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Economic News Release
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Fourth Quarter and Annual Averages 2022, Revised



Transmission of material in this release is embargoed until                                 USDL 23-0398
8:30 a.m. (ET) Thursday, March 2, 2023

Technical information: (202) 691-5606  Productivity@bls.gov  www.bls.gov/productivity
Media contact:         (202) 691-5902  PressOffice@bls.gov     
                                        
                                        PRODUCTIVITY AND COSTS 
                        Fourth Quarter and Annual Averages 2022, Revised

Nonfarm business sector labor productivity increased 1.7 percent in the fourth quarter of 2022, the 
U.S. Bureau of Labor Statistics reported today, as output increased 3.1 percent and hours worked 
increased 1.4 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) 
This 1.7-percent increase in labor productivity for the fourth quarter of 2022 is 1.3 percentage points 
below the preliminary estimate of a 3.0-percent increase. From the same quarter a year ago, nonfarm 
business sector labor productivity decreased 1.8 percent, reflecting a 0.7-percent increase in output and a 
2.6-percent increase in hours worked. (See table A1.) Annual average productivity decreased 1.7 percent 
from 2021 to 2022. This is the largest annual decline in the measure since 1974, when productivity also 
decreased 1.7 percent. (See table C1.) 

Unit labor costs in the nonfarm business sector increased 3.2 percent in the fourth quarter of 2022, 
reflecting a 4.9-percent increase in hourly compensation and a 1.7-percent increase in productivity. Unit 
labor costs increased 6.3 percent over the last four quarters. (See tables A1 and 2.)

=========================================================================================================================
			Historical Revisions to Productivity and Costs Data

Data in this release incorporate the annual benchmark revision of BLS Current Employment Statistics 
program data on employment and hours of employees on nonfarm payrolls. Data also include revisions 
to employment and hours of all other business sector workers that reflect updated seasonal adjustment of 
those data by the BLS Major Sector Productivity program. See Revised measures.
=========================================================================================================================

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, and declined 2.4 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 persons, including employees, proprietors, and unpaid family workers. The fourth 
quarter of 2022 is the second consecutive quarter in which both output and labor productivity increased, 
following decreases in the first two quarters of the year. Labor productivity has grown at an annualized 
rate of 1.4 percent since the last business cycle peak in the fourth quarter of 2019--the last quarter before 
the COVID-19 pandemic and ensuing recession--reflecting a 2.1-percent rate of growth in output and a 
0.7-percent rate of growth in hours worked over that three-year period.

Manufacturing sector labor productivity decreased 2.7 percent in the fourth quarter of 2022, as output 
decreased 3.0 percent and hours worked decreased 0.4 percent. In the durable manufacturing sector, 
productivity decreased 3.1 percent, with a 3.5-percent decrease in output and a 0.4-percent decrease in 
hours worked. Nondurable manufacturing sector productivity decreased 2.2 percent, as output decreased 
2.5 percent and hours worked decreased 0.3 percent. Total manufacturing sector productivity decreased 
1.9 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)

Unit labor costs in the total manufacturing sector increased 7.7 percent in the fourth quarter of 2022, 
reflecting a 4.8-percent increase in hourly compensation and a 2.7-percent decrease in productivity. 
Manufacturing unit labor costs increased 6.3 percent from the same quarter a year ago. (See tables A1 
and 3.)

Labor productivity in the manufacturing sector has grown at an annualized rate of 0.6 percent since the 
fourth quarter of 2019, reflecting a 0.8-percent rate of growth in output and a 0.2-percent rate of growth 
in hours worked.

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 2022 were revised to incorporate regular 
updates of source data on output and compensation published by the Department of Commerce on 
February 23, 2023. Quarterly measures of real hourly compensation in 2022 were revised to reflect 
updates to seasonally adjusted data from the BLS Consumer Price Index program released on February 
14. 

Quarterly and annual measures of hours worked, productivity, and related series were revised 
historically for all major sectors. From 2018 to 2022, the revisions reflect incorporation of revised BLS 
Current Employment Statistics (CES) program data for employment and hours of employees on nonfarm 
payrolls. Notable revisions in those data reflect upward revisions due to both the benchmarking of CES 
employment to the Quarterly Census of Employment and Wages in March 2022--which is wedged in 
over the prior 12 months--and the incorporation of actual business births and deaths during this period. 
From 1990 to 2022, revisions reflect reconstruction of employment for two industries by CES based on a 
correction to the coding of some establishments within these two industries. Revisions to employment 
and hours worked by all workers from 2018 to 2022 also reflect revised seasonal adjustment of hours 
worked by nonfarm proprietors 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 2012, all measures incorporating hours worked--including 
productivity--were subject to revision back to 1947.

