Transmission of material in this release is embargoed until USDL 17-1221
8:30 a.m. (EDT) Thursday, September 7, 2017
Technical information: (202) 691-5606 Productivity@bls.gov www.bls.gov/lpc
Media contact: (202) 691-5902 PressOffice@bls.gov
PRODUCTIVITY AND COSTS
Second Quarter 2017, Revised
Nonfarm business sector labor productivity increased 1.5 percent during the
second quarter of 2017, the U.S. Bureau of Labor Statistics reported today,
as output increased 4.0 percent and hours worked increased 2.5 percent. (All
quarterly percent changes in this release are seasonally adjusted annual
rates.) From the second quarter of 2016 to the second quarter of 2017,
productivity increased 1.3 percent, reflecting a 2.8-percent increase in
output and a 1.5-percent increase in hours worked. (See tables A1 and 2.)
Labor productivity, or output per hour, is calculated by dividing an index of
real output by an index of hours worked by all persons, including employees,
proprietors, and unpaid family workers.
Unit labor costs in the nonfarm business sector increased 0.2 percent in the
second quarter of 2017, reflecting a 1.8-percent increase in hourly
compensation and a 1.5-percent increase in productivity. Unit labor costs
decreased 0.2 percent over the last four quarters. (See tables A1 and 2.)
BLS calculates unit labor costs as the ratio of hourly compensation to labor
productivity. Increases in hourly compensation tend to increase unit labor
costs, and increases in output per hour tend to reduce them.
Manufacturing sector labor productivity increased 2.9 percent in the second
quarter of 2017, as output increased 2.1 percent and hours worked decreased
0.7 percent. The increase in manufacturing output per hour is the largest
since the first quarter of 2012, when the measure increased 3.2 percent.
Productivity increased 3.8 percent in the durable goods manufacturing sector
and increased 0.5 percent in the nondurable goods sector in the second quarter
of 2017. The larger productivity gain in durable goods industries was due
primarily to a 2.7-percent decline in hours worked, as output increased 1.0
percent. In contrast, the modest increase in nondurable manufacturing
productivity reflected a 2.8-percent increase in hours worked and a 3.4-
percent increase in output. Over the last four quarters, total manufacturing
sector productivity increased 1.1 percent, as output increased 1.6 percent and
hours worked increased 0.5 percent. (See tables A1, 3, 4 and 5.) Unit labor
costs in manufacturing decreased 0.4 percent in the second quarter of 2017 and
rose 0.1 percent from the same quarter a year ago.
The concepts, sources, and methods used for the manufacturing output series
differ from those used in the business and nonfarm business output series;
these output measures are not directly comparable. See the Technical Notes for
a more detailed explanation.
Preliminary second-quarter 2017 measures of productivity and costs were
announced for the nonfinancial corporate sector. Productivity increased 4.6
percent in the second quarter of 2017, as output increased 7.8 percent, and
hours worked increased 3.1 percent; the increase in output was the largest
since a 9.9-percent gain in the first quarter of 2012. Unit labor costs
decreased 2.6 percent, as hourly compensation increased 1.9 percent and
productivity increased 4.6 percent. (See tables A2 and 6.)
Revised measures
The measures released today are based on more recent source data than were
available for the preliminary report. Table B1 presents previous and revised
productivity and related measures for the nonfarm business, business, and
manufacturing sectors.
In the second quarter of 2017, nonfarm business productivity was revised up
0.6 percentage point to an increase of 1.5 percent. Output was revised up to
an increase of 4.0 percent; hours were not revised. Unit labor costs increased
0.2 percent rather than increasing 0.6 percent as reported August 9, as a
0.6-percentage point upward revision to productivity was slightly offset by
a 0.2-percentage point upward revision to hourly compensation.
In the second quarter of 2017, manufacturing sector productivity was revised
up to an increase of 2.9 percent from a previously-reported increase of 2.5
percent. Unit labor costs decreased 0.4 percent, a slightly larger decline
than previously reported. Durable goods manufacturing productivity was not
revised, and nondurable goods manufacturing productivity was revised up to an
increase of 0.5 percent.
Table B2 shows previous and revised productivity and related measures for the
nonfarm business, business, manufacturing and nonfinancial corporate sectors
for the first quarter of 2017.
In the first quarter of 2017, nonfarm business productivity increased at the
same 0.1-percent rate reported in the preliminary estimate. Unit labor costs
were revised down 0.6 percentage point to an increase of 4.8 percent.
Manufacturing sector productivity was revised down slightly to an increase of
0.2 percent. Hourly compensation and unit labor costs had upward revisions of
0.2 percentage point and 0.4 percentage point, respectively.
