Productivity and Costs by Industry: Wholesale Trade, Retail Trade, and Food Services and Drinking Places Industries - 2017

For release 10:00 a.m. (EDT) Thursday, July 19, 2018                                                 USDL-18-1181

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Labor productivity rose 2.7 percent in wholesale trade and 2.8 percent in retail trade, and declined by 
2.2 percent in food services and drinking places in 2017, 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 2017, productivity, output, and hours worked all increased at a faster rate than 
in 2016. In retail trade, the growth in output continued to outpace the growth in hours worked in 2017 
but led to a smaller productivity increase than in 2016. Productivity in food services and drinking 
places declined in 2017 due to hours worked increasing at a faster rate than output. In 2016, 
productivity increased in this industry group as a result of output growing at a faster rate than hours 

Labor Productivity Rose in Majority of Industries in 2017

Productivity increased in 12 of the 16 3-digit NAICS industries studied in 2017. Seven industries had 
productivity gains of at least 4.0 percent, including nonstore retailers which also had the largest 
increase in output (10.6 percent). Among the three industries with productivity declines, gasoline 
stations experienced the largest drop (-3.2 percent). 

Productivity increased in 32 of the 49 4-digit NAICS industries studied in 2017. Output grew in 34 
industries while hours worked grew in 31 industries.

In wholesale trade, productivity rose 2.7 percent as output grew 3.7 percent and hours worked 
increased 0.9 percent. 
      * Productivity grew 5.1 percent in durable goods wholesalers and 1.1 percent in nondurable 
        goods wholesalers. 
      * Productivity increased in 13 of the 19 4-digit wholesale trade industries while output rose 
        in 15 industries and hours worked grew in 13. 
      * Productivity increased most rapidly in motor vehicles and parts due to rapid growth in output 
        and a slight increase in hours worked. 

In retail trade, productivity increased by 2.8 percent, driven by growth in both output (3.9 percent) 
and hours worked (1.0 percent).
      * Productivity increased in 18 of the 27 4-digit retail trade industries while output grew in 
        17 industries and hours worked rose in 15. 
      * The largest productivity increases occurred in other motor vehicle dealers and in home 
        furnishings stores as output rose and hours worked declined in both industries. 
      * Other motor vehicle dealers experienced the largest growth in output (17.2 percent) resulting 
        in a 17.3 percent increase in productivity.

In food services and drinking places, productivity declined by 2.2 percent as growth in hours worked 
(2.7 percent) outpaced growth in output (0.5 percent). 
      * Drinking places (alcoholic beverages) was the only industry out of the three to experience 
        productivity growth (6.5 percent). 
      * All three 4-digit industries had increases in hours worked while special food services was 
        the only industry to have a decline in output. 

Unit Labor Costs Decline in About Half of the Industries in 2017

When productivity gains outpace hourly compensation, unit labor costs decline. 
      * Unit labor costs fell in 8 out of 16 3-digit industries in 2017. All unit labor cost declines 
        occurred in industries where productivity rose. 
      * Unit labor costs declined in 8 of 19 wholesale trade and 14 of 27 retail trade 4-digit 
        industries. Two of the food services and drinking places industries experienced an increase in 
        unit labor costs.
      * Hourly compensation, defined as labor compensation per hour worked, rose in 42 of the 49 
        4-digit industries.

Long-term Productivity Slowdown Reflected in All Three Industry Groups

From 1987 to 2017, labor productivity increased at an average annual rate of 2.8 percent in wholesale 
trade, 2.9 percent in retail trade, and 0.4 percent in food services and drinking places. 
      * Among the 4-digit industries, productivity rose in all but two industries from 1987 to 2017. 
        Median productivity among these industries grew at an average annual rate of 1.8 percent.
      * Of the 47 4-digit industries with increasing productivity growth, 43 experienced rising output 
        while 23 had an increase in hours worked.
      * All three industry groups experienced a slowdown in productivity growth from 2007 to 2017. 
        Productivity increased in 45 out of 49 4-digit industries from 1987 to 2007 compared to 33 
        industries from 2007 to 2017. 
From 1987 to 2017, unit labor costs increased at an average annual rate of 3.2 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 14 out of 49 industries from 1987 to 2017. 
        Unit labor costs declined in 2 out of 19 wholesale trade and in 12 out of 27 retail trade 
        industries and increased in all food services and drinking places industries.
      * From 2007 to 2017, unit labor costs declined in 15 out of 49 industries. All industries with 
        declines in unit labor costs experienced increases in productivity.
      * During the 1987 to 2007 and 2007 to 2017 periods, electronics and appliance stores had the largest 
        unit labor cost declines and the largest productivity gains among the 3-digit industries.

Additional Information

The trade and food services and drinking places measures in this release incorporate benchmark data from 
the Census Bureau’s Service Annual Survey (November 2017), Annual Wholesale Trade Report (March 2018), 
Monthly Wholesale Trade Survey (May 2018), Annual Retail Trade Survey (March 2018), Annual Revision of 
the Monthly Retail and Food Services: Sales and Inventories (May 2018), and Nonemployer Statistics (June 
2018). 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 2016 and earlier years. 
Additionally, the unit labor cost measures incorporate preliminary data from the BLS Quarterly Census of 
Employment and Wages (June 2018). 

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Last Modified Date: July 19, 2018