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Economic News Release
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Fourth Quarter and Annual Averages 2023, Revised



Transmission of material in this release is embargoed until                                 USDL 24-0450
8:30 a.m. (ET) Thursday, March 7, 2024

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

                                     PRODUCTIVITY AND COSTS
                       Fourth Quarter and Annual Averages 2023, Revised

Nonfarm business sector labor productivity increased 3.2 percent in the fourth quarter of 2023, the 
U.S. Bureau of Labor Statistics reported today, as output increased 3.5 percent and hours worked 
increased 0.3 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 increased 2.6 percent. (See 
table A1.) Annual average productivity increased 1.3 percent from 2022 to 2023. (See table C1.) 

Unit labor costs in the nonfarm business sector increased 0.4 percent in the fourth quarter of 2023, 
reflecting a 3.6-percent increase in hourly compensation and a 3.2-percent increase in productivity. Unit 
labor costs increased 2.5 percent over the last four quarters. (See tables A1 and 2.) 

=========================================================================================================================
                Historical Revisions to Productivity and Costs Data and Method Change
                
Data in this release incorporate the annual benchmark revision of BLS Current Employment Statistics 
program data on employment and hours of employees on nonfarm payrolls. Data also include revisions 
to employment and hours of all other business sector workers that reflect updated seasonal adjustment of 
those data by the BLS Major Sector Productivity program. Additionally, data reflect an improved estimation
method for hours worked by self-employed and unpaid family workers. See Revised measures section.
=========================================================================================================================

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 0.8 percent in the fourth 
quarter of 2023, and increased 1.8 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. 

Manufacturing sector labor productivity increased 1.3 percent in the fourth quarter of 2023, as output 
decreased 2.0 percent and hours worked decreased 3.3 percent. The 3.3-percent decrease in hours 
worked is the largest decline since the historic decline in the second quarter of 2020. In the durable 
manufacturing sector, productivity decreased 1.0 percent, reflecting a 4.0-percent decrease in output and 
a 3.0-percent decrease in hours worked. Nondurable manufacturing sector productivity increased 3.8 
percent as hours worked decreased 3.6 percent; output was unchanged from the previous quarter. Total 
manufacturing sector productivity increased 0.5 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 fourth quarter of 2023, 
reflecting a 6.7-percent increase in hourly compensation and a 1.3-percent increase in productivity. 
Manufacturing unit labor costs increased 6.1 percent from the same quarter a year ago, reflecting an 
increase of 0.5 percent in labor productivity and an increase of 6.6 percent in hourly compensation. Real 
hourly compensation increased 3.3 percent from the same quarter a year ago. The four-quarter increases 
to hourly compensation and real hourly compensation are the largest since the third and fourth quarters 
of 2020, respectively. (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        

Beginning with this news release, estimates of hours worked by self-employed workers and unpaid 
family workers reflect a method change to reduce volatility of the estimates. This method change 
removes statistically insignificant variability during seasonal adjustment of the Current Population 
Survey (CPS) source data. In addition, volatility associated with respondent turnover is 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 changes is available in the 
Monthly Labor Review at www.bls.gov/opub/mlr/2023/article/an-improved-estimate-of-self-
employment-hours.htm.

Third quarter, fourth quarter, and annual average data for 2023 were revised to incorporate regular 
updates of source data on output and compensation published by the Department of Commerce on 
February 28, 2024. Quarterly measures of real hourly compensation in 2023 were revised to reflect 
updates to seasonally adjusted data from the BLS Consumer Price Index program released on February 
13, 2024. 

Quarterly and annual measures of hours worked, productivity, and related series were revised 
historically for all major sectors. From 2018 to 2023, the revisions reflect incorporation of revised BLS 
Current Employment Statistics (CES) program data for employment and hours of employees on nonfarm 
payrolls. Revisions to employment and hours worked from 2000 to 2023 reflect the productivity 
program method improvement to hours worked by self-employed and unpaid family workers as well as 
revised seasonal adjustment of hours worked by nonfarm self-employed and unpaid family workers, all 
farm workers, and employees of government enterprises. These measures, based on source data from the 
BLS Current Population Survey (CPS), are seasonally adjusted by the BLS Major Sector Productivity 
program. Because hours worked were revised for the index base year of 2017, all measures 
incorporating hours worked--including productivity--were subject to revision back to 1947. 