Revised and previous measures for the fourth quarter of 2022 are shown in table B1 for the business, 
nonfarm business, and manufacturing sectors. In the fourth quarter of 2022, nonfarm business 
productivity increased 1.7 percent--a 1.3-percentage point downward revision from the preliminary 
estimate of a 3.0-percent increase. This reflects a 0.4-percentage point downward revision to output and 
a 0.9-percentage point upward revision to hours worked. Unit labor costs increased 3.2 percent rather 
than increasing 1.1 percent as previously reported, reflecting a 1.3-percentage point downward revision 
to productivity and a 0.8-percentage point upward revision to hourly compensation.

Manufacturing productivity decreased 2.7 percent in the fourth quarter of 2022 rather than decreasing 
1.5 percent as reported on February 2. This reflects a 0.4-percentage point downward revision to output 
and a 0.7-percentage point upward revision to hours worked. A 1.6-percentage point upward revision to 
hourly compensation and the 1.2-percentage point downward revision to productivity both contributed 
to an upward revision to unit labor costs, which increased 7.7 percent rather than 4.8 percent as 
previously reported. Productivity was revised down by 1.4 percentage points and 0.8 percentage point in 
the durable and nondurable manufacturing sectors, respectively. (See table B1.)

In the third quarter of 2022, nonfarm business productivity was revised down to an increase of 1.2 
percent due to an upward revision in hours worked; output was not revised. Unit labor costs increased 
6.9 percent rather than 2.0 percent as previously reported, reflecting a 4.8-percentage point upward 
revision to hourly compensation and the 0.2-percentage point downward revision to productivity. Total 
manufacturing sector productivity was revised down by 0.4 percentage point as durable manufacturing 
productivity was revised up by 0.3 percentage point and nondurable manufacturing productivity was 
revised down by 1.5 percentage points. In the total manufacturing sector, unit labor costs were revised 
up by 5.6 percentage points to an increase of 12.1 percent, reflecting upward revisions to unit labor costs 
in both the durable and nondurable manufacturing sectors. (See table B2.)

Nonfinancial corporate sector productivity increased 0.6 percent in the third quarter of 2022 rather 
than decreasing 1.6 percent as previously reported, primarily reflecting a 2.4-percentage point upward 
revision to output. Unit labor costs were revised up by 1.8 percentage points to an increase of 7.1 
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 decreased 1.7 percent in 
2022, as the 4.0-percent increase in hours worked outpaced the 2.3-percent increase in output. The 1.7-
percent decrease in labor productivity in 2022 is the largest annual decrease in the measure since 1974 
when the measure decreased by the same amount. These are also the largest declines in the annual 
series, which begins in 1948.

Unit labor costs in the nonfarm business sector increased 6.5 percent in 2022, reflecting an increase of 
4.7 percent in hourly compensation and a decrease of 1.7 percent in productivity. This is the largest 
annual increase in unit labor costs since 1982, when the measure increased 8.2 percent. Real hourly 
compensation, which takes into account changes in consumer prices, decreased 2.8 percent in 2022. This 
is the largest annual decline in real hourly compensation since the series began in 1948.

In the manufacturing sector, productivity decreased 1.0 percent in 2022, as an increase in output of 3.1 
percent was outpaced by an increase in hours worked of 4.2 percent. The annual increase of 4.2 percent 
in hours worked is the largest increase in the series, which begins in 1988.

Manufacturing unit labor costs increased 5.2 percent in 2022, with hourly compensation increasing 4.1 
percent. Real hourly compensation in the manufacturing sector decreased 3.3 percent in 2022, the largest 
decline since the series began in 1988. 

Quarterly and annual data for all sectors from 2020 to 2022 appear in tables 1-6. Full historical 
measures can be found on the Productivity and Costs website: www.bls.gov/productivity/tables.
______________
The preliminary Productivity and Costs news release for first-quarter 2023 is scheduled to be 
released on Thursday, May 4, 2023, at 8:30 a.m. (ET). 

