Productivity and Costs, First Quarter 2017, Preliminary



Transmission of material in this release is embargoed until     USDL 17-0550                          
8:30 a.m. (EDT) Thursday, May 4, 2017

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




                        PRODUCTIVITY AND COSTS
                   First Quarter 2017, Preliminary
                
Nonfarm business sector labor productivity decreased at a 0.6-percent annual 
rate during the first quarter of 2017, the U.S. Bureau of Labor Statistics 
reported today, as output increased 1.0 percent and hours worked increased 1.6 
percent. (All quarterly percent changes in this release are seasonally 
adjusted annual rates.) From the first quarter of 2016 to the first quarter
of 2017, productivity increased 1.1 percent, reflecting increases in output
and hours worked of 2.4 percent and 1.3 percent, respectively. (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 3.0 percent in the 
first quarter of 2017, reflecting a 2.4-percent increase in hourly 
compensation and a 0.6-percent decline in productivity. Unit labor costs 
increased 2.8 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 0.4 percent in the first 
quarter of 2017, as output increased 2.8 percent and hours worked increased 
2.4 percent. Output per hour decreased 1.1 percent in the durable goods 
manufacturing sector and increased 3.2 percent in the nondurable goods sector. 
Over the last four quarters, manufacturing sector productivity increased 0.3 
percent, as output increased 0.9 percent and hours worked increased 0.7 
percent. (See tables A1, 3, 4,  and 5.)  Unit labor costs in manufacturing 
increased 2.1 percent in the first quarter of 2017 and rose 4.3 percent from 
the same quarter a year ago. 

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 2016 measures were announced today for 
the nonfinancial corporate sector. Productivity decreased 1.0 percent in the 
fourth quarter of 2016 and increased 1.4 percent over the last four quarters. 
Annual average productivity increased 0.6 percent from 2015 to 2016. The 
historical average annual rate of productivity growth in the nonfinancial 
corporate sector between 1947 and 2016 is 2.2 percent. (See tables A2, C1, and 
6.)

Revised measures

Hours and related measures, including productivity, were revised back to 1990 
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 1979 forward, due to incorporation of new 
and revised data from the BLS Office of Prices and Living Conditions. Output 
data for the manufacturing sector, which begins in 1987, incorporate 
historically revised indexes of industrial production published by the Board 
of Governors of the Federal Reserve System on March 31, 2017. 

In the fourth quarter of 2016, nonfarm business sector productivity increased 
1.8 percent--a larger increase than reported March 8--reflecting an upward 
revision to output. Unit labor costs increased 1.3 percent, a smaller increase 
than previously reported. Total manufacturing sector productivity increased 
2.0 percent in the fourth quarter of 2016, the same as previously reported. 
Unit labor costs in the manufacturing sector increased 2.2 percent during the 
fourth quarter. Fourth-quarter 2016 labor productivity was revised up 0.3 
percentage point in the durable goods sector to an increase of 1.8 percent, 
and was revised down 0.4 percentage point in the nondurable goods sector to an 
increase of 2.3 percent. (See table B1.) The annual average rate of 
manufacturing productivity growth for 2016 was revised down slightly from 0.3 
percent to 0.2 percent, and the rate for 2015 was revised down from 0.2 
percent to negative 0.6 percent. (See table 3.) The average annual rate of 
productivity growth in the manufacturing sector from 1987 to 2016 was 
unchanged at 3.2 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 2017 is 
scheduled to be released on Monday, June 5, 2017 at 8:30 a.m. (EDT).



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Table A1. Labor productivity growth and related measures  preliminary first-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
-------------------------------------------------------------------------------------------------------------------------
Nonfarm Business        Previous quarter         -0.6           1.0      1.6         2.4           -0.8          3.0
                        A year ago                1.1           2.4      1.3         3.9            1.3          2.8
                        
Business                Previous quarter         -1.5           0.5      2.1         1.8           -1.3          3.4
                        A year ago                1.0           2.3      1.2         3.9            1.3          2.9
                        
Manufacturing           Previous quarter          0.4           2.8      2.4         2.5           -0.6          2.1
                        A Year ago                0.3           0.9      0.7         4.6            2.0          4.3
 
 Durable                Previous quarter         -1.1           2.8      4.0         1.4           -1.7          2.5
 Manufacturing          A year ago                0.8           1.5      0.7         4.8            2.2          4.0
                                                   
 Nondurable             Previous quarter          3.2           2.8     -0.4         4.6            1.4          1.3
 Manufacturing          A year ago               -0.4           0.3      0.7         4.2            1.6          4.6
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Table A2. Labor productivity growth and related measures  preliminary fourth-quarter 2016              
(percent change from previous quarter at annual rate)
                        
                
                                                Labor                   Hours    Hourly         Real hourly    Unit labor
 Sector             Percent change from:        productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------               
 Nonfinancial       Previous quarter             -1.0          -0.3      0.6        3.3             0.2          4.3
 Corporations       A year ago                    1.4           2.4      1.0        2.8             1.0          1.4     
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Table B1. Labor productivity growth and related measures  revised fourth-quarter 2016
(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                  1.8           2.7      1.0         3.1            0.0          1.3
                   Previously published           1.3           2.4      1.0         3.0           -0.4          1.7
                        
Business                 Revised                  2.4           2.6      0.2         4.0            0.9          1.5
                   Previously published           2.0           2.3      0.3         3.9            0.4          1.9
                        
Manufacturing            Revised                  2.0           1.8     -0.2         4.2            1.2          2.2
                   Previously published           2.0           1.6     -0.4         4.4            0.9          2.4
 
 Durable                 Revised                  1.8           2.0      0.2         4.0            0.9          2.1
 Manufacturing     Previously published           1.5           1.4     -0.1         4.2            0.7          2.6
 
 Nondurable              Revised                  2.3           1.5     -0.8         4.6            1.5          2.3
 Manufacturing     Previously published           2.7           1.7     -1.0         4.8            1.3          2.0
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Table C1. Labor productivity growth and related measures  annual average changes: 2012-2016


                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                  Year                    productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial            2016                      0.6           2.1      1.5         2.2            0.9          1.6
Corporations            2015                      0.8           3.0      2.2         2.9            2.8          2.2
                        2014                      0.3           3.0      2.7         2.5            0.8          2.2    
                        2013                      0.2           2.3      2.0         1.3           -0.1          1.1
                        2012                      1.0           3.4      2.4         2.8            0.7          1.8
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Last Modified Date: May 04, 2017