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




Transmission of material in this release is embargoed until                              USDL 20-1649
8:30 a.m. (ET) Thursday, September 3, 2020

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


                                  PRODUCTIVITY AND COSTS 
                              Second Quarter 2020, Revised

Nonfarm business sector labor productivity increased 10.1 percent in the second quarter of 2020, the 
U.S. Bureau of Labor Statistics reported today, as output decreased 37.1 percent and hours worked 
decreased 42.9 percent. (All quarterly percent changes in this release are seasonally adjusted annual 
rates, and show what the percent change would be if the quarterly rate continued for four quarters.) 

The 10.1-percent increase in nonfarm business sector labor productivity in the second quarter of 2020 is 
the largest quarterly increase since the first quarter of 1971, when output per hour increased 12.3 
percent. The declines in both output and hours worked in the second quarter of 2020 were the largest in 
these series, which begin with data for first-quarter 1947. From the second quarter of 2019 to the second 
quarter of 2020, productivity increased 2.8 percent, reflecting an 11.2-percent decrease in output and a 
13.6-percent decrease in hours worked. (See table A1.) 

Unit labor costs in the nonfarm business sector increased at an annual rate of 9.0 percent in the second 
quarter of 2020, as a 20.0-percent increase in hourly compensation outpaced the 10.1-percent increase in 
productivity. Unit labor costs increased 9.6 percent in the first quarter of 2020, and 4.9 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 
labor productivity tend to reduce unit labor costs. 

The 20.0-percent increase in hourly compensation in the second quarter of 2020 was the largest increase 
in the series which begins in 1947. Also, the labor share--defined as the percentage of current-dollar 
output that accrues to workers in the form of compensation--increased to 59.8 percent in the second 
quarter of 2020, the highest level since the fourth quarter of 2008 (60.1 percent). 

Manufacturing sector labor productivity decreased at a 14.6 percent annual rate in the second quarter 
of 2020, as output fell 47.0 percent and hours worked dropped 38.0 percent. These were the largest 
quarterly declines in each of these series, which begin with data for 1987. Total manufacturing sector 
productivity declined 3.7 percent over the last four quarters, as output decreased 15.7 percent and hours 
worked decreased 12.4 percent. For the second quarter of 2020, durable manufacturing saw a 26.9-
percent decrease in productivity, reflecting a 57.9-percent decrease in output and a 42.4-percent decrease 
in hours worked. Nondurable manufacturing saw a 5.1-percent decrease in productivity, as output 
decreased 33.5 percent and hours worked decreased 30.0 percent. (See tables A1, 3, 4, 5.) 

Unit labor costs in the total manufacturing sector increased 29.1 percent in the second quarter of 2020, 
and increased 8.9 percent from the same quarter a year ago. The increase in unit labor costs in the 
second quarter of 2020 was the largest increase in the series for total manufacturing, as were unit labor 
cost increases in the durable manufacturing and nondurable manufacturing sectors. (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. 

Nonfinancial corporate sector labor productivity increased at a 3.1-percent annual rate in the second 
quarter of 2020 as output fell 39.3 percent and hours worked fell 41.1 percent. Both the output and the 
hours worked declines were the largest in these series, which begin in 1947. Since the second quarter of 
2019, labor productivity in the nonfinancial corporate sector has increased 0.9 percent.

Revised measures

The measures released today are based on more recent source data than were available for the 
preliminary report. Table B1 presents previous and revised productivity and related measures for the 
nonfarm business, business, and manufacturing sectors. 

In the second quarter of 2020, nonfarm business sector productivity increased 10.1 percent--a 2.8-
percentage point upward revision from the preliminary estimate of 7.3 percent--mainly due to a 1.8-
percentage point upward revision to output. Unit labor costs increased 9.0 percent, a smaller increase 
than previously reported (12.2 percent). This downward revision is largely due to the 2.8-percentage 
point upward revision to productivity; the remaining revision comes from hourly compensation being 
revised down 0.4 percentage point, from a 20.4-percent increase to a 20.0-percent increase.

Manufacturing sector productivity for the second quarter of 2020 was revised up to a decrease of 14.6 
percent from a previously-reported decrease of 15.5 percent. Durable manufacturing productivity was 
also revised up, to a decline of 26.9 percent; nondurable manufacturing productivity was revised down 
slightly, to a decline of 5.1 percent. Total manufacturing unit labor costs increased 29.1 percent in the 
second quarter of 2020, rather than increasing 31.1 percent as previously reported.

Table B2 shows previous and revised labor productivity and related measures for the nonfarm business, 
business, manufacturing and nonfinancial corporate sectors for the first quarter of 2020.

