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).
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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.
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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
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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
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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
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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
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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
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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
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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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United States Department of Labor
