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Economic News Release
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Productivity and Costs, First Quarter 2020, Revised



Transmission of material in this release is embargoed until                                   USDL 20-1139
8:30 a.m. (EDT) Thursday, June 4, 2020

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

                                        PRODUCTIVITY AND COSTS 
                                      First Quarter 2020, Revised

Nonfarm business sector labor productivity decreased 0.9 percent in the first quarter of 2020, the U.S. 
Bureau of Labor Statistics reported today, as output decreased 6.5 percent and hours worked decreased 
5.6 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the 
first quarter of 2019 to the first quarter of 2020, productivity increased 0.7 percent, reflecting no change 
in output and a 0.7-percent decrease in hours worked. (See table A1.) 

Unit labor costs in the nonfarm business sector increased 5.1 percent in the first quarter of 2020, as 
hourly compensation increased 4.2 percent and productivity decreased 0.9 percent. Unit labor costs 
increased 1.9 percent over the last four quarters. (See table 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.

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                    Coronavirus (COVID-19) impact on First Quarter 2020 Productivity Data

BLS quarterly estimates of labor productivity combine output data with hours worked data based 
primarily on BLS Current Employment Statistics (CES) survey and supplemented with data from the 
Current Population Survey (CPS). The March reference period for these surveys largely predated many 
of the COVID-19-related job losses that occurred in the latter part of March. To capture these job losses, 
adjustments were made to employment and hours using supplementary data. Hours worked and related 
measures--including labor productivity--for the first quarter of 2020 reflect these adjustments. For more 
information see www.bls.gov/covid19/productivity-and-costs-first-quarter-2020-revised-adjusting-
march-2020-employment-and-hours.htm.
------------------------------------------------------------------------------------------------------------

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. The 0.9-
percent decline in nonfarm business sector labor productivity in the first quarter of 2020 was only the 
second quarterly decline since the fourth quarter of 2015, when output per hour decreased 2.9 percent. 
The 6.5-percent first-quarter 2020 decrease in output was the largest since the first quarter of 2009, 
when output also fell 6.5 percent, and the 5.6-percent decline in hours worked was the largest since the 
second quarter of 2009 (-8.7 percent). 

Manufacturing sector labor productivity increased 0.3 percent in the first quarter of 2020, as output 
decreased 6.3 percent and hours worked decreased 6.6 percent. Total manufacturing sector productivity 
declined 0.8 percent over the last four quarters, as output decreased 2.2 percent and hours worked 
decreased 1.4 percent. (See tables A1 and 3.) Productivity decreased 3.5 percent in the durable 
manufacturing sector in the first quarter of 2020, reflecting a 10.2-percent decrease in output and a 6.9-
percent decrease in hours worked. Productivity increased 4.3 percent in the nondurable manufacturing 
sector, as output decreased 2.0 percent and hours worked decreased 6.1 percent. (See tables A1, 4, and 
5.) Unit labor costs in the total manufacturing sector increased 6.9 percent in the first quarter of 2020, 
and increased 4.4 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. 

Preliminary first-quarter 2020 measures were announced today for the nonfinancial corporate sector. 
Productivity decreased 1.3 percent in the first quarter of 2020 as output decreased 5.0 percent and hours 
worked decreased 3.7 percent. Productivity increased 1.1 percent over the last four quarters. Unit profits 
of nonfinancial corporations decreased at a 43.3 percent annual rate in the first quarter of 2020 and 
decreased 8.4 percent over the last four quarters. (See table 6.) The 43.3-percent drop in unit profits in 
the first quarter of 2020 was the largest decline since the fourth quarter of 2001 (-46.7 percent). 

Revised measures        

Measures released today are based on more recent source data than were available for the 
preliminary report. Total hours worked are produced by combining data on employment and 
average weekly hours. For employees these data are primarily based on data from the Current 
Employment Statistics (CES) survey. The survey reference period for March predated many of the 
COVID-19-related job losses that occurred in the latter part of the month. In order to capture these 
job losses, adjustments were made to March employment based on DOL Employment and 
Training Administration weekly reports of the number of initial claims for unemployment 
insurance (UI) benefits. This approach was reflected in the preliminary estimates of first-quarter 
2020 labor productivity. Revised measures for the first quarter use this same basic methodology to 
estimate employment, but also use April data from the CES to better account for job losses that 
occurred in late March, as well as to adjust average weekly hours of employees. Hours worked by 
self-employed and unpaid family workers are based on data from the Current Population Survey 
(CPS). These hours worked data for March were adjusted using April CPS data and UI claims data. 
Hours worked and related measures--including labor productivity--for all sectors for the first 
quarter of 2020 reflect these adjustments.  

Table B1 presents previous and revised productivity and related measures for the business, 
nonfarm business, and manufacturing sectors for the first quarter of 2020. 

In the first quarter of 2020, nonfarm business productivity decreased 0.9 percent, rather than 2.5 
percent as reported May 7, due to a 0.3-percentage point downward revision to output and a 1.8-
percentage point downward revision to hours worked. Unit labor costs increased 5.1 percent rather 
than increasing 4.8 percent as previously reported, reflecting a 2.0-percentage point upward revision to 
hourly compensation that was largely offset by a 1.6-percentage point upward revision to productivity. 
In the manufacturing sector, productivity was revised up from a decrease of 3.3 percent to an increase of 
0.3 percent, due to a 0.8-percentage point upward revision to output and a 2.7-percentage point 
downward revision to hours worked. Unit labor costs increased 6.9 percent rather than the preliminary 
estimate of 3.6 percent, reflecting the upward revision to productivity and a 7.1-percentage point upward 
revision to hourly compensation.  

