Transmission of material in this release is embargoed until USDL 18-1411
8:30 a.m. (EDT) Thursday, September 6, 2018
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 2018, Revised
Nonfarm business sector labor productivity increased 2.9 percent during the second quarter of 2018,
the U.S. Bureau of Labor Statistics reported today, as output increased 5.0 percent and hours worked
increased 2.0 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.)
From the second quarter of 2017 to the second quarter of 2018, productivity increased 1.3 percent,
reflecting a 3.5-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 decreased 1.0 percent in the second quarter of 2018,
reflecting a 1.9-percent increase in hourly compensation and a 2.9-percent increase in labor productivity.
Unit labor costs increased 1.9 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 1.5 percent in the second quarter of 2018, as
output increased 3.0 percent and hours worked increased 1.5 percent. Productivity increased 1.1 percent
in the durable manufacturing sector, as output rose 2.9 percent and hours worked increased 1.8 percent.
In the non-durable goods manufacturing sector, a 2.2-percent increase in productivity reflected a 3.1-
percent increase in output and a 0.9-percent increase in hours worked. Over the last four quarters, total
manufacturing sector productivity was unchanged, as output increased 2.1 percent and hours worked
increased 2.2 percent. Unit labor costs in manufacturing declined 0.2 percent in the second quarter of
2018 and increased 2.5 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 second-quarter 2018 measures of productivity and costs were announced for the
nonfinancial corporate sector. Labor productivity decreased 0.7 percent in the second quarter of
2018, as output increased 2.2 percent and hours worked increased 2.9 percent. Unit labor costs
increased 2.4 percent, as hourly compensation increased 1.7 percent and productivity decreased 0.7
percent. Unit profits increased at a 19.4-percent annual rate in the second quarter of 2018. (See tables
A2 and 6.)
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 2018, nonfarm business productivity increased 2.9 percent--the same as the
preliminary estimate; there were small upward revisions to both output and hours worked. The increase
in productivity was the largest quarterly gain since the first quarter of 2015 (3.1%), and reflected a
5.0-percent increase in output--the largest since the third quarter of 2014 (6.4%). Unit labor costs
decreased 1.0 percent in the second quarter of 2018, a slightly larger decline than previously reported,
and the largest since the third quarter of 2014 (-1.5%).
In the second quarter of 2018, manufacturing sector productivity was revised up to an increase of 1.5
percent from a previously-reported increase of 0.9 percent. Unit labor costs decreased 0.2 percent,
rather than increasing 0.6 percent as previously reported. Productivity, output, and hours worked were
all revised up in both durable goods manufacturing and nondurable goods manufacturing; unit labor
costs were revised down.
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 2018.
In the first quarter of 2018, nonfarm business productivity increased at the same 0.3-percent rate
reported previously. Unit labor costs were also unrevised, and increased 3.4 percent. Manufacturing
sector productivity was revised up slightly to a decrease of 0.8 percent. Unit labor costs increased at
the same 5.5-percent rate reported on August 15, reflecting offsetting 0.2-percentage point upward
revisions to both hourly compensation and productivity.
In the nonfinancial corporate sector, first-quarter 2018 productivity increased at the same 3.0-percent
rate that was previously reported. Unit profits were not revised and increased 5.5 percent. (See tables B2
and 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 2018 is scheduled to be
released on Thursday, November 1, 2018 at 8:30 a.m. (EDT)
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Table A1. Labor productivity growth and related measures – revised second-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 2.9 5.0 2.0 1.9 0.2 -1.0
A year ago 1.3 3.5 2.2 3.2 0.5 1.9
Business Previous quarter 3.6 5.1 1.5 2.3 0.6 -1.2
A year ago 1.4 3.5 2.0 3.3 0.7 1.9
Manufacturing Previous quarter 1.5 3.0 1.5 1.3 -0.4 -0.2
A year ago 0.0 2.1 2.2 2.5 -0.2 2.5
Durable manufacturing Previous quarter 1.1 2.9 1.8 1.0 -0.6 -0.1
A year ago 0.3 2.5 2.2 2.9 0.2 2.6
Nondurable manufacturing Previous quarter 2.2 3.1 0.9 1.7 0.1 -0.4
A year ago -0.3 1.8 2.1 1.7 -0.9 2.0
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Table A2. Labor productivity growth and related measures – preliminary second-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
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial corporate Previous quarter -0.7 2.2 2.9 1.7 0.1 2.4
A year ago 1.2 3.5 2.3 2.3 -0.4 1.1
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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 2.9 5.0 2.0 1.9 0.2 -1.0
Previously published 2.9 4.8 1.9 2.0 0.3 -0.9
Business Revised 3.6 5.1 1.5 2.3 0.6 -1.2
Previously published 3.6 5.0 1.3 2.4 0.8 -1.1
Manufacturing Revised 1.5 3.0 1.5 1.3 -0.4 -0.2
Previously published 0.9 1.9 1.0 1.5 -0.1 0.6
Durable manufacturing Revised 1.1 2.9 1.8 1.0 -0.6 -0.1
Previously published 0.9 2.4 1.4 1.3 -0.3 0.4
Nondurable manufacturing Revised 2.2 3.1 0.9 1.7 0.1 -0.4
Previously published 1.1 1.5 0.4 1.9 0.2 0.8
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Table B2. Labor productivity growth and related measures – revised and previously published first-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 0.3 2.6 2.3 3.8 0.2 3.4
Previously published 0.3 2.6 2.3 3.7 0.2 3.4
Business Revised 0.6 2.5 1.9 4.3 0.8 3.7
Previously published 0.6 2.5 1.9 4.3 0.7 3.7
Manufacturing Revised -0.8 2.0 2.9 4.6 1.1 5.5
Previously published -1.0 1.9 2.9 4.4 0.9 5.5
Durable manufacturing Revised 0.2 4.2 4.0 5.8 2.2 5.6
Previously published 0.1 4.1 4.0 5.6 2.0 5.5
Nondurable manufacturing Revised -1.2 -0.2 1.0 2.0 -1.5 3.2
Previously published -1.4 -0.5 1.0 2.0 -1.5 3.4
Nonfinancial corporate Revised 3.0 5.3 2.2 4.4 0.8 1.4
Previously published 3.0 5.3 2.2 4.4 0.9 1.4
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