In the nonfinancial corporate sector, first-quarter 2017 productivity
increased at the same 2.0-percent rate that was previously reported. Unit
labor costs were revised up slightly to an increase of 2.3 percent. (See table
B2.)
Hourly compensation and related measures, including unit labor costs, in the
business and nonfarm business sectors were revised back to the first quarter
of 2014 to incorporate revised data used in the estimation of employee
compensation. In both sectors, annual average growth in unit labor costs was
revised up 0.1 percentage point in 2016, revised down 0.1 percentage point in
2015, and revised up 0.1 percentage point in 2014.
Full historical annual and quarterly measures can be found on the productivity
and costs home page: www.bls.gov/lpc/#data.
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Methodology change for manufacturing output
Beginning with the Productivity and Costs news release scheduled for December
6, 2017, BLS plans to incorporate source data reflecting a change in
methodology for estimating manufacturing output. For more information see:
www.bls.gov/mfp/sectoraloutputrevisions.htm.
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The preliminary Productivity and Costs news release for third-quarter 2017 is
scheduled to be released on Thursday, November 2, 2017 at 8:30 a.m. (EDT).
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Table A1. Labor productivity growth and related measures - revised second-quarter 2017
(percent change from previous quarter at annual rate and from same quarter a year ago)
Labor Hours Hourly Real hourly Unit labor
Sector Percent change from: productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business Previous quarter 1.5 4.0 2.5 1.8 2.1 0.2
A year ago 1.3 2.8 1.5 1.1 -0.8 -0.2
Business Previous quarter 1.3 3.7 2.4 1.8 2.1 0.5
A year ago 1.3 2.6 1.3 1.3 -0.6 0.0
Manufacturing Previous quarter 2.9 2.1 -0.7 2.5 2.8 -0.4
A Year ago 1.1 1.6 0.5 1.3 -0.6 0.1
Durable Previous quarter 3.8 1.0 -2.7 3.1 3.5 -0.6
manufacturing A year ago 1.3 1.6 0.3 0.9 -1.0 -0.4
Nondurable Previous quarter 0.5 3.4 2.8 1.6 1.9 1.0
manufacturing A year ago 0.8 1.5 0.8 1.9 0.0 1.1
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Table A2. Labor productivity growth and related measures - preliminary second-quarter 2017
(percent change from previous quarter at annual rate and from same quarter a year ago)
Labor Hours Hourly Real hourly Unit labor
Sector Percent change from: productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial Previous quarter 4.6 7.8 3.1 1.9 2.2 -2.6
corporate A year ago 1.9 3.7 1.8 1.1 -0.8 -0.8
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Table B1. Labor productivity growth and related measures - revised and previously published second-quarter 2017
(percent change from previous quarter at annual rate)
Labor Hours Hourly Real hourly Unit labor
Sector productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business Revised 1.5 4.0 2.5 1.8 2.1 0.2
Previously published 0.9 3.4 2.5 1.6 1.9 0.6
Business Revised 1.3 3.7 2.4 1.8 2.1 0.5
Previously published 0.6 3.1 2.4 1.6 1.9 0.9
Manufacturing Revised 2.9 2.1 -0.7 2.5 2.8 -0.4
Previously published 2.5 1.6 -0.9 2.2 2.5 -0.3
Durable Revised 3.8 1.0 -2.7 3.1 3.5 -0.6
manufacturing Previously published 3.8 0.9 -2.7 3.0 3.3 -0.8
Nondurable Revised 0.5 3.4 2.8 1.6 1.9 1.0
manufacturing Previously published -0.1 2.3 2.4 1.1 1.4 1.2
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Table B2. Labor productivity growth and related measures - revised and previously published first-quarter 2017
(percent change from previous quarter at annual rate)
Labor Hours Hourly Real hourly Unit labor
Sector productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business Revised 0.1 1.8 1.6 4.9 1.7 4.8
Previously published 0.1 1.8 1.6 5.5 2.3 5.4
Business Revised -0.8 1.4 2.1 4.3 1.1 5.1
Previously published -0.8 1.4 2.1 4.9 1.7 5.7
Manufacturing Revised 0.2 2.3 2.1 4.4 1.2 4.3
Previously published 0.3 2.4 2.1 4.2 1.0 3.9
Durable Revised -1.0 2.6 3.6 2.5 -0.6 3.6
manufacturing Previously published -0.9 2.7 3.6 2.3 -0.9 3.2
Nondurable Revised 2.5 2.0 -0.5 8.0 4.7 5.3
manufacturing Previously published 2.6 2.1 -0.5 7.8 4.5 5.1
Nonfinancial Revised 2.0 4.1 2.0 4.3 1.1 2.3
corporate Previously published 2.0 4.0 2.0 4.2 1.0 2.2
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