Productivity and Costs by Industry: Wholesale Trade, Retail Trade, and Food Services and Drinking Places Industries - 2016

For release 10:00 a.m. (EDT) Thursday, August 3, 2017                                                 USDL-17-1069

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Labor productivity rose 1.2 percent in wholesale trade, 4.6 percent in retail trade, and 1.3 percent in 
food services and drinking places in 2016, 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 food services 
and drinking places and fell in wholesale trade and retail trade.

For wholesale trade in 2016, productivity, output, and hours worked all increased at a slower rate than in 
2015. In retail trade, the growth in output far outpaced the growth in hours worked leading to a bigger 
productivity increase in 2016 than in 2015. Productivity growth in food services and drinking places in 
2016 was slightly less than that of 2015 as output increased at a slower rate. 

Labor Productivity Rose in Majority of Industries in 2016

Productivity increased in all of the 16 3-digit NAICS industries studied in 2016 except for health and 
personal care stores. Seven industries had productivity gains of at least 4.0 percent. Nonstore retailers, 
which includes electronic shopping and mail-order houses, had the largest increase in output (12.6 percent).

Productivity increased in 36 of the 49 4-digit NAICS industries studied in 2016. Output grew in 41 
industries while hours worked grew in 29 industries. 

In wholesale trade, productivity rose 1.2 percent as output grew 1.6 percent and hours worked increased 
0.4 percent. 
      * Productivity grew 0.5 percent in durable goods wholesalers and 1.0 percent in nondurable goods 
      * Productivity increased in 12 of the 19 4-digit wholesale trade industries while output rose in 14 
        industries and hours worked grew in 11. 
      * Productivity increased most rapidly in petroleum merchant wholesalers and farm product raw 
        material merchant wholesalers as output increased and hours worked fell in both industries. 

In retail trade, productivity and output grew 4.6 percent with hours worked virtually unchanged.
      * Productivity increased in 21 of the 27 4-digit retail trade industries while output grew in 24 
        industries and hours worked rose in 16. 
      * The largest productivity increases were in florists and office supplies, stationery, and gift stores 
        as output rose and hours worked declined in both industries. 
      * The electronic shopping and mail-order houses industry experienced the largest growth in output 
        (14.1 percent) resulting in an 11.4 percent increase in productivity.

In food services and drinking places, productivity rose 1.3 percent as output grew 3.5 percent and 
hours worked rose 2.2 percent. Output and productivity rose in all three 4-digit industries; hours worked 
rose in two industries.
Productivity Exceeded Hourly Compensation in Majority of Industries in 2016

When productivity gains outpace hourly compensation, unit labor costs facing employers decline. 
      * Unit labor costs fell in 12 out of 16 3-digit industries in 2016. All unit labor cost declines 
        occurred in industries where productivity rose.
      * Unit labor costs declined in 7 of 19 wholesale trade and 18 of 27 retail trade 4-digit industries. 
        Two of the food services and drinking places industries experienced an increase in unit labor 
      * Hourly compensation, defined as labor compensation per hour worked, rose in 36 of the 49 
        4-digit industries.

Long-term Productivity Slowdown Reflected in All Three Industry Groups

From 1987 to 2016, labor productivity increased at an average annual rate of 2.8 percent in wholesale 
trade, 2.9 percent in retail trade, and 0.5 percent in food services and drinking places. 
      * Among the 4-digit industries, productivity rose in all but three industries from 1987 to 2016. 
        Median productivity among these industries grew at an average annual rate of 2.0 percent.
      * Over the long term, productivity growth was associated with rising output in 43 out of 49 4-digit 
        industries while hours worked increased in 26 industries.
      * The growth in productivity from 1987 to 2007 exceeded the growth in productivity from 2007 to 
        2016 in all three industry groups. Productivity increased in 45 out of 49 4-digit 
        industries from 1987 to 2007 compared to 34 industries from 2007 to 2016. 

From 1987 to 2016, unit labor costs increased at an average annual rate of 3.1 percent in food services 
and drinking places, the greatest change among the three industry groups. Unit labor costs increased by 
0.9 percent in wholesale trade and were unchanged in retail trade.
      * Among the 4-digit industries, unit labor costs fell in 15 out of 49 industries from 1987 to 2016. 
        Unit labor costs declined in 2 out of 19 wholesale trade and 13 out of 27 retail trade industries 
        while increasing in all food services and drinking places industries.
      * From 2007 to 2016, unit labor costs declined in 15 out of 49 industries. All industries with 
        declines in unit labor costs experienced increases in productivity.
      * Among the 3-digit industries, electronics and appliance stores had the largest unit labor cost 
        declines and the largest productivity gains during the 1987 to 2007 and 2007 to 2016 periods.

Additional Information

The trade and food services and drinking places measures in this release incorporate benchmark data 
from the Census Bureau’s Annual Wholesale Trade Report (February 2017), Monthly Wholesale Trade 
Survey (May 2017), Annual Retail Trade Survey (March 2017), Annual Revision of the Monthly Retail 
and Food Services: Sales and Inventories (May 2017), and Nonemployer Statistics (May 2017). Data 
have been benchmarked to the final results of the 2012 Economic Census. Accordingly, the labor 
productivity and output series for all industries have been revised for 2015 and earlier years. 
Additionally, the unit labor cost measures incorporate preliminary data from the BLS Quarterly Census 
of Employment and Wages (June 2017). 

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Last Modified Date: August 03, 2017