Productivity and Costs, Second Quarter 2017, Revised


Transmission of material in this release is embargoed until       USDL 17-1221                
8:30 a.m. (EDT) Thursday, September 7, 2017

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 2017, Revised
                                
Nonfarm business sector labor productivity increased 1.5 percent during the 
second quarter of 2017, the U.S. Bureau of Labor Statistics reported today, 
as output increased 4.0 percent and hours worked increased 2.5 percent. (All 
quarterly percent changes in this release are seasonally adjusted annual 
rates.) From the second quarter of 2016 to the second quarter of 2017, 
productivity increased 1.3 percent, reflecting a 2.8-percent increase in 
output and a 1.5-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 increased 0.2 percent in the 
second quarter of 2017, reflecting a 1.8-percent increase in hourly 
compensation and a 1.5-percent increase in productivity. Unit labor costs 
decreased 0.2 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 2.9 percent in the second 
quarter of 2017, as output increased 2.1 percent and hours worked decreased 
0.7 percent. The increase in manufacturing output per hour is the largest 
since the first quarter of 2012, when the measure increased 3.2 percent. 
Productivity increased 3.8 percent in the durable goods manufacturing sector 
and increased 0.5 percent in the nondurable goods sector in the second quarter 
of 2017. The larger productivity gain in durable goods industries was due 
primarily to a 2.7-percent decline in hours worked, as output increased 1.0 
percent. In contrast, the modest increase in nondurable manufacturing 
productivity reflected a 2.8-percent increase in hours worked and a 3.4-
percent increase in output. Over the last four quarters, total manufacturing 
sector productivity increased 1.1 percent, as output increased 1.6 percent and 
hours worked increased 0.5 percent. (See tables A1, 3, 4 and 5.)  Unit labor 
costs in manufacturing decreased 0.4 percent in the second quarter of 2017 and 
rose 0.1 percent from the same quarter a year ago. 

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 2017 measures of productivity and costs were 
announced for the nonfinancial corporate sector. Productivity increased 4.6 
percent in the second quarter of 2017, as output increased 7.8 percent, and 
hours worked increased 3.1 percent; the increase in output was the largest 
since a 9.9-percent gain in the first quarter of 2012. Unit labor costs 
decreased 2.6 percent, as  hourly compensation increased 1.9 percent and 
productivity increased 4.6 percent. (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 2017, nonfarm business productivity was revised up 
0.6 percentage point to an increase of 1.5 percent. Output was revised up to 
an increase of 4.0 percent; hours were not revised. Unit labor costs increased 
0.2 percent rather than increasing 0.6 percent as reported August 9, as a 
0.6-percentage point upward revision to productivity was slightly offset by 
a 0.2-percentage point upward revision to hourly compensation.

In the second quarter of 2017, manufacturing sector productivity was revised 
up to an increase of 2.9 percent from a previously-reported increase of 2.5 
percent. Unit labor costs decreased 0.4 percent, a slightly larger decline 
than previously reported. Durable goods manufacturing productivity was not 
revised, and nondurable goods manufacturing productivity was revised up to an 
increase of 0.5 percent. 

Table B2 shows previous and revised productivity and related measures for the 
nonfarm business, business, manufacturing and nonfinancial corporate sectors 
for the first quarter of 2017.

In the first quarter of 2017, nonfarm business productivity increased at the 
same 0.1-percent rate reported in the preliminary estimate. Unit labor costs 
were revised down 0.6 percentage point to an increase of 4.8 percent. 
Manufacturing sector productivity was revised down slightly to an increase of 
0.2 percent. Hourly compensation and unit labor costs had upward revisions of 
0.2 percentage point and 0.4 percentage point, respectively. 

In the nonfinancial corporate sector, first-quarter 2017 productivity 
increased at the same 2.0-percent rate that was previously reported. Unit 
labor costs were revised up slightly to an increase of 2.3 percent. (See table
B2.)

Hourly compensation and related measures, including unit labor costs, in the 
business and nonfarm business sectors were revised back to the first quarter 
of 2014 to incorporate revised data used in the estimation of employee 
compensation. In both sectors, annual average growth in unit labor costs was 
revised up 0.1 percentage point in 2016, revised down 0.1 percentage point in 
2015, and revised up 0.1 percentage point in 2014.