Revised and previous measures for the fourth quarter of 2023 are shown in table B1 for the business, 
nonfarm business, and manufacturing sectors. In the fourth quarter of 2023, nonfarm business 
productivity was not revised and increased 3.2 percent as reported last release. Output was revised down 
0.2 percentage point to an increase of 3.5 percent, and hours worked were revised down 0.1 percentage 
point to an increase of 0.3 percent. Unit labor costs increased 0.4 percent rather than increasing 0.5 
percent as previously reported, reflecting a 0.1-percentage point downward revision to hourly 
compensation.

Manufacturing productivity increased 1.3 percent in the fourth quarter of 2023 rather than increasing 2.3 
percent as reported last release. This reflects a 0.4-percentage point upward revision to output and a 1.3-
percentage point upward revision to hours worked. A 0.1-percentage point upward revision to hourly 
compensation and the 1.0-percentage point downward revision to productivity produced a 1.1-
percentage point upward revision to unit labor costs, which increased 5.3 percent rather than 4.2 percent 
as previously reported. Productivity was revised down by 2.4 percentage points in the durable 
manufacturing sector and up by 1.3 percentage points in the nondurable manufacturing sector. (See table 
B1.)

In the third quarter of 2023, nonfarm business productivity was revised down to an increase of 4.7 
percent due to a 0.1-percentage point upward revision to hours worked; output was not revised. Unit 
labor costs increased 0.1 percent rather than decreasing 1.1 percent as previously reported, reflecting a 
1.0-percentage point upward revision to hourly compensation and the 0.2-percentage point downward 
revision to productivity. Total manufacturing sector productivity was revised down by 0.4 percentage 
point as durable manufacturing productivity was revised down by 0.9 percentage point and nondurable 
manufacturing productivity was revised up by 0.1 percentage point. In the total manufacturing sector, 
unit labor costs were revised up by 2.7 percentage points to an increase of 9.0 percent, reflecting a 5.3-
percentage point upward revision to durable manufacturing unit labor costs and a 2.0-percentage point 
downward revision to nondurable manufacturing unit labor costs. (See table B2.) 

Nonfinancial corporate sector productivity increased 3.2 percent in the third quarter of 2023 rather 
than increasing 2.5 percent as previously reported, primarily reflecting a 0.6-percentage point upward 
revision to output. Unit labor costs were revised up by 0.4 percentage point to an increase of 1.6 percent.  
(See table A2.)

Annual averages

Table C1 presents annual average changes for the most recent 5 years for the nonfarm business sector 
and the total manufacturing sector. Nonfarm business sector productivity increased 1.3 percent in 
2023, as output increased 2.6 percent and hours worked increased 1.3 percent. This is a 0.1-percentage 
point upward revision from the preliminary estimate of labor productivity growth. 

Unit labor costs in the nonfarm business sector were revised up 0.1 percentage point to an increase of 
3.0 percent in 2023, reflecting an increase of 4.3 percent in hourly compensation and an increase of 1.3 
percent in productivity. Real hourly compensation, which takes into account changes in consumer 
prices, increased 0.1 percent in 2023. This is the first time since 2020 that annual real hourly 
compensation in the nonfarm business sector has increased. 

In the manufacturing sector, productivity decreased 0.8 percent in 2023, reflecting a decrease in output 
of 0.6 percent and an increase in hours worked of 0.2 percent.

Manufacturing unit labor costs increased 5.9 percent in 2023, as hourly compensation increased 5.1 
percent while productivity decreased 0.8 percent. This is a 0.4-percentage point upward revision to 
manufacturing unit labor costs. Manufacturing real hourly compensation increased 0.9 percent.

Quarterly and annual data for all sectors from 2021 forward appear in tables 1-6. Full historical 
measures can be found on the Productivity and Costs home page: www.bls.gov/productivity/tables/.
______________
The preliminary Productivity and Costs news release for first-quarter 2024 is scheduled to be 
released on Thursday, May 2, 2024, at 8:30 a.m. (ET). 




