Transmission of material in this release is embargoed until                                  USDL 18-1738
8:30 a.m. (EDT) Thursday, November 1, 2018

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


                                       PRODUCTIVITY AND COSTS
                                  Third Quarter 2018, Preliminary
                                                
Nonfarm business sector labor productivity increased 2.2 percent during the third quarter of 2018, the 
U.S. Bureau of Labor Statistics reported today, as output increased 4.1 percent and hours worked 
increased 1.8 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) 
From the third quarter of 2017 to the third quarter of 2018, productivity increased 1.3 percent, reflecting 
a 3.7-percent increase in output and a 2.4-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 1.2 percent in the third quarter of 2018, 
reflecting a 3.5-percent increase in hourly compensation and a 2.2-percent increase in labor productivity. 
Unit labor costs increased 1.5 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 0.5 percent in the third quarter of 2018, as output 
increased 3.4 percent and hours worked increased 2.9 percent. Productivity increased 1.5 percent in the 
durable manufacturing sector, as output rose 4.9 percent and hours worked increased 3.4 percent. In the 
non-durable goods manufacturing sector, a 0.1-percent decline in productivity reflected a 1.9-percent 
increase in output and a 2.0-percent increase in hours worked. Over the last four quarters, total 
manufacturing sector productivity increased 1.3 percent, as output increased 3.4 percent and hours 
worked increased 2.1 percent. Unit labor costs in manufacturing increased 0.9 percent in the third 
quarter of 2018 and increased 0.9 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. 

Revised measures

Revised and previous measures for the second quarter of 2018 are shown in tables A2 and B1, covering 
the following major sectors: nonfarm business, business, manufacturing, and nonfinancial corporations.

In the second quarter of 2018, nonfarm business sector productivity increased 3.0 percent, slightly 
higher than reported on September 6. Unit labor costs declined 1.0 percent during the second quarter, 
the same rate as previously reported. In the manufacturing sector, productivity was revised down 0.3 
percentage point to an increase of 1.2 percent, due to a downward revision to output. Durable 
manufacturing productivity was revised down from 1.1 percent to 0.3 percent, due to a downward 
revision to output; nondurable manufacturing productivity was revised up slightly to 2.4 percent. Unit 
labor costs in total manufacturing increased 0.1 percent rather than decreasing 0.2 percent as 
previously reported.

Second-quarter 2018 measures of productivity and costs were revised for the nonfinancial corporate 
sector. Productivity decreased 0.9 percent rather than decreasing 0.7 percent as previously reported. 
Unit labor costs increased 2.7 percent rather than the preliminary estimate of a 2.4-percent increase. 
(See table A2.)

Complete annual and quarterly data series can be found on the Productivity and Costs home page: 
www.bls.gov/lpc/#data.
______________
The revised Productivity and Costs news release for third-quarter 2018 is scheduled to be released 
on Wednesday, December 5, 2018 at 8:30 a.m. (EST)



=========================================================================================================================
Table A1. Labor productivity growth and related measures - preliminary third-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           2.2          4.1      1.8        3.5           1.4           1.2
                        A year ago                 1.3          3.7      2.4        2.8           0.1           1.5
                        
Business                Previous quarter           1.9          4.1      2.1        3.2           1.2           1.2
                        A year ago                 1.2          3.6      2.4        2.8           0.1           1.5
                        
Manufacturing           Previous quarter           0.5          3.4      2.9        1.5          -0.5           0.9
                        A Year ago                 1.3          3.4      2.1        2.2          -0.4           0.9
 Durable
 manufacturing          Previous quarter           1.5          4.9      3.4        1.8          -0.2           0.3
                        A year ago                 1.6          4.0      2.4        2.7           0.1           1.1
 Nondurable
 manufacturing          Previous quarter          -0.1          1.9      2.0        0.8          -1.2           0.9
                        A year ago                 1.2          2.7      1.5        1.2          -1.4           0.0
=========================================================================================================================


=========================================================================================================================
Table A2. Labor productivity growth and related measures - revised and previously published second-quarter 2018
(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          1.9      2.8        1.8           0.2           2.7
corporate          Previously published           -0.7          2.2      2.9        1.7           0.1           2.4
=========================================================================================================================


=========================================================================================================================
Table B1. Labor productivity growth and related measures - revised and previously published second-quarter 2018
(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                    3.0          5.0      2.0        1.9           0.3          -1.0
                   Previously published            2.9          5.0      2.0        1.9           0.2          -1.0
                        
Business                Revised                    3.6          5.1      1.5        2.4           0.7          -1.1
                   Previously published            3.6          5.1      1.5        2.3           0.6          -1.2
                        
Manufacturing           Revised                    1.2          2.6      1.4        1.3          -0.3           0.1
                   Previously published            1.5          3.0      1.5        1.3          -0.4          -0.2

 Durable                Revised                    0.3          2.0      1.7        1.1          -0.6           0.8
 manufacturing     Previously published            1.1          2.9      1.8        1.0          -0.6          -0.1
                        
 Nondurable             Revised                    2.4          3.3      0.8        1.7           0.0          -0.7
 manufacturing     Previously published            2.2          3.1      0.9        1.7           0.1          -0.4
=========================================================================================================================