, productivity fell 1.2 percent as output growth (+1.6 percent) was slower than 
growth in hours worked (+2.9 percent).
    •  Productivity increased in only 6 of the 19 four-digit NAICS wholesale trade industries while 
       output rose in 11 industries and hours worked grew in 17.
    •  Productivity rose 0.1 percent in durable goods wholesalers and fell 1.8 percent in nondurable 
       goods wholesalers.
    •  The highest increase in productivity occurred in lumber and construction supply merchant 
       wholesalers (+17.2 percent) as output rose at a much faster rate (+24.6 percent) than hours 
       worked (+6.4 percent).

In retail trade, productivity decreased 0.4 percent as output declined (-1.3 percent) slightly faster than 
hours worked (-1.0 percent).
    •  Productivity increased in only 10 of the 27 four-digit NAICS retail trade industries while output 
       grew in 12 industries and hours worked rose in 14. 
    •  Florists saw the largest productivity increase (+22.5 percent) as output increased 8.3 percent 
       while hours fell 11.6 percent.
    •  For the largest 10 industries in retail by employment, productivity increased in 4, output 
       increased in 3, and worker hours grew in 5.
    •  In grocery stores (the largest retail employer) hours worked rose 0.1 percent while output 
       decreased 1.0 percent, leading to a productivity decrease of 1.1 percent.

Unit Labor Costs Rise in Most Trade Industries in 2022

When hourly compensation outpaces productivity gains, unit labor costs grow. 
    •  Unit labor costs rose in 14 of 15 three-digit NAICS wholesale and retail trade industries in 2022; 
       electronics and appliance stores declined 1.4 percent.
    •  The largest increase in unit labor costs occurred in motor vehicle and parts dealers (+17.5 
       percent) in which hourly compensation grew 4.7 percent while productivity fell 10.9 percent. 
    •  Among four-digit NAICS industries, unit labor costs rose in 18 of 19 wholesale trade industries, 
       and in 23 of 27 retail trade industries.
    •  Hourly compensation rose in 42 of the 46 four-digit NAICS industries.

2019 to 2022 Trends

Output increased in 31 of the 46 four-digit trade industries from 2019 to 2022. (See table 3.) Note that 
the percent changes for periods of more than one year are annual percent changes. The two industries 
with the highest increases during that period were electronic shopping and mail-order houses (+18.1 
percent per year) and jewelry, luggage, and leather goods stores (+11.3 percent). The steepest annual 
declines in output during this period were shared between vending machine operators and petroleum 
merchant wholesalers (-6.8 percent each).

Hours worked decreased in 28 of the 46 four-digit trade industries from 2019 to 2022. The two 
industries with the largest decreases in hours worked over the 3 years were jewelry, luggage, and leather 
goods stores (-8.5 percent per year) and direct selling establishments (-7.1 percent). The industry with 
the largest increase in hours worked during this period was electronic shopping and mail-order houses 
(+4.2 percent).
 
Long-term Labor Productivity Increases in All but One Industry

From 1987 to 2022, labor productivity increased 2.5 percent per year in wholesale trade and 3.2 
percent per year in retail trade. (See table 2.)
    •  Among the 46 four-digit NAICS industries, productivity rose in all but one industry, metal and 
       mineral merchant wholesalers. 
    •  Of the 45 four-digit NAICS industries with increasing productivity growth, 40 experienced rising 
       output while 20 had increases in hours worked.
    •  Median productivity among four-digit NAICS industries grew at an annual rate of 2.0 percent.
    •  Among subperiods, productivity growth in wholesale durable, wholesale nondurable, and retail 
       trade industries was slower from 2007 to 2019 than during the years preceding and following. 
       The productivity growth in retail trade and wholesale nondurable goods industries was fastest in 
       the 2019-22 period.
    •  Productivity grew in 43 of the 46 four-digit NAICS industries during the 1987-2007 period. The 
       number of industries fell to 33 from 2007 to 2019 and then rose to 36 from 2019 to 2022.

Long-term Trends in Unit Labor Costs Vary by Sector

From 1987 to 2022, unit labor costs increased 1.5 percent per year in wholesale trade and 0.3 percent 
per year in retail trade. (See table 2.)
    •  Among the 46 four-digit NAICS industries, unit labor costs rose in 17 of 19 wholesale trade and 
       14 of 27 retail trade industries from 1987 to 2022. 
    •  Across sub-periods, unit labor costs rose in 29 industries in 1987-2007, 34 in 2007-19, and 40 
       industries in 2019-22. 
    •  In all three periods, unit labor costs remained positive for both wholesale durable and nondurable 
       goods. In retail trade, unit labor costs were slightly positive from 1987 to 2007, were unchanged 
       from 2007 to 2019, and rose 3.3 percent per year from 2019 to 2022.
 