=========================================================================================================================
Table A1. Labor productivity growth and related measures - revised fourth-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            3.2          3.5      0.3        3.6            0.8           0.4
                        A year ago                  2.6          3.2      0.6        5.1            1.8           2.5
                        
Business                Previous quarter            3.3          3.5      0.2        3.7            1.0           0.4
                        A year ago                  2.6          3.3      0.7        5.1            1.7           2.4
                        
Manufacturing           Previous quarter            1.3         -2.0     -3.3        6.7            3.9           5.3
                        A Year ago                  0.5         -0.5     -1.0        6.6            3.3           6.1

 Durable                Previous quarter           -1.0         -4.0     -3.0        9.5            6.6          10.6
 manufacturing          A year ago                 -0.4         -0.3      0.1        7.7            4.3           8.1

 Nondurable             Previous quarter            3.8          0.0     -3.6        1.2           -1.5          -2.5
 manufacturing          A year ago                  2.2         -0.7     -2.8        4.3            1.0           2.1
=========================================================================================================================


=========================================================================================================================
Table A2. 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
-------------------------------------------------------------------------------------------------------------------------       
Nonfinancial             Revised                    3.2          3.9      0.7         4.9           1.4           1.6
corporate          Previously published             2.5          3.3      0.8         3.7           0.1           1.2
=========================================================================================================================


=========================================================================================================================
Table B1. Labor productivity growth and related measures - revised and previously published fourth-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                     3.2          3.5      0.3         3.6           0.8           0.4
                   Previously published             3.2          3.7      0.4         3.7           0.9           0.5
                        
Business                Revised                     3.3          3.5      0.2         3.7           1.0           0.4
                   Previously published             3.3          3.5      0.2         4.0           1.2           0.6
                                                                                              
Manufacturing           Revised                     1.3         -2.0     -3.3         6.7           3.9           5.3
                   Previously published             2.3         -2.4     -4.6         6.6           3.8           4.2

 Durable                Revised                    -1.0         -4.0     -3.0         9.5           6.6          10.6
 manufacturing     Previously published             1.4         -4.4     -5.7         9.0           6.0           7.4
                        
 Nondurable             Revised                     3.8          0.0     -3.6         1.2          -1.5          -2.5
 manufacturing     Previously published             2.5         -0.3     -2.7         2.5          -0.2           0.0
=========================================================================================================================


=========================================================================================================================
Table B2. 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                     4.7          5.8      1.0         4.8           1.3           0.1
                   Previously published             4.9          5.8      0.9         3.8           0.2          -1.1
                        
Business                Revised                     4.6          5.6      1.0         4.7           1.3           0.2
                   Previously published             4.8          5.6      0.7         3.9           0.3          -0.9
                        
Manufacturing           Revised                    -1.2         -0.7      0.5         7.7           4.1           9.0
                   Previously published            -0.8         -0.3      0.5         5.5           1.8           6.3

 Durable                Revised                    -2.9          0.8      3.8         7.7           4.1          10.9
 manufacturing     Previously published            -2.0          1.4      3.4         3.5          -0.1           5.6
                        
 Nondurable             Revised                     2.7         -2.2     -4.8         6.8           3.3           4.0
 manufacturing     Previously published             2.6         -1.9     -4.4         8.7           5.0           6.0
=========================================================================================================================


=========================================================================================================================
Table C1. Labor productivity growth and related measures - annual average changes: 2019-2023


                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                  Year                    productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business        2023                        1.3          2.6      1.3         4.3           0.1           3.0
                        2022                       -1.9          2.1      4.1         3.6          -4.1           5.7
                        2021                        1.4          7.2      5.8         4.6          -0.3           3.1
                        2020                        5.7         -2.8     -8.0         8.6           7.2           2.8
                        2019                        2.5          3.0      0.4         4.3           2.4           1.7
                        
Manufacturing           2023                       -0.8         -0.6      0.2         5.1           0.9           5.9
                        2022                       -1.2          2.8      4.0         3.6          -4.2           4.8
                        2021                        1.5          4.9      3.3         2.2          -2.5           0.6
                        2020                        0.8         -6.9     -7.7         7.0           5.6           6.2
                        2019                       -2.0         -2.0      0.0         2.6           0.8           4.8
=========================================================================================================================
Last Modified Date: March 07, 2024