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Productivity and Costs
Fourth Quarter and Annual Averages 2024, Revised
Nonfarm business sector labor productivity increased 1.5 percent in the fourth quarter of 2024, the
U.S. Bureau of Labor Statistics reported today, as output increased 2.4 percent and hours worked
increased 0.8 percent. (All quarterly percent changes in this release are seasonally adjusted annualized
rates.) From the same quarter a year ago, nonfarm business sector labor productivity increased 2.0
percent in the fourth quarter of 2024. Annual average productivity was revised up 0.4 percentage point
to an increase of 2.7 percent from 2023 to 2024. (See tables A1, C1, and 2.)
Unit labor costs in the nonfarm business sector increased 2.2 percent in the fourth quarter of 2024,
reflecting a 3.8-percent increase in hourly compensation and a 1.5-percent increase in productivity. Unit
labor costs increased 2.0 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 productivity tend to reduce them.
Real hourly compensation, which takes into account consumer prices, increased 0.7 percent in the fourth
quarter of 2024, and increased 1.2 percent over the last four quarters.
Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of
hours worked by all workers, including employees, proprietors, and unpaid family workers. During the
current business cycle, starting in the fourth quarter of 2019, labor productivity has grown at an
annualized rate of 1.9 percent, reflecting a 2.5-percent rate of growth in output and a 0.6-percent rate of
growth in hours worked. The 1.9-percent annualized rate of productivity growth in the current business
cycle thus far is higher than the 1.5-percent rate of the previous business cycle from the fourth quarter of
2007 through the fourth quarter of 2019, and is below the long-term rate of 2.1 percent since the first
quarter of 1947.
Manufacturing sector labor productivity increased 0.3 percent in the fourth quarter of 2024, as output
decreased 1.3 percent and hours worked decreased 1.6 percent. In the durable manufacturing sector,
productivity decreased 1.1 percent, reflecting a 3.2-percent decrease in output and a 2.1-percent decrease
in hours worked. Nondurable manufacturing sector productivity increased 1.4 percent, as output
increased 0.6 percent and hours worked decreased 0.8 percent. Total manufacturing sector productivity
increased 0.4 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)
Unit labor costs in the total manufacturing sector increased 3.7 percent in the fourth quarter of 2024,
reflecting a 4.0-percent increase in hourly compensation and a 0.3-percent increase in productivity.
Manufacturing unit labor costs increased 2.0 percent from the same quarter a year ago. (See tables A1
and 3.)
Manufacturing sector labor productivity has grown at an annualized rate of 0.3 percent during the
current business cycle, as output was unchanged (0.0 percent) and hours have declined 0.3 percent. The
0.3-percent annualized rate of productivity growth in the current business cycle thus far is above the 0.1-
percent rate of the previous business cycle from the fourth quarter of 2007 through the fourth quarter of
2019 and is below the long-term rate of 2.1 percent since the first quarter of 1987.
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
Third quarter, fourth quarter, and annual average data for 2024 were revised to incorporate regular
updates of source data on output and compensation published by the Department of Commerce on
February 27, 2025. Quarterly measures of real hourly compensation in 2024 were revised to reflect
updates to seasonally adjusted data from the BLS Consumer Price Index program released on February
12, 2025.
Quarterly and annual measures of hours worked and related measures--including productivity--were
revised historically for all major sectors. The revisions reflect incorporation of revised BLS Current
Employment Statistics (CES) program data for employment and hours of employees on nonfarm
payrolls. CES revisions extended back to 1990, and links from the current to the previous hours worked
methodology implied small revisions to the historical series. Revisions to employment and hours worked
from 2020 to 2024 also reflect revised seasonal adjustment of hours worked by nonfarm self-employed
and unpaid family workers, all farm workers, and employees of government enterprises. These
measures, based on source data from the BLS Current Population Survey (CPS), are seasonally adjusted
by the BLS Major Sector Productivity program. Because hours worked were revised for the index base
year of 2017, indexes of hours worked, productivity, and related measures were revised back to 1947.
