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Productivity and Costs
Third Quarter 2024, Preliminary
Nonfarm business sector labor productivity increased 2.2 percent in the third quarter of 2024, the
U.S. Bureau of Labor Statistics reported today, as output increased 3.5 percent and hours worked
increased 1.2 percent. (All quarterly percent changes in this release are seasonally adjusted annualized
rates.) From the same quarter a year ago, nonfarm business sector labor productivity increased 2.0
percent in the third quarter of 2024. (See table A1.)
Unit labor costs in the nonfarm business sector increased 1.9 percent in the third quarter of 2024,
reflecting a 4.2-percent increase in hourly compensation and a 2.2-percent increase in productivity. Unit
labor costs increased 3.4 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 3.0 percent in the third
quarter of 2024, and increased 2.8 percent over the last four quarters.
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Historical Revisions
Data in this release reflect the 2024 Annual Update of the National Income and Product Accounts
(NIPA) released by the Bureau of Economic Analysis of the U.S. Department of Commerce on
September 26, 2024. See “Revised measures” section.
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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
annualized rate of 1.8 percent, reflecting a 2.5-percent rate of growth in output and a 0.7-percent rate of
growth in hours worked. The 1.8-percent annualized rate of productivity growth in the current business
cycle thus far is higher than the 1.5 percent rate of the previous business cycle from the fourth quarter of
2007 through the fourth quarter of 2019, and below the long-term rate of 2.1 percent since the first
quarter of 1947.
Manufacturing sector labor productivity increased 1.0 percent in the third quarter of 2024, as output
decreased 0.2 percent and hours worked decreased 1.2 percent. In the durable manufacturing sector,
productivity increased 0.8 percent, reflecting a 2.6-percent decrease in output and a 3.4-percent decrease
in hours worked. Nondurable manufacturing sector productivity decreased 0.3 percent, as output
increased 2.3 percent and hours worked increased 2.6 percent. Total manufacturing sector productivity
increased 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 5.3 percent in the third quarter of 2024,
reflecting a 6.4-percent increase in hourly compensation and a 1.0-percent increase in productivity.
Manufacturing unit labor costs increased 5.7 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.
Revised measures
Measures of output for the business, nonfarm business, and nonfinancial corporate sectors, and measures
of compensation for all sectors, incorporate revised National Income and Product Accounts (NIPA) data
released on September 26, 2024, by the Bureau of Economic Analysis (BEA), U.S. Department of
Commerce. As a result, all measures incorporating output, including labor productivity and unit labor
costs, were revised back to 2019 for the business, nonfarm business, and nonfinancial corporate sectors.
Source data on output and compensation released by BEA on October 30, 2024, are reflected in data for
the third quarter of 2024. Regular updates of source data on manufacturing output released in September
and October by the Board of Governors of the Federal Reserve System are reflected in data for the first
three quarters of 2024; there were no historical revisions to manufacturing output.
Hours worked and related measures for the business and nonfarm business sectors were subject to
revision back to 2018 due to revised NIPA data on government enterprises employment and on the
proportion of industry compensation paid to employees of nonprofit institutions. Hours worked and
related measures for the nonfinancial corporate sector were also subject to revision back to 2018 due to
the incorporation of revised NIPA data on the proportion of industry compensation paid to employees of
corporations.
Examining the period of revision from the first quarter of 2018 to the second quarter of 2024, output and
productivity were revised up, and the nonfarm business labor productivity index now outpaces the
previously published index. The annualized productivity growth rate during the revision period was
revised up from a rate of 1.7 percent to a rate of 1.9 percent. These revisions are also reflected in the 0.2-
percentage point upward revision to the nonfarm business labor productivity growth rate during the
current business cycle, from a previously published rate of 1.6 percent to a revised rate of 1.8 percent.
Table B1 presents revised and previous labor productivity and related measures for the nonfarm
business, business, and manufacturing sectors for the second quarter of 2024. Table A2 presents these
measures for the nonfinancial corporate sector.
Nonfarm business sector productivity in the second quarter of 2024 was revised down 0.4
percentage point to an increase of 2.1 percent. The revision comes from 0.5-percentage point and 0.1-
percentage point downward revisions to output and hours worked, respectively. Second-quarter unit
labor costs were revised up 2.0 percentage points to an increase of 2.4 percent, reflecting a 1.6-
percentage point upward revision to hourly compensation and the 0.4-percentage point downward
revision to productivity. Real hourly compensation in the second quarter of 2024 was also revised
upward by 1.6 percentage points, to an increase of 1.7 percent. (See table B1.)
Manufacturing sector productivity was revised down 1.0 percentage point to an increase of 0.3
percent in the second quarter of 2024, reflecting a 0.9-percentage point downward revision to output
and a 0.1-percentage point upward revision to hours worked. Productivity was revised down 1.2
percentage points in the durable manufacturing sector and revised down 0.6 percentage point in the
nondurable manufacturing sector. In the second quarter of 2024, total manufacturing unit labor costs
increased 5.8 percent rather than 3.6 percent as previously reported, reflecting a 1.3-percentage point
upward revision to hourly compensation as well as the 1.0-percentage point downward revision to
productivity. (See table B1.)
Nonfinancial corporate sector productivity increased 3.1 percent in the second quarter of 2024, rather
than the previously published estimate of a 0.3-percent decrease. This revision results from a 3.3-
percentage point upward revision to output and a 0.1-percentage point downward revision to hours
worked. Unit labor costs in the nonfinancial corporate sector were revised down 1.8 percentage points to
an increase of 1.3 percent in the second quarter of 2024, as hourly compensation was revised up 1.7
percentage points and productivity was revised up 3.4 percentage points. (See table A2.) Historical
revisions to output and hours in the nonfinancial corporate sector resulted in a 0.5-percentage point
upward revision to the annualized labor productivity growth rate during the current business cycle to 2.4
percent, just above the long-term rate of 2.3 percent since the start of 1947.
