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Economic News Release
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Third Quarter 2023, Revised



Transmission of material in this release is embargoed until                                 USDL 23-2529
8:30 a.m. (ET) Wednesday, December 6, 2023

Technical information: (202) 691-5606  Productivity@bls.gov  www.bls.gov/productivity
Media contact:         (202) 691-5902  PressOffice@bls.gov

                                     PRODUCTIVITY AND COSTS
                                   Third Quarter 2023, Revised
                                             
Nonfarm business sector labor productivity increased 5.2 percent in the third quarter of 2023, the 
U.S. Bureau of Labor Statistics reported today, as output increased 6.1 percent and hours worked 
increased 0.9 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) 
The increase in labor productivity is the highest rate since the third quarter of 2020, when productivity 
increased 5.7 percent. From the same quarter a year ago, nonfarm business sector labor productivity 
increased 2.4 percent. (See table A1.)

Unit labor costs in the nonfarm business sector decreased 1.2 percent in the third quarter of 2023, 
reflecting a 3.9-percent increase in hourly compensation and a 5.2-percent increase in productivity. Unit 
labor costs increased 1.6 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 0.3 percent in the third 
quarter of 2023, and increased 0.4 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 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 annual 
rate of 1.5 percent, as output grew at a 2.2-percent per year rate, outpacing hours worked, which grew at 
a 0.7-percent annual rate. The 1.5-percent annual rate of productivity growth in the current business 
cycle thus far is the same rate as the previous business cycle from the fourth quarter of 2007 through 
fourth-quarter 2019, and is below the long-term rate since the first quarter of 1947 (2.1 percent).

Manufacturing sector labor productivity declined 0.8 percent in the third quarter of 2023, as output 
decreased 0.3 percent and hours worked increased 0.5 percent. In the durable manufacturing sector, 
productivity decreased 1.8 percent, reflecting a 1.6-percent increase in output and a 3.4-percent increase 
in hours worked. Nondurable manufacturing sector productivity increased 2.3 percent, as output 
decreased 2.1 percent and hours worked decreased 4.2 percent. Total manufacturing sector productivity 
decreased 0.7 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)

Unit labor costs in the total manufacturing sector increased 6.2 percent in the third quarter of 2023, 
reflecting a 5.4-percent increase in hourly compensation and a 0.8-percent decrease in productivity. 
Manufacturing unit labor costs increased 5.2 percent from the same quarter a year ago. (See tables A1 
and 3.)

Manufacturing sector labor productivity has increased at an annual rate of 0.1 percent during the current 
business cycle, which began in the fourth quarter of 2019. This rate reflects output and hours worked 
growing at annual rates of 0.2 percent and 0.1 percent, respectively. This slow productivity growth rate 
follows the 0.0-percent annual rate of growth during the last business cycle that spanned the fourth 
quarter of 2007 through fourth-quarter 2019, and is below the long-term rate since the first quarter of 
1987 of 2.1 percent.

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 third-quarter 2023 measures were announced today for the nonfinancial corporate 
sector. (See table A2.) Productivity increased 2.2 percent in the third quarter of 2023 as output and 
hours worked increased 3.1 percent and 0.8 percent, respectively. Productivity increased 1.2 percent in 
the nonfinancial corporate sector over the last four quarters. Unit profits of nonfinancial corporations 
increased 11.1 percent in the third quarter of 2023 and decreased 1.7 percent over the last four quarters. 
(See table 6.)

Revised measures        

Measures released today are based on more recent source data than were available for the preliminary 
report. Regular updates of source data from the BLS, the Bureau of Economic Analysis (BEA), and the 
Board of Governors of the Federal Reserve System are reflected in data for the second and third quarters 
of 2023. Measures of output for the manufacturing sectors incorporate revised annual benchmark data 
from 1987 to 2021 released November 21 by BLS. The most notable revisions to manufacturing output 
from the incorporation of these data occurred with several upward revisions in 2018 and 2019 of 
between 0.1 and 0.3 percentage point and several downward revisions in 2020 and 2021 of between 0.1 
and 0.3 percentage point.

Table B1 presents revised and previously published productivity and related measures for the nonfarm 
business, business, and manufacturing sectors for the third quarter of 2023.

In the third quarter of 2023, nonfarm business sector labor productivity increased 5.2 percent rather 
than the preliminary estimate of a 4.7-percent increase, reflecting a 0.2-percentage point upward revision 
to output and a 0.2-percentage point downward revision to hours worked. Unit labor costs were revised 
down 0.4 percentage point, reflecting a 0.5-percentage point upward revision to labor productivity; 
hourly compensation was not revised.

In the manufacturing sector, productivity decreased 0.8 percent rather than decreasing 0.7 percent as 
previously reported, reflecting a 0.2-percentage point downward revision to output and a 0.2-percentage 
point downward revision to hours worked. Durable manufacturing productivity decreased 1.8 percent 
rather than decreasing 1.4 percent as previously reported, and nondurable manufacturing productivity 
was revised up to an increase of 2.3 percent from the previously-reported increase of 2.1 percent. Total 
manufacturing unit labor costs were revised down 0.8 percentage point to an increase of 6.2 percent, the 
combined effect of a 0.8-percentage point downward revision to hourly compensation and a 0.1-
percentage point downward revision to productivity.

Table B2 shows revised and previously published productivity and related measures for the nonfarm 
business, business, manufacturing, and nonfinancial corporate sectors for the second quarter of 2023.