Revised and previously published measures for the fourth quarter of 2024 are shown in table B1 for the
business, nonfarm business, and manufacturing sectors. In the fourth quarter of 2024, nonfarm
business productivity was revised up 0.3 percentage point to an increase of 1.5 percent. Output was
revised up 0.1 percentage point to an increase of 2.4 percent, and hours worked were revised down 0.2
percentage point to an increase of 0.8 percent. Unit labor costs increased 2.2 percent rather than
increasing 3.0 percent as previously reported, reflecting a 0.4-percentage point downward revision to
hourly compensation and a 0.3-percentage point upward revision to labor productivity.
Manufacturing productivity increased 0.3 percent in the fourth quarter of 2024 rather than increasing 0.8
percent as reported last release. This reflects a 0.3-percentage point downward revision to output and a
0.2-percentage point upward revision to hours worked. A 0.1-percentage point downward revision to
hourly compensation and the 0.5-percentage point downward revision to productivity produced a 0.4-
percentage point upward revision to unit labor costs, which increased 3.7 percent rather than 3.3 percent
as previously reported. Productivity was revised down by 0.1 percentage point in the durable
manufacturing sector and down by 0.8 percentage point in the nondurable manufacturing sector. (See
table B1.)
In the third quarter of 2024, nonfarm business productivity was revised up to an increase of 2.9 percent
due to a 0.6-percentage point downward revision to hours worked; output was not revised. Unit labor
costs decreased 1.5 percent rather than increasing 0.5 percent as previously reported, reflecting a 1.6-
percentage point downward revision to hourly compensation and the 0.6-percentage point upward
revision to productivity. The downward revision to hourly compensation results from a larger downward
revision to compensation (-2.1 percentage points) than to hours worked (-0.6 percentage point.)
Manufacturing sector productivity was revised up by 0.2 percentage point in the third quarter of 2024,
as durable manufacturing productivity was revised up by 0.1 percentage point and nondurable
manufacturing productivity was revised up by 0.5 percentage point. In the total manufacturing sector,
unit labor costs were revised up by 1.7 percentage points to an increase of 3.5 percent, reflecting a 3.3-
percentage point upward revision to durable manufacturing unit labor costs and a 1.4-percentage point
downward revision to nondurable manufacturing unit labor costs. (See table B2.)
Nonfinancial corporate sector productivity increased 2.5 percent in the third quarter of 2024 rather
than increasing 3.0 percent as previously reported, reflecting a 1.0-percentage point downward revision
to output and a 0.5-percentage point downward revision to hours worked. Unit labor costs were revised
down by 0.8 percentage point to a decrease of 1.2 percent. (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 was revised up 0.4
percentage point to an increase of 2.7 percent in 2024, and was revised up 0.2 percentage point to an
increase of 1.8 percent in 2023.
Unit labor costs in the nonfarm business sector were revised down 0.3 percentage point to an increase of
2.3 percent in 2024, now reflecting an increase of 5.1 percent in hourly compensation and an increase of
2.7 percent in productivity. Real hourly compensation, which accounts for changes in consumer prices,
increased 2.1 percent in 2024.
In the manufacturing sector, productivity increased 0.6 percent in 2024, reflecting decreases of 0.4
percent and 1.0 percent in output and hours worked, respectively.
Manufacturing unit labor costs increased 3.3 percent in 2024, as hourly compensation increased 4.0
percent and productivity increased 0.6 percent. This is a 0.2-percentage point upward revision to
manufacturing unit labor costs. Manufacturing real hourly compensation increased 1.0 percent.
Quarterly and annual data for all sectors from 2022 forward appear in tables 1-6. Full historical
measures can be found on the Productivity and Costs home page: www.bls.gov/productivity/tables/.
______________
The preliminary Productivity and Costs news release for first-quarter 2025 is scheduled to be
released on Thursday, May 8, 2025, at 8:30 a.m. (ET).