Full historical annual and quarterly measures can be found on the productivity 
and costs home page: www.bls.gov/lpc/#data.

______________  

==============================================================================
                Methodology change for manufacturing output
                
Beginning with the Productivity and Costs news release scheduled for December
6, 2017, BLS plans to incorporate source data reflecting a change in
methodology for estimating manufacturing output. For more information see: 
www.bls.gov/mfp/sectoraloutputrevisions.htm.
==============================================================================


The preliminary Productivity and Costs news release for third-quarter 2017 is  
scheduled to be released on Thursday, November 2, 2017 at 8:30 a.m. (EDT).






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Table A1. Labor productivity growth and related measures - revised second-quarter 2017
(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           1.5          4.0      2.5        1.8             2.1           0.2
                        A year ago                 1.3          2.8      1.5        1.1            -0.8          -0.2
                        
Business                Previous quarter           1.3          3.7      2.4        1.8             2.1           0.5
                        A year ago                 1.3          2.6      1.3        1.3            -0.6           0.0
                        
Manufacturing           Previous quarter           2.9          2.1     -0.7        2.5             2.8          -0.4
                        A Year ago                 1.1          1.6      0.5        1.3            -0.6           0.1
 
 Durable                Previous quarter           3.8          1.0     -2.7        3.1             3.5          -0.6
 manufacturing          A year ago                 1.3          1.6      0.3        0.9            -1.0          -0.4
                 
 Nondurable             Previous quarter           0.5          3.4      2.8        1.6             1.9           1.0
 manufacturing          A year ago                 0.8          1.5      0.8        1.9             0.0           1.1
=========================================================================================================================
Table A2. Labor productivity growth and related measures - preliminary second-quarter 2017
(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         Previous quarter              4.6          7.8      3.1        1.9             2.2          -2.6
corporate            A year ago                    1.9          3.7      1.8        1.1            -0.8          -0.8
=========================================================================================================================
Table B1. Labor productivity growth and related measures - revised and previously published second-quarter 2017
(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              1.5          4.0      2.5        1.8             2.1           0.2
                        Previously published       0.9          3.4      2.5        1.6             1.9           0.6
                        
Business                      Revised              1.3          3.7      2.4        1.8             2.1           0.5
                        Previously published       0.6          3.1      2.4        1.6             1.9           0.9
                        
Manufacturing                 Revised              2.9          2.1     -0.7        2.5             2.8          -0.4
                        Previously published       2.5          1.6     -0.9        2.2             2.5          -0.3

 Durable                      Revised              3.8          1.0     -2.7        3.1             3.5          -0.6
 manufacturing          Previously published       3.8          0.9     -2.7        3.0             3.3          -0.8
                        
 Nondurable                   Revised              0.5          3.4      2.8        1.6             1.9           1.0
 manufacturing          Previously published      -0.1          2.3      2.4        1.1             1.4           1.2
=========================================================================================================================
Table B2. Labor productivity growth and related measures - revised and previously published first-quarter 2017
(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              0.1          1.8      1.6        4.9             1.7           4.8
                        Previously published       0.1          1.8      1.6        5.5             2.3           5.4
                        
Business                      Revised             -0.8          1.4      2.1        4.3             1.1           5.1
                        Previously published      -0.8          1.4      2.1        4.9             1.7           5.7
                        
Manufacturing                 Revised              0.2          2.3      2.1        4.4             1.2           4.3
                        Previously published       0.3          2.4      2.1        4.2             1.0           3.9
 
 Durable                      Revised             -1.0          2.6      3.6        2.5            -0.6           3.6
 manufacturing          Previously published      -0.9          2.7      3.6        2.3            -0.9           3.2
              
 Nondurable                   Revised              2.5          2.0     -0.5        8.0             4.7           5.3
 manufacturing          Previously published       2.6          2.1     -0.5        7.8             4.5           5.1

Nonfinancial                  Revised              2.0          4.1      2.0        4.3             1.1           2.3
corporate               Previously published       2.0          4.0      2.0        4.2             1.0           2.2
=========================================================================================================================

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Last Modified Date: September 07, 2017