In the first quarter of 2020, nonfarm business productivity was not revised. Unit labor costs were 
revised down slightly to an increase of 9.6 percent. Manufacturing sector productivity was revised up 
0.1-percentage point to an increase of 1.7 percent. Unit labor costs were revised down to an increase of 
4.2 percent. In the nonfinancial corporate sector, first-quarter 2020 productivity was revised down 0.1-
percentage point, to an increase of 0.2 percent. Unit profits were revised up 0.1-percentage point, to a 
decline of 44.1 percent. (See table 6.) 

Complete annual and quarterly 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 third-quarter 2020 is scheduled to be 
released on Thursday, November 5, 2020 at 8:30 a.m. (ET).

-------------------------------------------------------------------------------------------------------------------------
                   Coronavirus (COVID-19) Pandemic Impact on 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.

Given the continued rapid changes in the economy, BLS explored the possibility of adjusting second 
quarter (Q2) estimates. BLS compared several adjustment methods for Q2 and found that the economic 
movements between April and June tended to be offsetting, resulting in Q2 results that were similar to 
the usual methodology. Therefore no adjustments were made to Q2. For more information see 
www.bls.gov/covid19/productivity-and-costs-covid19-impacts-second-quarter-2020-preliminary.htm.
-------------------------------------------------------------------------------------------------------------------------


=========================================================================================================================
Table A1. Labor productivity growth and related measures  revised second-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          10.1         -37.1   -42.9       20.0            24.4         9.0
                         A year ago                 2.8         -11.2   -13.6        7.8             7.4         4.9
                         
Business                 Previous quarter           8.9         -37.2   -42.3       19.3            23.7         9.6
                         A year ago                 2.5         -11.1   -13.3        7.6             7.1         4.9
                         
Manufacturing            Previous quarter         -14.6         -47.0   -38.0       10.3            14.4        29.1
                         A year ago                -3.7         -15.7   -12.4        4.8             4.3         8.9
                         
Durable manufacturing    Previous quarter         -26.9         -57.9   -42.4        9.1            13.1        49.2
                         A year ago                -8.3         -21.5   -14.4        4.5             4.0        13.9
                         
Nondurable manufacturing Previous quarter          -5.1         -33.5   -30.0       14.6            18.8        20.7
                         A year ago                -0.4          -9.5    -9.1        6.0             5.5         6.4
=========================================================================================================================


=========================================================================================================================
Table A2. Labor productivity growth and related measures  preliminary second-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           3.1         -39.3   -41.1       27.1            31.7        23.3
                         A year ago                 0.9         -12.1   -12.9        9.0             8.5         7.9
=========================================================================================================================


=========================================================================================================================
Table B1. Labor productivity growth and related measures  revised and previously published second-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                   10.1         -37.1   -42.9       20.0            24.4         9.0
                         Previously published       7.3         -38.9   -43.0       20.4            24.8        12.2
                         
Business                 Revised                    8.9         -37.2   -42.3       19.3            23.7         9.6
                         Previously published       6.6         -38.7   -42.5       19.7            24.1        12.3
                         
Manufacturing            Revised                  -14.6         -47.0   -38.0       10.3            14.4        29.1
                         Previously published     -15.5         -47.0   -37.3       10.7            14.8        31.1
                         
Durable manufacturing    Revised                  -26.9         -57.9   -42.4        9.1            13.1        49.2
                         Previously published     -28.4         -58.1   -41.5        8.9            12.9        52.2
                         
Nondurable manufacturing Revised                   -5.1         -33.5   -30.0       14.6            18.8        20.7
                         Previously published      -4.9         -33.2   -29.8       16.0            20.3        22.0
=========================================================================================================================


=========================================================================================================================
Table B2. 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                   -0.3          -6.4    -6.1        9.2             7.9         9.6
                         Previously published      -0.3          -6.4    -6.1        9.4             8.1         9.8
                         
Business                 Revised                    0.0          -6.0    -6.0        9.0             7.7         9.0
                         Previously published       0.0          -6.0    -6.0        9.2             7.9         9.2
                         
Manufacturing            Revised                    1.7          -5.4    -7.0        6.0             4.7         4.2
                         Previously published       1.6          -5.6    -7.0        6.2             4.9         4.6
                         
Durable manufacturing    Revised                   -2.6          -9.8    -7.4        4.5             3.2         7.3
                         Previously published      -2.5          -9.7    -7.4        4.6             3.3         7.3
                         
Nondurable manufacturing Revised                    6.2          -0.6    -6.4        9.0             7.7         2.6
                         Previously published       5.8          -1.0    -6.4        9.6             8.3         3.6
                         
Nonfinancial corporate   Revised                    0.2          -4.0    -4.2        8.1             6.8         7.9
                         Previously published       0.3          -3.9    -4.2        8.4             7.1         8.0
=========================================================================================================================

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Last Modified Date: September 03, 2020