Additional Information

The trade measures in this release incorporate 2017 Economic Census data and benchmark data from the 
Census Bureau's Annual Wholesale Trade Report (December 2022), Monthly Wholesale Trade Survey 
(May 2023), Annual Retail Trade Survey (December 2022), and Annual Revision of the Monthly Retail 
and Food Services: Sales and Inventories (April 2023). Accordingly, the labor productivity and output 
series for all industries have been revised for 2021 and earlier years. Additionally, the unit labor cost 
measures incorporate preliminary data from the BLS Quarterly Census of Employment and Wages 
(March 2023). 

Measures of hours worked for all industries reflect a change in methods and are revised historically. The 
new method of determining hours worked uses all-employee hours data from the BLS Current 
Employment Statistics (CES) survey as the main source of data. This is an improvement upon the prior 
method which instead used the CES production worker hours data. Another improvement is the use of 
BLS Current Population Survey (CPS) data to adjust CES all-employee hours paid to account for hours 
worked but not paid, also known as off-the-clock hours. Hours worked data also now incorporate all-
employee based hours-worked-to-hours-paid ratios from the National Compensation Survey, rather than 
ratios based only on production workers. For more information on the new hours worked method, see 
www.bls.gov/opub/mlr/2022/article/improving-estimates-of-hours-worked-for-us-
productivity-measurement.htm.

More information about the North American Industry Classification System (NAICS) can be found at 
www.census.gov/naics/.

Access the productivity data dashboard at www.bls.gov/productivity/tables/labor-productivity-detailed-
industries.xlsx for
    •  Additional industries and sectors
    •  Detailed data series: indexes of productivity and related measures; rates of change; and levels of 
       industry employment, hours worked, nominal value of production, and labor compensation 
    •  Additional years and long-term data

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                                       Technical Note

Labor Productivity: Labor productivity describes the relationship between output and the labor hours 
involved in its production. These measures show the changes from period to period in the amount of 
goods and services produced per hour worked. Although the labor productivity measures relate real 
output in an industry to hours worked of all persons in that industry, they do not measure the specific 
contribution of labor to growth in output. Rather, they reflect the joint effects of many influences, 
including: changes in technology; capital investment; utilization of capacity, energy, and materials; the 
use of purchased services inputs, including contract employment services; the organization of 
production; the characteristics and effort of the workforce; and managerial skill. 

Unit Labor Costs: Unit labor costs represent the cost of labor required to produce one unit of output. 
The unit labor cost indexes are computed by dividing an index of nominal industry labor compensation 
by an index of real industry output. Unit labor costs also describe the relationship between compensation 
per hour worked (hourly compensation) and real output per hour worked (labor productivity). When 
hourly compensation growth outpaces productivity, unit labor costs increase. Alternatively, when 
productivity growth exceeds hourly compensation, unit labor costs decrease. 

Output: Industry output is measured as an annual-weighted index of the changes in the various products 
(in real terms) provided for sale outside the industry. Real industry output for data in this release is 
derived by deflating nominal sales or values of production using price indexes. Industry output measures 
are constructed primarily using data from the economic censuses and annual surveys of the U.S. Census 
Bureau and U.S. Department of Commerce, together with information on price changes from BLS. 

Labor Hours: Labor hours are measured as annual hours worked by all employed persons in an 
industry. This includes hours worked for pay as well as uncompensated work time. Data on industry 
employment and hours come primarily from the BLS Current Employment Statistics (CES) survey and 
Current Population Survey (CPS). CES data on the number of jobs held by wage and salary workers in 
nonfarm establishments are supplemented with CPS data on self-employed and unpaid family workers 
to estimate industry employment. Hours worked estimates are derived using CES and CPS employment, 
CES data on the average weekly hours paid of all employees, CPS data on hours of self-employed and 
unpaid family workers, and ratios of hours worked to hours paid based on data from both the CPS and 
the National Compensation Survey (NCS). For some industries, employment and hours data are 
supplemented or further disaggregated using data from the BLS Quarterly Census of Employment and 
Wages (QCEW), the Census Bureau, or other sources. Hours worked are estimated separately for 
different types of workers and then are directly aggregated; no adjustments for labor composition are 
made.

Labor Compensation: Labor compensation, defined as payroll plus supplemental payments, is a 
measure of the cost to the employer of securing the services of labor. Payroll includes salaries, wages, 
commissions, dismissal pay, bonuses, vacation and sick leave pay, and compensation in kind. 
Supplemental payments include both legally required expenditures and payments for voluntary 
programs. The legally required portion consists primarily of federal old age and survivors’ insurance, 
unemployment compensation, and workers’ compensation. Payments for voluntary programs include all 
programs not specifically required by legislation, such as the employer portion of private health 
insurance and pension plans. Industry compensation measures are constructed primarily using data from 
the BLS QCEW and the economic censuses of the Census Bureau, U.S. Department of Commerce.

Annual Percent Change: The annual percent change is the compound annual growth rate in an index 
series over a period of more than one year. The change of an index series varies from year to year. 
However, the annual percent change is the constant rate that can be applied to each year in a period, 
from the start to the end, that would give the same total result. It is calculated as (Ending Value/Starting 
Value)^(1/Number of Years)-1.