Table B2 shows previous and revised productivity and related measures for the business, nonfarm 
business, manufacturing, and nonfinancial corporate sectors for the fourth quarter of 2019. 

In the fourth quarter of 2019, labor productivity in the nonfarm business sector increased at the same 
1.2-percent rate reported May 7. Hourly compensation was revised up from the previously reported 
increase of 2.1 percent to a 3.4-percent increase. As a result, unit labor costs increased 2.2 percent in the 
fourth quarter of 2019, rather than increasing 0.9 percent. Total manufacturing sector productivity 
decreased 0.8 percent in the fourth quarter of 2019, a slightly larger decrease than previously reported. 
Hourly compensation was revised up 2.8 percentage points to a 5.5-percent increase; this led to an 
upward revision to unit labor costs, which increased 6.3 percent rather than increasing 3.5 percent.  

In the nonfinancial corporate sector, productivity rose 3.7 percent in the fourth quarter of 2019 rather 
than increasing 2.8 percent as previously reported, due solely to an upward revision to output. Annual 
average productivity in the nonfinancial corporate sector increased 1.9 percent in 2019, rather than the 
preliminary estimate of 1.8 percent. 

Complete quarterly and annual data series can be found on the Productivity and Costs home page: 
www.bls.gov/lpc/#data.
______________
The preliminary Productivity and Costs news release for second-quarter 2020 is scheduled to be 
released on Friday, August 14, 2020 at 8:30 a.m. (EDT).





=========================================================================================================================
Table A1. Labor productivity growth and related measures  revised first-quarter 2020
(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          -0.9         -6.5      -5.6          4.2             2.9       5.1
                         A year ago                 0.7          0.0      -0.7          2.6             0.4       1.9
Business                 Previous quarter          -0.7         -6.3      -5.6          3.9             2.7       4.7
                         A year ago                 0.7          0.1      -0.6          2.5             0.4       1.8
Manufacturing            Previous quarter           0.3         -6.3      -6.6          7.3             6.0       6.9
                         A year ago                -0.8         -2.2      -1.4          3.5             1.4       4.4
Durable manufacturing    Previous quarter          -3.5        -10.2      -6.9          7.5             6.2      11.4 
                         A year ago                -1.2         -3.2      -2.0          4.0             1.8       5.3
Nondurable manufacturing Previous quarter           4.3         -2.0      -6.1          6.8             5.5       2.4
                         A year ago                -0.7         -1.2      -0.4          2.9             0.7       3.6
=========================================================================================================================


=========================================================================================================================
Table A2. Labor productivity growth and related measures  revised first-quarter 2020
(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 corporate  Previous quarter           -1.3         -5.0      -3.7          4.2             3.0       5.6
                        A year ago                  1.1          0.6      -0.5          2.6             0.5       1.5
=========================================================================================================================


=========================================================================================================================
Table B1. Labor productivity growth and related measures  revised and previously published first-quarter 2020
(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                   -0.9         -6.5      -5.6          4.2             2.9       5.1
                         Previously published      -2.5         -6.2      -3.8          2.2             0.9       4.8
Business                 Revised                   -0.7         -6.3      -5.6          3.9             2.7       4.7
                         Previously published      -2.3         -6.0      -3.8          1.9             0.7       4.4
Manufacturing            Revised                    0.3         -6.3      -6.6          7.3             6.0       6.9
                         Previously published      -3.3         -7.1      -3.9          0.2            -1.0       3.6
Durable manufacturing    Revised                   -3.5        -10.2      -6.9          7.5             6.2      11.4
                         Previously published      -8.3        -11.9      -3.9         -2.2            -3.4       6.6
Nondurable manufacturing Revised                    4.3         -2.0      -6.1          6.8             5.5       2.4
                         Previously published       2.1         -1.8      -3.8          5.0             3.7       2.8
=========================================================================================================================


=========================================================================================================================
Table B2. 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          3.4              1.0       2.2
                         Previously published       1.2          2.4       1.2          2.1             -0.3       0.9
Business                 Revised                    1.0          2.4       1.4          3.2              0.8       2.2
                         Previously published       1.0          2.4       1.4          1.9             -0.5       0.9
Manufacturing            Revised                   -0.8         -0.2       0.5          5.5              3.0       6.3
                         Previously published      -0.7         -0.2       0.5          2.7              0.3       3.5
Durable manufacturing    Revised                   -1.2         -1.6      -0.4          8.4              5.9       9.7
                         Previously published      -1.0         -1.4      -0.4          4.1              1.6       5.1
Nondurable manufacturing Revised                   -0.9          1.2       2.1          0.2             -2.1       1.1
                         Previously published      -1.0          1.1       2.1          0.4             -2.0       1.3
Nonfinancial corporate   Revised                    3.7          4.9       1.2          3.8              1.4       0.1
                         Previously published       2.8          4.1       1.2          2.4              0.0      -0.4
=========================================================================================================================

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Last Modified Date: June 04, 2020