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Table A1. Labor productivity growth and related measures – revised fourth-quarter 2024
(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 2.4 0.8 3.8 0.7 2.2
A year ago 2.0 2.6 0.6 4.0 1.2 2.0
Business Previous quarter 2.0 2.4 0.3 4.4 1.3 2.3
A year ago 2.1 2.6 0.5 4.0 1.2 1.9
Manufacturing Previous quarter 0.3 -1.3 -1.6 4.0 1.0 3.7
A Year ago 0.4 -0.4 -0.7 2.3 -0.4 2.0
Durable Previous quarter -1.1 -3.2 -2.1 4.2 1.1 5.3
manufacturing A year ago 0.4 -1.5 -1.8 2.7 -0.1 2.3
Nondurable Previous quarter 1.4 0.6 -0.8 3.8 0.7 2.4
manufacturing A year ago -0.4 0.8 1.2 2.1 -0.7 2.4
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Table A2. Labor productivity growth and related measures – revised and previously published third-quarter 2024
(percent change from previous quarter at annual rate)
Labor Hours Hourly Real hourly Unit labor
Sector productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial Revised 2.5 2.9 0.4 1.3 -0.1 -1.2
corporate Previously published 3.0 3.9 0.9 2.6 1.3 -0.4
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Table B1. Labor productivity growth and related measures – revised and previously published fourth-quarter 2024
(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 2.4 0.8 3.8 0.7 2.2
Previously published 1.2 2.3 1.0 4.2 1.1 3.0
Business Revised 2.0 2.4 0.3 4.4 1.3 2.3
Previously published 1.7 2.2 0.5 4.8 1.6 3.0
Manufacturing Revised 0.3 -1.3 -1.6 4.0 1.0 3.7
Previously published 0.8 -1.0 -1.8 4.1 1.0 3.3
Durable Revised -1.1 -3.2 -2.1 4.2 1.1 5.3
manufacturing Previously published -1.0 -3.5 -2.5 4.6 1.4 5.7
Nondurable Revised 1.4 0.6 -0.8 3.8 0.7 2.4
manufacturing Previously published 2.2 1.6 -0.5 3.4 0.3 1.2
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Table B2. Labor productivity growth and related measures – revised and previously published third-quarter 2024
(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 2.9 3.6 0.7 1.3 -0.1 -1.5
Previously published 2.3 3.6 1.3 2.9 1.6 0.5
Business Revised 2.3 3.5 1.2 0.9 -0.5 -1.4
Previously published 1.9 3.5 1.6 2.5 1.3 0.6
Manufacturing Revised 0.7 -0.7 -1.4 4.2 2.7 3.5
Previously published 0.5 -0.8 -1.2 2.3 1.1 1.8
Durable Revised 0.6 -3.1 -3.6 6.1 4.7 5.5
manufacturing Previously published 0.5 -2.9 -3.4 2.8 1.5 2.2
Nondurable Revised -0.6 1.8 2.4 1.1 -0.3 1.7
manufacturing Previously published -1.1 1.6 2.7 1.9 0.7 3.1
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Table C1. Labor productivity growth and related measures – annual average changes: 2020-2024
Labor Hours Hourly Real hourly Unit labor
Sector Year productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business 2024 2.7 2.9 0.2 5.1 2.1 2.3
2023 1.8 2.9 1.0 4.1 0.0 2.2
2022 -1.5 2.5 4.1 3.5 -4.2 5.1
2021 2.0 7.6 5.5 5.0 0.2 3.0
2020 5.3 -2.7 -7.7 8.2 6.8 2.7
Manufacturing 2024 0.6 -0.4 -1.0 4.0 1.0 3.3
2023 -0.3 -0.4 0.0 4.7 0.6 5.1
2022 -1.3 2.7 4.0 3.2 -4.5 4.6
2021 1.7 5.0 3.2 2.6 -2.1 0.9
2020 0.1 -7.4 -7.5 6.8 5.4 6.7
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United States Department of Labor
