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Economic News Release
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Productivity and Costs, Fourth Quarter and Annual Averages 2019, Revised



Transmission of material in this release is embargoed until                                   USDL 20-0378
8:30 a.m. (EST) Thursday, March 5, 2020

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


                                     PRODUCTIVITY AND COSTS 
                        Fourth Quarter and Annual Averages 2019, Revised

Nonfarm business sector labor productivity increased 1.2 percent in the fourth quarter of 2019, the 
U.S. Bureau of Labor Statistics reported today, as output increased 2.4 percent and hours worked 
increased 1.2 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) 
From the fourth quarter of 2018 to the fourth quarter of 2019, productivity increased 1.8 percent, 
reflecting a 2.6-percent increase in output and a 0.8-percent increase in hours worked. (See table A1.) 

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 0.9 percent in the fourth quarter of 2019 as 
hourly compensation grew at a faster rate (2.1 percent) than productivity (1.2 percent). Unit labor costs 
increased 1.7 percent over the last four quarters. (See table 2.)

========================================================================================================
                    Historical Revisions to Productivity and Costs Data

Data in this release reflect the annual benchmark revision of BLS Current Employment 
Statistics program data on private nonfarm employment and hours. See Revised measures.
========================================================================================================

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 decreased 0.8 percent in the fourth quarter of 2019, as output 
decreased 0.4 percent and hours worked increased 0.4 percent. Total manufacturing sector productivity 
declined 0.6 percent over the last four quarters, as output decreased 1.1 percent and hours worked 
decreased 0.5 percent. (See tables A1 and 3.) Productivity decreased 0.9 percent in the durable 
manufacturing sector in the fourth quarter of 2019, reflecting a 1.4-percent decrease in output and a 0.5-
percent decrease in hours worked. Productivity decreased 1.2 percent in the nondurable manufacturing 
sector, as output increased 0.8 percent and hours worked increased 2.0 percent. (See tables A1, 4, and 5.) 
Unit labor costs in the total manufacturing sector increased 3.6 percent in the fourth quarter of 2019, 
and increased 3.7 percent from the same quarter a year ago. (See table A1.)

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.

Revised measures        

Quarterly and annual measures of hours and related series--including productivity--were revised 
historically for all major sectors. The revisions incorporate revised Current Employment Statistics (CES) 
program data published February 7, 2020. From 2015 to 2019, the data were subject to revision as a 
result of annual benchmarking of CES data and revised seasonal adjustment of those data. From 1990 
onward, there were small revisions due to the CES reconstruction of two sectors; the transportation and 
warehousing sector, and the financial activities sector. Because hours worked were revised for the index 
base year of 2012, all measures incorporating hours worked--including productivity--were subject to 
revision back to 1947; resulting revisions to percent changes are small. Quarterly and annual measures 
of real hourly compensation for 2019 were revised due to revisions to consumer prices. In addition, third 
quarter, fourth quarter, and annual average data for 2019 were revised to incorporate regular updates of 
source data on output and compensation. 

Revised and previous measures for the fourth quarter of 2019 are shown in table B1 for the business, 
nonfarm business, and manufacturing sectors. In the fourth quarter of 2019, nonfarm business 
productivity was revised down slightly from an increase of 1.4 percent to an increase of 1.2 percent, 
reflecting a 0.1-percentage point downward revision to output and a 0.1-percentage point upward 
revision to hours. Unit labor costs were revised down from an increase of 1.4 percent to an increase of 
0.9 percent.

Manufacturing productivity decreased 0.8 percent rather than decreasing 1.2 percent in the fourth 
quarter of 2019, reflecting an upward revision to output that was larger than an upward revision to 
hours. A downward revision to hourly compensation and an upward revision to productivity both 
contributed to a downward revision to unit labor costs, which increased 3.6 percent rather than 5.9 
percent as previously reported. (See table B1.) 

In the third quarter of 2019, nonfarm business productivity was revised down slightly to a decline of 
0.3 percent. Unit labor costs were revised down to an increase of 0.2 percent rather than 2.5 percent as 
previously reported, reflecting a 2.4-percentage point downward revision to hourly compensation. In the 
manufacturing sector, productivity declined 0.5 percent rather than declining 0.3 percent as previously 
reported. Unit labor costs declined 0.7 percent rather than increasing 3.3 percent as previously reported, 
reflecting a large downward revision to hourly compensation. (See table B2.) Nonfinancial corporate 
sector productivity increased 0.9 percent in the third quarter of 2019 rather than 2.4 percent as 
previously reported, reflecting a 1.3-percentage point downward revision to output and a 0.1-percentage 
point upward revision to hours. (See table A2.)

Annual averages

Table C1 presents annual average changes for the most recent 5 years for the nonfarm business sector 
and the total manufacturing sector. Nonfarm business sector productivity grew 1.9 percent in 2019, as 
output increased 2.7 percent and hours worked increased 0.8 percent. The 1.9-percent increase in 
nonfarm business labor productivity is the largest annual increase since 2010, when it increased 3.4 
percent. The 0.8-percent increase in hours worked is the smallest increase in the annual series since 2010 
(-0.1 percent). The average annual rate of nonfarm business sector productivity growth from 2007 to 
2019--corresponding to the current business cycle--is 1.4 percent, which is below the long-term rate 
from 1947 to 2019 of 2.1 percent.

