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PRODUCTIVITY AND COSTS
Fourth Quarter and Annual Averages 2024, Preliminary
Nonfarm business sector labor productivity increased 1.2 percent in the fourth quarter of 2024, the
U.S. Bureau of Labor Statistics reported today, as output increased 2.3 percent and hours worked
increased 1.0 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 1.6
percent in the fourth quarter of 2024. (See table A1.) Annual average productivity increased 2.3
percent from 2023 to 2024. (See table C1.)
Unit labor costs in the nonfarm business sector increased 3.0 percent in the fourth quarter of 2024,
reflecting a 4.2-percent increase in hourly compensation and a 1.2-percent increase in productivity. Unit
labor costs increased 2.7 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 1.1 percent in the fourth
quarter of 2024, and increased 1.5 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 1.8 percent, reflecting a 2.5-percent rate of growth in output and a 0.7-percent rate of
growth in hours worked. The 1.8-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 0.8 percent in the fourth quarter of 2024, as output
decreased 1.0 percent and hours worked decreased 1.8 percent. In the durable manufacturing sector,
productivity decreased 1.0 percent, reflecting a 3.5-percent decrease in output and a 2.5-percent decrease
in hours worked. Nondurable manufacturing sector productivity increased 2.2 percent, as output
increased 1.6 percent and hours worked decreased 0.5 percent. Total manufacturing sector productivity
increased 0.2 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)
Unit labor costs in the total manufacturing sector increased 3.3 percent in the fourth quarter of 2024,
reflecting a 4.1-percent increase in hourly compensation and a 0.8-percent increase in productivity.
Manufacturing unit labor costs increased 1.5 percent from the same quarter a year ago. (See tables A1
and 3.)
Manufacturing sector labor productivity has grown at an annualized rate of 0.2 percent during the
current business cycle, as output was unchanged (0.0 percent) and hours have declined 0.2 percent. The
0.2-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
Table B1 presents previous and revised productivity and related measures for the business, nonfarm
business, and manufacturing sectors for the third quarter of 2024. Table A2 presents these measures for
the nonfinancial corporate sector.
Nonfarm business sector productivity in the third quarter of 2024 increased 2.3 percent rather than
the previous estimate of a 2.2-percent increase, reflecting a 0.1-percentage point upward revision to
output and a 0.1-percentage point upward revision to hours worked. Unit labor costs were revised down
0.3 percentage point, reflecting a 0.1-percentage point upward revision to labor productivity, and a 0.2-
percentage point downward revision to hourly compensation.
Manufacturing sector productivity was revised down 0.4 percentage point to an increase of 0.5
percent in the third quarter of 2024, reflecting a 0.4-percentage point downward revision to output and
a 0.1-percentage point upward revision to hours worked. Productivity was revised down 0.2 percentage
point in the durable manufacturing sector and revised down 0.5 percentage point in the nondurable
manufacturing sector. (See table B1.)
In the nonfinancial corporate sector, productivity was revised down 0.4 percentage point in the third
quarter of 2024 to an increase of 3.0 percent. This revision reflects a 0.3-percentage point downward
revision to output and a 0.1-percentage point upward revision to hours worked. (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 increased 2.3 percent in
2024, as output increased 2.9 percent and hours worked increased 0.6 percent.
Unit labor costs in the nonfarm business sector increased 2.6 percent in 2024, reflecting an increase of
5.0 percent in hourly compensation and an increase of 2.3 percent in productivity. Real hourly
compensation, which takes into account changes in consumer prices, increased 2.0 percent in 2024.
In the manufacturing sector, productivity increased 0.3 percent in 2024, reflecting a decrease in output
of 0.4 percent and a decrease in hours worked of 0.7 percent.
Manufacturing unit labor costs increased 3.1 percent in 2024, as hourly compensation increased 3.4
percent and productivity increased 0.3 percent. Manufacturing real hourly compensation increased 0.5
percent in 2024.
Quarterly and annual data for all sectors for recent years appear in tables 1-6. Full historical annual and
quarterly measures can be found at www.bls.gov/productivity/tables/.
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The revised Productivity and Costs news release for fourth-quarter and annual averages 2024 is scheduled to be
released on Thursday, March 6, 2025, at 8:30 a.m. (ET).
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Upcoming Revisions
Data in this release do not reflect the annual benchmark revision of the BLS Current Employment
Statistics program data to be released February 7, 2025. This benchmark will be incorporated in the next
release on March 6, 2025.
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Table A1. Labor productivity growth and related measures – preliminary 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
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Nonfarm business Previous quarter 1.2 2.3 1.0 4.2 1.1 3.0
A year ago 1.6 2.6 0.9 4.3 1.5 2.7
Business Previous quarter 1.7 2.2 0.5 4.8 1.6 3.0
A year ago 1.7 2.6 0.9 4.3 1.6 2.6
Manufacturing Previous quarter 0.8 -1.0 -1.8 4.1 1.0 3.3
A Year ago 0.2 -0.3 -0.5 1.7 -1.0 1.5
Durable Previous quarter -1.0 -3.5 -2.5 4.6 1.4 5.7
manufacturing A year ago -0.2 -1.6 -1.4 1.4 -1.3 1.6
Nondurable Previous quarter 2.2 1.6 -0.5 3.4 0.3 1.2
manufacturing A year ago 0.0 1.0 1.0 2.5 -0.2 2.5
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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 3.0 3.9 0.9 2.6 1.3 -0.4
corporate Previously published 3.4 4.2 0.8 2.7 1.5 -0.6
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Table B1. 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
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Nonfarm business Revised 2.3 3.6 1.3 2.9 1.6 0.5
Previously published 2.2 3.5 1.2 3.1 1.8 0.8
Business Revised 1.9 3.5 1.6 2.5 1.3 0.6
Previously published 1.7 3.2 1.5 2.7 1.5 1.0
Manufacturing Revised 0.5 -0.8 -1.2 2.3 1.1 1.8
Previously published 0.9 -0.4 -1.3 2.6 1.4 1.7
Durable Revised 0.5 -2.9 -3.4 2.8 1.5 2.2
manufacturing Previously published 0.7 -2.8 -3.5 3.0 1.8 2.3
Nondurable Revised -1.1 1.6 2.7 1.9 0.7 3.1
manufacturing Previously published -0.6 2.2 2.8 2.3 1.1 2.9
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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
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Nonfarm business 2024 2.3 2.9 0.6 5.0 2.0 2.6
2023 1.6 2.9 1.2 3.9 -0.2 2.2
2022 -1.5 2.5 4.1 3.5 -4.2 5.1
2021 2.0 7.6 5.4 5.1 0.2 3.0
2020 5.4 -2.7 -7.7 8.2 6.8 2.7
Manufacturing 2024 0.3 -0.4 -0.7 3.4 0.5 3.1
2023 -0.5 -0.4 0.1 4.5 0.4 5.1
2022 -1.3 2.7 4.0 3.2 -4.5 4.6
2021 1.7 5.0 3.2 2.6 -2.2 0.9
2020 0.1 -7.4 -7.4 6.8 5.4 6.7
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United States Department of Labor