In the second quarter of 2023, labor productivity, output, and hours worked were unrevised for the 
nonfarm business sector. Unit labor costs increased 2.6 percent, rather than increasing 3.2 percent as 
previously reported, due to a 0.7-percentage point downward revision to hourly compensation. 

In the manufacturing sector, productivity was revised up 0.2 percentage point to an increase of 3.3 
percent. Unit labor costs were revised down to an increase of 4.7 percent from the previously-reported 
increase of 6.3 percent. This revision is mainly due to a 1.6-percentage point downward revision to 
hourly compensation.

In the nonfinancial corporate sector, productivity increased 2.2 percent rather than increasing 2.1 
percent as previously reported. Unit labor costs were not revised.

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/.
______________
The preliminary Productivity and Costs news release for fourth-quarter and annual averages 2023 
is scheduled to be released on Thursday, February 1, 2024, at 8:30 a.m. (ET). 

=========================================================================================================================
Calendar year 2024 release dates for Productivity and Costs news releases are now available at 
www.bls.gov/schedule/news_release/prod2.htm.
=========================================================================================================================


=========================================================================================================================
						Upcoming Method Change

Beginning with the Productivity and Costs news release scheduled for March 7, 2024, estimates of hours 
worked by self-employed workers and unpaid family workers will reflect a method change to reduce 
volatility of the estimates. Self-employed and unpaid family workers accounted for 7.4 percent of hours 
worked in the nonfarm business sector in 2022. The method change will remove statistically insignificant 
variability during seasonal adjustment of the Current Population Survey (CPS) source data.  In addition, 
volatility associated with respondent turnover will be reduced by adjusting respondent weights. These two 
adjustments by the BLS productivity program will dampen noise in the series without losing important 
information about cyclical changes in hours worked by self-employed and unpaid family workers. A more 
detailed discussion of the upcoming changes is forthcoming in the Monthly Labor Review in December 
2023.
=========================================================================================================================


=========================================================================================================================
Table A1. Labor productivity growth and related measures - revised third-quarter 2023
(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            5.2          6.1      0.9        3.9            0.3          -1.2
                        A year ago                  2.4          3.2      0.8        4.0            0.4           1.6
                                                   
Business                Previous quarter            5.2          6.0      0.8        4.0            0.4          -1.2
                        A year ago                  2.5          3.2      0.7        4.0            0.5           1.5
                        
Manufacturing           Previous quarter           -0.8         -0.3      0.5        5.4            1.8           6.2
                        A Year ago                 -0.7         -0.8     -0.1        4.4            0.9           5.2

 Durable                Previous quarter           -1.8          1.6      3.4        3.4           -0.2           5.3
 manufacturing          A year ago                 -0.8          0.2      1.0        3.8            0.2           4.6

 Nondurable             Previous quarter            2.3         -2.1     -4.2        8.8            5.0           6.4
 manufacturing          A year ago                  0.2         -1.9     -2.1        5.5            1.9           5.3
=========================================================================================================================

=========================================================================================================================
Table A2. Labor productivity growth and related measures  preliminary third-quarter 2023
(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               2.2          3.1      0.8        3.9            0.3           1.7
corporate            A year ago                     1.2          2.1      0.9        4.5            0.9           3.3
=========================================================================================================================

=========================================================================================================================
Table B1. Labor productivity growth and related measures  revised and previously published third-quarter 2023
(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                     5.2          6.1      0.9        3.9            0.3          -1.2
                   Previously published             4.7          5.9      1.1        3.9            0.3          -0.8
                        
Business                Revised                     5.2          6.0      0.8        4.0            0.4          -1.2
                   Previously published             4.7          5.7      1.0        4.0            0.4          -0.7
                        
Manufacturing           Revised                    -0.8         -0.3      0.5        5.4            1.8           6.2
                   Previously published            -0.7         -0.1      0.7        6.2            2.5           7.0

 Durable                Revised                    -1.8          1.6      3.4        3.4           -0.2           5.3
 manufacturing     Previously published            -1.4          2.3      3.8        4.2            0.6           5.7
                        
 Nondurable             Revised                     2.3         -2.1     -4.2        8.8            5.0           6.4
 manufacturing     Previously published             2.1         -2.4     -4.4        9.4            5.6           7.1
=========================================================================================================================

=========================================================================================================================
Table B2. Labor productivity growth and related measures  revised and previously published second-quarter 2023
(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                     3.6          2.0     -1.5        6.2            3.4           2.6
                   Previously published             3.6          2.0     -1.5        6.9            4.1           3.2
                        
Business                Revised                     3.4          2.0     -1.4        5.8            3.1           2.4
                   Previously published             3.4          2.0     -1.4        6.5            3.7           3.0
                        
Nonfinancial            Revised                     2.2          1.2     -0.9        7.2            4.4           4.9
corporate          Previously published             2.1          1.2     -0.9        7.1            4.3           4.9

Manufacturing           Revised                     3.3          1.1     -2.1        8.1            5.2           4.7
                   Previously published             3.1          1.0     -2.1        9.7            6.8           6.3
 Durable
 manufacturing          Revised                     5.2          4.0     -1.2        7.8            4.9           2.4
                   Previously published             5.4          4.2     -1.2       10.2            7.3           4.5
 Nondurable
 manufacturing          Revised                     2.0         -1.7     -3.6        8.4            5.6           6.3
                   Previously published             1.5         -2.1     -3.6        8.5            5.7           6.9
=========================================================================================================================
Last Modified Date: December 06, 2023