Annual averages
Table C1 presents annual data for the nonfarm business, total manufacturing, and nonfinancial corporate
sectors from 2021 to 2023. Annual average percent changes compare average annual indexes from one
year to the next.
Annual average productivity in the nonfarm business sector was revised up along with output in each
of the last 3 years. Productivity was revised up 0.2 percentage point to a 1.6-percent increase in 2023,
was revised up 0.4 percentage point to a decrease of 1.5 percent in 2022 and was revised up 0.3
percentage point to an increase of 2.0 percent in 2021. Unit labor costs were revised down 0.6
percentage point in both 2023 and 2022 and were revised down 0.2 percentage point in 2021. (See table
C1.)
From 2021 to 2023, annual average manufacturing sector productivity, output, and hours worked were
not revised. In both 2023 and 2022, unit labor costs were revised down 0.4 percentage point, and were
revised up 0.2 percentage point in 2021. (See table C1.)
In the nonfinancial corporate sector, productivity was revised down 1.4 percentage points to a 0.0
percent change in 2023. This stemmed from a 1.3-percentage point downward revision to output, and a
0.1-percentage point downward revision to hours worked. Unit labor costs were revised up 0.8
percentage point to an increase of 4.1 percent, reflecting a 0.6-percentage point downward revision to
hourly compensation and the 1.4 percentage point downward revision to productivity. In both 2022 and
2021, nonfinancial corporate sector labor productivity was revised up by 0.9 percentage point and 0.7
percentage point, respectively, reflecting upward revisions to output. (See tables C1 and 6.)
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/.
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The revised Productivity and Costs news release for third-quarter 2024 is scheduled to be released
on Tuesday, December 10, 2024, at 8:30 a.m. (ET).
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Table A1. Labor productivity growth and related measures – preliminary third-quarter 2024
(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 2.2 3.5 1.2 4.2 3.0 1.9
A year ago 2.0 2.8 0.7 5.5 2.8 3.4
Business Previous quarter 1.7 3.2 1.6 3.8 2.6 2.1
A year ago 2.0 2.8 0.8 5.4 2.7 3.4
Manufacturing Previous quarter 1.0 -0.2 -1.2 6.4 5.1 5.3
A Year ago 0.7 -0.2 -0.9 6.4 3.6 5.7
Durable Previous quarter 0.8 -2.6 -3.4 7.4 6.1 6.5
manufacturing A year ago 0.2 -1.3 -1.5 7.3 4.6 7.1
Nondurable Previous quarter -0.3 2.3 2.6 5.0 3.7 5.3
manufacturing A year ago 0.8 0.8 0.1 4.7 2.0 3.9
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Table A2. Labor productivity growth and related measures – revised and previously published second-quarter 2024
(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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Nonfinancial Revised 3.1 4.7 1.5 4.5 1.7 1.3
corporate Previously published -0.3 1.4 1.6 2.8 0.0 3.1
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Table B1. Labor productivity growth and related measures – revised and previously published second-quarter 2024
(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 2.1 3.0 0.9 4.6 1.7 2.4
Previously published 2.5 3.5 1.0 3.0 0.1 0.4
Business Revised 2.2 3.3 1.0 4.5 1.6 2.2
Previously published 2.2 3.4 1.1 2.9 0.0 0.6
Manufacturing Revised 0.3 1.5 1.2 6.2 3.3 5.8
Previously published 1.3 2.4 1.1 4.9 2.0 3.6
Durable Revised -0.8 0.6 1.4 5.5 2.6 6.4
manufacturing Previously published 0.4 1.7 1.3 4.4 1.6 4.0
Nondurable Revised 1.7 2.5 0.8 7.5 4.6 5.7
manufacturing Previously published 2.3 3.2 0.9 5.9 2.9 3.5
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Table C1. Labor productivity growth and related measures – revised and previous annual average changes: 2021-2023
Labor Hours Hourly Real hourly Unit labor
Sector Year productivity Output worked compensation compensation costs
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Nonfarm 2023 Revised 1.6 2.9 1.2 3.9 -0.2 2.2
business Previously published 1.4 2.6 1.2 4.2 0.1 2.8
2022 Revised -1.5 2.5 4.1 3.5 -4.2 5.1
Previously published -1.9 2.1 4.0 3.7 -4.1 5.7
2021 Revised 2.0 7.6 5.4 5.1 0.2 3.0
Previously published 1.7 7.2 5.5 4.9 0.1 3.2
Nonfinancial 2023 Revised 0.0 1.5 1.4 4.1 0.0 4.1
corporate Previously published 1.4 2.8 1.5 4.7 0.5 3.3
2022 Revised -0.1 4.1 4.2 4.1 -3.7 4.1
Previously published -1.0 3.1 4.2 4.1 -3.7 5.2
2021 Revised 4.4 9.7 5.1 4.9 0.1 0.5
Previously published 3.7 9.0 5.1 4.7 -0.1 1.0
Manufacturing 2023 Revised -0.5 -0.4 0.1 4.5 0.4 5.1
Previously published -0.5 -0.4 0.1 4.9 0.8 5.5
2022 Revised -1.3 2.7 4.0 3.2 -4.5 4.6
Previously published -1.3 2.7 4.0 3.6 -4.2 5.0
2021 Revised 1.6 4.9 3.2 2.6 -2.2 0.9
Previously published 1.6 4.9 3.2 2.3 -2.4 0.7
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United States Department of Labor
