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Economic News Release
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Productivity and Costs, First Quarter 2022, Preliminary



Transmission of material in this release is embargoed until                                 USDL 22-0786
8:30 a.m. (ET) Thursday, May 5, 2022

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

                                           PRODUCTIVITY AND COSTS 
                                      First Quarter 2022, Preliminary
                                   
Nonfarm business sector labor productivity decreased 7.5 percent in the first quarter of 2022, the U.S. 
Bureau of Labor Statistics reported today, as output decreased 2.4 percent and hours worked increased 
5.5 percent. This is the largest decline in quarterly productivity since the third quarter of 1947, when the 
measure decreased 11.7 percent. (All quarterly percent changes in this release are seasonally adjusted 
annual rates.) From the same quarter a year ago, nonfarm business sector labor productivity decreased 
0.6 percent, reflecting a 4.2-percent increase in output that was outpaced by a 4.8-percent increase in 
hours worked. This is the largest four-quarter decline since the fourth quarter of 1993, when the measure 
also declined 0.6 percent. (See table A1.) 

Unit labor costs in the nonfarm business sector increased 11.6 percent in the first quarter of 2022, 
reflecting a 3.2-percent increase in hourly compensation and a 7.5-percent decrease in productivity. Unit 
labor costs increased 7.2 percent over the last four quarters. (See table A1.) This is the largest four-
quarter increase in this measure since an 8.2-percent increase in the third quarter of 1982. 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.

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. In the first 
quarter of 2022, while hours worked surpassed its fourth quarter 2019 level for the first time, output saw 
its first quarterly decrease since the historic declines in those measures in the second quarter of 2020.  
The hours worked index is now 0.9 percent above its fourth quarter 2019 level, the last quarter not 
affected by the COVID-19 pandemic. The first-quarter 2022 output index is 3.5 percent above the level 
seen in the fourth quarter of 2019. The labor productivity index is 2.6 percent higher in first-quarter 
2022 than in fourth-quarter 2019, corresponding to an annual labor productivity growth rate of 1.1 
percent during that period. (See tables A1 and 2.)

Manufacturing sector labor productivity increased 0.7 percent in the first quarter of 2022, as output 
increased 5.7 percent and hours worked increased 5.1 percent. In the durable manufacturing sector, 
productivity increased 1.4 percent, with a 7.9-percent increase in output and a 6.4-percent increase in 
hours worked. Nondurable manufacturing sector productivity increased 0.5 percent, with a 3.4-percent 
increase in output and a 2.9-percent increase in hours worked. Total manufacturing sector productivity 
increased 1.7 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)

Manufacturing sector output is now 3.3 percent above its level in the fourth quarter of 2019, the last 
quarter not affected by the COVID-19 pandemic. Hours worked in manufacturing remain 1.0 percent 
below the fourth-quarter 2019 level. The manufacturing labor productivity index is 4.3 percent higher in 
first-quarter 2022 than in fourth-quarter 2019, corresponding to an annual labor productivity growth rate 
of 1.9 percent during that period. This rate is much higher than the 0.2-percent average annual growth 
rate during the previous business cycle, from 2007 to 2019.

Unit labor costs in the total manufacturing sector increased 2.1 percent in the first quarter of 2022, 
reflecting a 2.8-percent increase in hourly compensation and a 0.7-percent increase in productivity. 
Manufacturing unit labor costs increased 1.8 percent from the same quarter a year ago. (See tables A1 
and 3.)

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 fourth-quarter and annual 2021 measures were announced today for the nonfinancial 
corporate sector. Productivity remained unchanged in the fourth quarter of 2021 compared to the 
previous quarter, as both output and hours worked increased 3.9 percent. From the fourth quarter of 
2020 to the fourth quarter of 2021, nonfinancial corporate sector productivity increased 1.6 percent.

Table C1 presents annual average changes for the most recent 5 years for the nonfinancial corporate 
sector.  Nonfinancial corporate sector productivity grew 4.5 percent in 2021, as output increased 9.6 
percent and hours worked increased 4.9 percent. This is the largest annual increase in productivity for 
the nonfinancial corporate sector since 1959, when the measure increased 4.9 percent (See tables A2, 
C1, and 6.)

Revised measures        

Hours and related measures for all sectors were revised to incorporate updated ratios of hours worked to 
hours paid by detailed industry, provided by the BLS National Compensation Survey. Indexes were 
subject to revision back to 2017; resulting revisions to percent changes were small. Measures of real 
hourly compensation for all sectors also were revised from 2017 forward due to the incorporation of the 
revised Consumer Price Index Retroactive Series. Measures of output for the manufacturing sectors 
incorporate revised annual benchmark data from 1987 to 2020 released March 24 by BLS.

