Productivity by State News Release

For release 10:00 a.m. (ET) Thursday, May 30, 2024                                             USDL-24-1067

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

				
				PRODUCTIVITY BY STATE - 2023
 

Labor productivity in the private nonfarm sector increased in 36 states, the U.S. Bureau of Labor 
Statistics reported today. Output increased in 47 states and the District and declined in Delaware, Iowa, 
and South Dakota. Hours worked increased in 42 states and the District. Alaska experienced the highest 
growth in labor productivity, an increase of 7.8 percent. 

Labor productivity, output, and hours worked for selected states, percent change, 2023 
   • Four states experienced productivity growth of more than 4.0 percent: Alaska (+7.8 percent), West 
     Virginia (+5.3 percent), Wyoming (+4.8 percent), and Washington (+4.2 percent). 
   • Three states had output growth exceeding 6.0 percent: Alaska (+7.0 percent), North Dakota (+6.4 
     percent), and Texas (+6.3 percent).
   • North Dakota and Hawaii saw the highest growth in hours worked (+5.0 percent and +4.9 percent, 
     respectively).
   • Delaware, Iowa, and South Dakota experienced a decline in output combined with an increase in hours 
     worked.
   • Labor productivity growth in six states was the result of increasing output and declining 
     hours worked: Alaska, California, Indiana, Maryland, Mississippi, and Missouri.

Contributions to national labor productivity, 2023 

Each state’s annual contribution to national productivity growth is calculated by multiplying the state’s 
productivity growth rate by its average share of total current dollar national output. The economic size of 
each state influences its contribution to national and regional estimates. Representing about 14 percent of 
national output, California had the largest influence on national productivity growth. The state’s 2.4-
percent increase in labor productivity in 2023 contributed to over one-quarter of the 1.2-percent increase 
at the national level.

2019-23 trends
Labor productivity increased in all but seven states from 2019 to 2023. Note that the annual percent 
changes for periods of more than 1 year are annualized average rates of change over the entire period, or a 
compound annual growth rate. 
   • Labor productivity declined from 2019 to 2023 in six states:
      o Delaware (-1.3 percent)
      o North Dakota (-1.0 percent)
      o Hawaii (-0.9 percent)
      o South Dakota (-0.7 percent)
      o Louisiana (-0.4 percent)
      o Oklahoma (-0.2 percent)
   • Seventeen states and the District of Columbia had productivity growth that outpaced the +1.4 
     percent growth of the nation. 
   • Labor productivity growth exceeded 3.0 percent in Nebraska (+3.6 percent), Washington (+3.3 
     percent), and the District of Columbia (+3.1 percent).
   • The District of Columbia saw the largest decrease in hours worked (-1.7 percent).
   • Output growth was highest in Florida (+4.6 percent). 
   • Idaho saw the highest growth in hours worked (+3.1 percent). 
   • Hours worked declined for 12 states and the District of Columbia.

Long-term trends
   • From 2007 to 2023, labor productivity rose in 48 states and the District of Columbia. 
   • Washington experienced the highest rate of labor productivity growth of 2.6 percent per year. 
   • Productivity in Louisiana fell from 2007 to 2023 (-0.2 percent).
   • Output grew in 47 states and the District of Columbia while hours worked grew in 38 states and 
     the District of Columbia. 

Contributions to national labor productivity, annual percent change, 2007-23

California, Texas, and New York, which have the largest economies, contributed the most 
to national productivity growth, nearly 40 percent of the 1.3-percent increase.
 
Additional Information

Output and compensation measures for 2022 and earlier years reflect revisions to Gross Domestic Product 
by state and industry data published by the Bureau of Economic Analysis. Hours and employment data 
through 2022 have been revised to incorporate the BLS 2023 Current Employment Statistics benchmark. 

Access the following productivity data at www.bls.gov/productivity/tables/labor-productivity-by-state-
and-region.xlsx:
   • Detailed data series: indexes of productivity and related measures; rates of change; and levels of state 
     employment, hours worked, value-added output, and labor compensation 
   • Additional years and long-term data

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Technical Note

Labor Productivity: Labor productivity describes the relationship between real 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 output 
in a state to hours worked of all persons in that state, 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. 

Output: Measures of real value-added output for the private nonfarm sector are created using GDP by 
state and industry data published by the Bureau of Economic Analysis (BEA). BEA does not produce a 
private nonfarm sector measure of real output by state. To create the necessary output series, several 
industry components are subtracted — the farm sector, private households, and owner-occupied housing 
- from GDP by state using a Fisher ideal index formula. 

Labor Hours: Labor hours are measured as annual hours worked by all workers in the private nonfarm 
sector of each state. All workers include the sum of BLS Current Employment Statistics (CES) data on the 
number of jobs held by wage and salary workers in nonfarm establishments and Current Population Survey 
(CPS) data on the number of self-employed and unpaid family workers. Labor hours worked for wage and 
salary workers are estimated using CES data on hours paid of all employees. Paid hours are adjusted to an 
hours worked concept using ratios of hours worked to hours paid based on data from the National 
Compensation Survey (NCS) and off-the-clock hours incorporated from CPS data. Hours worked of self-
employed and unpaid family workers are directly from the CPS. Hours worked are estimated separately for 
different types of workers and then are directly aggregated; no adjustments for labor composition are 
made.

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.

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. Labor compensation measures are 
constructed using BEA nonfarm compensation less private household compensation. Compensation for 
self-employed and unpaid family workers are imputed by assuming that hourly compensation for these 
workers is the same as the average wage and salary worker in each state. 

Contributions to Labor Productivity: Each state’s contribution to national productivity growth is 
calculated by multiplying the state’s productivity growth rate by its average share of total current dollar 
national output. Adding up these contributions will approximate, but may not exactly equal, growth rates 
of national productivity. Contributions measures used in this release capture the effects of within-state 
productivity changes but do not include the effects of shifting shares of output and labor among states.

Annual Percent Change: The annual percent change is the change in a series from one year to the next 
as a percent of the series value in the previous year. Over a period of more than one year, the annual 
percent change is the compound annual growth rate in an index series, or an annualized average growth 
rate. Because the change of an index series varies from year to year, the annual percent change for a long 
time period reflects 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.