Unit labor costs in the nonfarm business sector increased 1.7 percent in 2019, reflecting increases of 3.6 
percent in hourly compensation and 1.9 percent in productivity. Real hourly compensation, which takes 
into account changes in consumer prices, increased 1.8 percent in 2019.

In the manufacturing sector, productivity grew 0.1 percent in 2019, as output was unchanged and 
hours worked decreased 0.1 percent. The average annual rate of manufacturing productivity growth 
from 2007 to 2019 is 0.4 percent, well below the long-term rate from 1987 to 2019 of 2.5 percent. Unit 
labor costs increased 3.1 percent in 2019. 

Quarterly and annual data for all sectors from 2017 to 2019 appear in tables 1-6. Full historical 
measures can be found on the Productivity and Costs home page: www.bls.gov/lpc/#data.
______________
The preliminary Productivity and Costs news release for first-quarter 2020 is scheduled to be 
released on Thursday, May 7, 2020 at 8:30 a.m. (EDT).





=========================================================================================================================
Table A1. Labor productivity growth and related measures - revised fourth-quarter 2019
(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           1.2          2.4      1.2        2.1            -0.2          0.9
                        A year ago                 1.8          2.6      0.8        3.5             1.5          1.7
                        
Business                Previous quarter           1.0          2.4      1.4        1.9            -0.5          0.9
                        A year ago                 1.8          2.7      0.8        3.6             1.5          1.7
                        
Manufacturing           Previous quarter          -0.8         -0.4      0.4        2.8             0.4          3.6
                        A Year ago                -0.6         -1.1     -0.5        3.1             1.1          3.7
 Durable
 manufacturing          Previous quarter          -0.9         -1.4     -0.5        4.2             1.7          5.1
                        A year ago                -0.3         -1.2     -1.0        3.2             1.1          3.5
 Nondurable
 manufacturing          Previous quarter          -1.2          0.8      2.0        0.4            -1.9          1.6
                        A year ago                -1.2         -0.9      0.2        3.1             1.0          4.3
=========================================================================================================================


=========================================================================================================================
Table A2. Labor productivity growth and related measures - revised and previously published third-quarter 2019
(percent change from previous quarter at annual rate)

                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                                          productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------       
Nonfinancial             Revised                0.9             1.7      0.7        0.1            -1.7         -0.8
corporate          Previously published         2.4             3.0      0.6        2.4             0.6          0.0
=========================================================================================================================


=========================================================================================================================
Table B1. Labor productivity growth and related measures - revised and previously published fourth-quarter 2019
(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                   1.2          2.4      1.2        2.1            -0.2          0.9
                    Previously published           1.4          2.5      1.1        2.8             0.3          1.4
                        
 Business                Revised                   1.0          2.4      1.4        1.9            -0.5          0.9
                    Previously published           1.1          2.4      1.3        2.6             0.0          1.5
                        
 Manufacturing           Revised                   -0.8        -0.4      0.4        2.8             0.4          3.6
                    Previously published           -1.2        -1.0      0.2        4.6             2.0          5.9
 
  Durable                Revised                   -0.9        -1.4     -0.5        4.2             1.7          5.1
  manufacturing     Previously published           -0.8        -1.6     -0.8        6.6             3.9          7.5
                         
  Nondurable             Revised                   -1.2         0.8      2.0        0.4            -1.9          1.6
  manufacturing     Previously published           -2.2        -0.4      1.9        1.1            -1.4          3.4
=========================================================================================================================


=========================================================================================================================
Table B2. Labor productivity growth and related measures - revised and previously published third-quarter 2019
(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                   -0.3          2.3      2.7       -0.1            -1.9          0.2
                   Previously published           -0.2          2.3      2.5        2.3             0.5          2.5
                        
Business                Revised                   -0.4          2.4      2.7       -0.1            -1.9          0.3
                   Previously published           -0.2          2.4      2.6        2.3             0.5          2.6
                        
Manufacturing           Revised                   -0.5          0.9      1.4       -1.2            -3.0         -0.7
                   Previously published           -0.3          1.0      1.3        3.1             1.2          3.3

 Durable                Revised                    0.4          1.5      1.1       -2.2            -3.9         -2.6
 manufacturing     Previously published            0.6          1.7      1.1        2.5             0.7          1.9
                        
 Nondurable             Revised                   -1.7          0.2      1.9        0.9            -0.9          2.6
 manufacturing     Previously published           -1.3          0.3      1.6        4.2             2.4          5.5
=========================================================================================================================


=========================================================================================================================
Table C1. Labor productivity growth and related measures - annual average changes: 2015-2019


                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                  Year                    productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business        2019                       1.9          2.7      0.8        3.6             1.8          1.7
                        2018                       1.4          3.5      2.0        3.2             0.8          1.8
                        2017                       1.3          2.9      1.5        3.5             1.3          2.1
                        2016                       0.3          1.7      1.5        1.1            -0.2          0.8
                        2015                       1.3          3.5      2.1        3.1             2.9          1.7
                        
Manufacturing           2019                       0.1          0.0     -0.1        3.2             1.3          3.1
                        2018                       0.4          2.3      1.9        2.2            -0.3          1.8
                        2017                      -0.4          0.6      1.0        3.6             1.4          4.0
                        2016                      -0.2         -0.2      0.0        0.5            -0.8          0.7
                        2015                      -1.8         -0.9      1.0        2.5             2.3          4.4
=========================================================================================================================

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Last Modified Date: March 05, 2020