Transmission of material in this release is embargoed until USDL 18-0682
8:30 a.m. (EDT) Thursday, May 3, 2018
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 2018, Preliminary
Nonfarm business sector labor productivity increased 0.7 percent during the
first quarter of 2018, the U.S. Bureau of Labor Statistics reported today,
as output increased 2.8 percent and hours worked increased 2.1 percent. (All
quarterly percent changes in this release are seasonally adjusted annual
rates.) From the first quarter of 2017 to the first quarter of 2018,
productivity increased 1.3 percent, reflecting a 3.6-percent increase in
output and a 2.2-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 2.7 percent in the
first quarter of 2018, reflecting a 3.4-percent increase in hourly
compensation and a 0.7-percent increase in productivity. 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. When the change in
consumer prices was taken into account, real hourly compensation declined
0.1 percent in the first quarter of 2018. Unit labor costs increased 1.1
percent over the last four quarters. (See tables A1 and 2.)
Manufacturing sector labor productivity rose 0.5 percent in the first
quarter of 2018, as output increased 3.3 percent and hours worked increased
2.8 percent. Productivity increased 1.3 percent in the durable manufacturing
sector, as output grew at a 5.5-percent rate and hours worked increased 4.2
percent. In the non-durable goods manufacturing sector, a 0.6-percent
increase in productivity reflected a 1.1-percent increase in output and a
0.5-percent increase in hours worked. Over the last four quarters, total
manufacturing sector productivity increased 0.8 percent, as output increased
2.5 percent and hours worked increased 1.6 percent. Unit labor costs in
manufacturing increased 2.7 percent in the first quarter of 2018 and
increased 1.3 percent from the same quarter a year ago. (See tables A1 and
3.)
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 fourth quarter and annual 2017 measures were announced today for
the nonfinancial corporate sector. Productivity increased 0.8 percent in the
fourth quarter of 2017 and increased 1.7 percent over the last four
quarters. Annual average productivity increased 1.0 percent from 2016 to
2017, following a decline of 0.1 percent in the previous year. The
historical average annual rate of productivity growth in the nonfinancial
corporate sector between 1947 and 2017 is 2.2 percent. (See tables A2, C1,
and 6.)
Revised measures
Hours and related measures, including productivity, were revised back to
2013 for all sectors to incorporate updated ratios of hours worked to hours
paid by detailed industry; resulting revisions are small. Measures of real
hourly compensation for all sectors were revised from 2010 forward to
incorporate new and revised data from the BLS Office of Prices and Living
Conditions. Output and related measures--including labor productivity and
unit labor costs--for the manufacturing sector incorporate historically
revised indexes of industrial production published by the Board of Governors
of the Federal Reserve System on March 23, 2018.
In the fourth quarter of 2017, nonfarm business sector productivity
increased 0.3 percent, rather than unchanged as reported March 7. Unit labor
costs were revised down to an increase of 2.1 percent. Total manufacturing
sector productivity increased 4.5 percent in the fourth quarter of 2017, a
smaller increase than previously reported, reflecting both a downward
revision to output and an upward revision to hours worked. Unit labor costs
in the manufacturing sector decreased 2.2 percent during the fourth quarter,
a smaller decline than previously reported. Fourth-quarter 2017 labor
productivity was revised down 3.0 percentage points in the durable goods
sector to an increase of 5.1 percent, and was revised up 0.1 percentage
point in the nondurable goods sector to an increase of 3.5 percent. (See
table B1.)
Annual average productivity growth in the nonfarm business sector was
revised up for 2017, from 1.2 percent to 1.3 percent. (See table 2.) The
annual average rate of manufacturing productivity growth for 2017 was
revised down slightly from 0.6 percent to 0.4 percent, and the rate for 2016
was revised down from positive 0.4 percent to negative 0.4 percent. (See
table 3.) The average annual rate of productivity growth in the total
manufacturing sector from 2007 to 2017--corresponding to the current
business cycle--was revised down from 0.8 percent to 0.7 percent.
Quarterly and annual data for all sectors for recent years appear in tables
1-6 and appendix tables 1-6. Full historical annual and quarterly measures
can be found on the labor productivity and costs home page at
www.bls.gov/lpc/#data.
The revised Productivity and Costs news release for first-quarter 2018 is
scheduled to be released on Wednesday, June 6, 2018 at 8:30 a.m. (EDT)
=========================================================================================================================
Table A1. Labor productivity growth and related measures – preliminary first-quarter 2018
(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 0.7 2.8 2.1 3.4 -0.1 2.7
A year ago 1.3 3.6 2.2 2.5 0.2 1.1
Business Previous quarter 1.1 2.8 1.6 3.9 0.4 2.8
A year ago 1.4 3.5 2.1 2.6 0.3 1.2
Manufacturing Previous quarter 0.5 3.3 2.8 3.2 -0.3 2.7
A Year ago 0.8 2.5 1.6 2.1 -0.1 1.3
Durable
manufacturing Previous quarter 1.3 5.5 4.2 4.2 0.7 2.9
A year ago 1.5 2.6 1.2 2.9 0.7 1.4
Nondurable
manufacturing Previous quarter 0.6 1.1 0.5 1.0 -2.4 0.4
A year ago -0.1 2.3 2.4 0.7 -1.5 0.9
=========================================================================================================================
=========================================================================================================================
Table A2. Labor productivity growth and related measures – preliminary fourth-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 0.8 3.5 2.7 2.0 -1.3 1.2
corporate A year ago 1.7 3.9 2.2 2.6 0.5 0.9
=========================================================================================================================
=========================================================================================================================
Table B1. Labor productivity growth and related measures – revised and previously published fourth-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 0.3 3.7 3.3 2.4 -0.8 2.1
Previously published 0.0 3.2 3.3 2.4 -1.2 2.5
Business Revised -0.4 3.6 4.1 1.7 -1.6 2.1
Previously published -0.8 3.1 4.0 1.7 -2.0 2.5
Manufacturing Revised 4.5 5.6 1.1 2.2 -1.1 -2.2
Previously published 6.0 6.6 0.5 2.5 -1.2 -3.3
Durable Revised 5.1 5.5 0.4 2.3 -1.0 -2.6
manufacturing Previously published 8.1 8.1 0.0 2.4 -1.3 -5.3
Nondurable Revised 3.5 5.8 2.2 2.3 -1.0 -1.1
manufacturing Previously published 3.4 4.9 1.5 2.7 -0.9 -0.6
=========================================================================================================================
=========================================================================================================================
Table C1. Labor productivity growth and related measures – annual average changes: 2013-2017
Labor Hours Hourly Real hourly Unit labor
Sector Year productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial corporate..2017 1.0 2.8 1.7 1.5 -0.6 0.5
........................2016 -0.1 1.4 1.5 1.1 -0.2 1.2
........................2015 1.4 3.6 2.2 3.0 2.8 1.6
........................2014 1.3 4.0 2.7 2.6 0.9 1.3
........................2013 0.2 2.3 2.0 1.3 -0.1 1.1
=========================================================================================================================