Table B1 presents previous and revised productivity and related measures for the business, nonfarm 
business, and manufacturing sectors for the fourth quarter of 2021.

In the fourth quarter of 2021, nonfarm business sector productivity was revised down 0.3 percentage 
point to an increase of 6.3 percent, reflecting a 0.1-percentage point downward revision to output and a 
0.1-percentage point upward revision to hours worked. Nonfarm business unit labor costs were revised 
up 0.1 percentage point to an increase of 1.0 percent. Total manufacturing sector productivity was 
revised down 0.5 percentage point to a decrease of 0.6 percent in the fourth quarter of 2021, reflecting a 
0.4-percentage point downward revision to output and a 0.3-percentage point upward revision to hours 
worked. Unit labor costs in the manufacturing sector were revised up 0.3 percentage point to an increase 
of 1.7 percent during the fourth quarter of 2021. Labor productivity was revised down 1.0 percentage 
point in the durable manufacturing sector to an increase of 1.8 percent, and was also revised down 0.1 
percentage point in the nondurable manufacturing sector to a decrease of 4.1 percent. (See table B1.)

Annual average rates of productivity growth in the nonfarm business and manufacturing sectors were 
not revised for 2021, and remain at 1.9 percent and 3.2 percent, respectively. (See tables 2 and 3.)

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/data-overview.htm.
______________
The revised Productivity and Costs news release for first-quarter 2022 is scheduled to be released 
on Thursday, June 2, 2022 at 8:30 a.m. (ET).


=========================================================================================================================
Table A1. Labor productivity growth and related measures - preliminary first-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           -7.5         -2.4      5.5        3.2           -5.5           11.6
                        A year ago                 -0.6          4.2      4.8        6.5           -1.4            7.2
                        
Business                Previous quarter           -7.7         -2.3      5.8        3.0           -5.7           11.6
                        A year ago                 -0.6          4.0      4.6        6.7           -1.2            7.3

Manufacturing           Previous quarter            0.7          5.7      5.1        2.8           -5.9            2.1
                        A Year ago                  1.7          5.2      3.5        3.5           -4.2            1.8

 Durable                Previous quarter            1.4          7.9      6.4        1.9           -6.7            0.5
 manufacturing          A year ago                  2.1          5.2      3.0        1.4           -6.1           -0.8

 Nondurable             Previous quarter            0.5          3.4      2.9        4.2           -4.5            3.7
 manufacturing          A year ago                  0.9          5.2      4.2        7.6           -0.4            6.6
=========================================================================================================================


=========================================================================================================================
Table A2. Labor productivity growth and related measures - preliminary fourth-quarter 2021
(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               0.0          3.9      3.9        8.0            0.1            8.0
corporate            A year ago                     1.6          6.3      4.6        6.1           -0.6            4.4
=========================================================================================================================


=========================================================================================================================
Table B1. Labor productivity growth and related measures - revised fourth-quarter 2021
(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                     6.3          9.0      2.5        7.4           -0.5            1.0
                   Previously published             6.6          9.1      2.4        7.5           -0.3            0.9
                        
Business                Revised                     6.3          8.9      2.4        7.6           -0.3            1.2
                   Previously published             6.6          9.0      2.3        7.7           -0.2            1.0
                        
Manufacturing           Revised                    -0.6          5.4      6.1        1.1           -6.4            1.7
                   Previously published            -0.1          5.8      5.8        1.3           -6.1            1.4

 Durable                Revised                     1.8          6.2      4.3       -0.9           -8.2           -2.7
 manufacturing     Previously published             2.8          6.9      4.0       -0.6           -7.9           -3.3
                        
 Nondurable             Revised                    -4.1          4.5      9.0        5.0           -2.7            9.5
 manufacturing     Previously published            -4.0          4.5      8.8        5.1           -2.6            9.4
=========================================================================================================================


=========================================================================================================================
Table C1. Labor productivity growth and related measures - annual average changes: 2017-2021

                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                  Year                    productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial            2021                        4.5          9.6      4.9        5.2            0.5            0.7
corporate               2020                        2.2         -4.2     -6.2        6.9            5.5            4.6
                        2019                        1.4          2.3      0.9        3.9            2.1            2.5
                        2018                        1.2          3.2      1.9        3.6            1.1            2.3
                        2017                        1.4          2.8      1.4        3.6            1.5            2.2
=========================================================================================================================
Last Modified Date: May 05, 2022