=========================================================================================================================
Table A1. Labor productivity growth and related measures  revised fourth-quarter 2022
(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            1.7          3.1      1.4         4.9            0.7         3.2
                        A year ago                 -1.8          0.7      2.6         4.4           -2.4         6.3

Business                Previous quarter            2.0          3.0      1.0         5.3            1.1         3.3
                        A year ago                 -1.8          0.6      2.5         4.5           -2.3         6.4

Manufacturing           Previous quarter           -2.7         -3.0     -0.4         4.8            0.6         7.7
                        A Year ago                 -1.9          0.7      2.7         4.3           -2.4         6.3

 Durable                Previous quarter           -3.1         -3.5     -0.4         4.0           -0.1         7.4
 manufacturing          A year ago                 -1.9          1.9      3.9         3.7           -3.0         5.8

 Nondurable             Previous quarter           -2.2         -2.5     -0.3         6.2            2.0         8.6
 manufacturing          A year ago                 -1.1         -0.5      0.6         5.1           -1.7         6.3
=========================================================================================================================

=========================================================================================================================
Table A2. Labor productivity growth and related measures  revised and previously published third-quarter 2022 
(percent change from previous quarter at annual rate)


                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                                          productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------       
Nonfinancial             Revised                    0.6          4.3      3.6         7.7            2.1         7.1
corporate          Previously published            -1.6          1.9      3.5         3.6           -2.0         5.3
=========================================================================================================================

=========================================================================================================================
Table B1. Labor productivity growth and related measures  revised and previously published fourth-quarter 2022
(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                     1.7          3.1      1.4         4.9            0.7         3.2
                   Previously published             3.0          3.5      0.5         4.1            1.0         1.1
                        
Business                Revised                     2.0          3.0      1.0         5.3            1.1         3.3
                   Previously published             3.2          3.3      0.1         4.5            1.4         1.3
                        
Manufacturing           Revised                    -2.7         -3.0     -0.4         4.8            0.6         7.7
                   Previously published            -1.5         -2.6     -1.1         3.2            0.1         4.8

 Durable                Revised                    -3.1         -3.5     -0.4         4.0           -0.1         7.4
 manufacturing     Previously published            -1.7         -2.9     -1.2         2.4           -0.8         4.1
                        
 Nondurable             Revised                    -2.2         -2.5     -0.3         6.2            2.0         8.6
 manufacturing     Previously published            -1.4         -2.3     -0.9         5.0            1.8         6.5
=========================================================================================================================

=========================================================================================================================
Table B2. Labor productivity growth and related measures  revised and previously published third-quarter 2022
(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                     1.2          3.6      2.4         8.2            2.5         6.9
                   Previously published             1.4          3.6      2.3         3.4           -2.2         2.0
                        
Business                Revised                     1.0          3.5      2.5         8.0            2.3         7.0
                   Previously published             1.1          3.5      2.4         3.2           -2.3         2.0
                        
Manufacturing           Revised                    -3.9         -0.8      3.2         7.7            2.0        12.1
                   Previously published            -3.5         -0.2      3.5         2.7           -2.8         6.5
                                                                
 Durable                Revised                    -4.7          0.9      5.9         7.7            2.0        13.0
 manufacturing     Previously published            -5.0          1.7      7.0         2.2           -3.3         7.5
                        
 Nondurable             Revised                    -1.6         -2.6     -1.1         7.1            1.4         8.8
 manufacturing     Previously published            -0.1         -2.1     -2.1         2.9           -2.7         2.9
=========================================================================================================================

=========================================================================================================================
Table C1. Labor productivity growth and related measures  annual average changes: 2018-2022


                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                  Year                    productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business        2022                       -1.7          2.3      4.0         4.7           -2.8         6.5
                        2021                        2.2          7.8      5.5         4.7            0.0         2.4
                        2020                        4.5         -3.5     -7.6         8.1            6.8         3.5
                        2019                        2.0          2.7      0.7         3.8            2.0         1.8
                        2018                        1.4          3.5      2.0         3.4            0.9         1.9
                        
Manufacturing           2022                       -1.0          3.1      4.2         4.1           -3.3         5.2
                        2021                        2.6          5.8      3.2         2.7           -1.9         0.1
                        2020                        0.9         -6.6     -7.4         7.0            5.7         6.1
                        2019                       -2.4         -2.3      0.2         2.4            0.5         4.9
                        2018                        0.2          2.0      1.8         2.3           -0.1         2.1
=========================================================================================================================
Last Modified Date: March 02, 2023