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Economic News Release
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Second Quarter 2023, Revised



Transmission of material in this release is embargoed until                                 USDL 23-1942
8:30 a.m. (ET) Thursday, September 7, 2023

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


                                     PRODUCTIVITY AND COSTS 
                                  Second Quarter 2023, Revised

(NOTE: This release was reissued on September 18, 2023, due to errors in the first and second 
quarter 2023 estimates of hours worked for the business, nonfarm business, and nonfinancial 
corporate sectors. Results for the manufacturing sectors were correct as originally published. The 
errors in hours worked resulted in errors in related measures, including labor productivity. 
Affected estimates in this release have been corrected. Corrections to percent changes from the 
previous quarter and from the same quarter a year ago did not exceed 0.1 percentage point. 
Additional information is available at www.bls.gov/errata/.)

Nonfarm business sector labor productivity increased 3.5 percent in the second quarter of 2023, the 
U.S. Bureau of Labor Statistics reported today, reflecting a 0.2-percentage point downward revision 
from the preliminary estimate. Output increased 1.9 percent and hours worked decreased 1.5 percent in 
the second quarter of 2023. The decline in hours worked is the first decline since the second quarter of 
2020 and was the result of a 1.5-percent decline in average weekly hours; employment was unchanged. 
(All quarterly percent changes in this release are seasonally adjusted annual rates.) From the same 
quarter a year ago, nonfarm business sector labor productivity was revised down 0.1-percentage point to 
an increase of 1.2 percent. This is the first increase in the four-quarter productivity measure since the 
fourth quarter of 2021. (See table A1.)

Unit labor costs in the nonfarm business sector increased 2.2 percent in the second quarter of 2023, 
reflecting a 5.7-percent increase in hourly compensation and a 3.5-percent increase in productivity. Unit 
labor costs increased 2.5 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 2.9 percent in the 
second quarter of 2023, and declined 0.3 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 1.3 percent, as output grew at a 2.0-percent per year rate, outpacing hours worked, which grew at 
a 0.7-percent annual rate. The 1.3-percent annual rate of productivity growth in the current business 
cycle thus far is just below the 1.4-percent rate of the previous business cycle from the fourth quarter of 
2007 through fourth-quarter 2019.  

Manufacturing sector labor productivity increased 2.9 percent in the second quarter of 2023, as 
output increased 0.8 percent and hours worked decreased 2.1 percent. In the durable manufacturing 
sector, productivity increased 4.5 percent, reflecting a 3.2-percent increase in output and a 1.3-percent 
decrease in hours worked. Nondurable manufacturing sector productivity increased 2.0 percent, as 
output decreased 1.5 percent and hours worked decreased 3.5 percent. Total manufacturing sector 
productivity decreased 1.3 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)

Unit labor costs in the total manufacturing sector increased 4.9 percent in the second quarter of 2023, 
reflecting an 8.0-percent increase in hourly compensation and a 2.9-percent increase in productivity. 
Manufacturing unit labor costs increased 5.3 percent from the same quarter a year ago. (See tables A1 
and 3.)

Manufacturing sector labor productivity has increased at an annual rate of 0.2 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 0.3 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. 

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 measures for the second quarter of 2023 were announced today for the nonfinancial 
corporate sector. Productivity increased 3.7 percent in the second quarter of 2023 as output increased 
2.8 percent and hours worked decreased 0.8 percent. Productivity decreased 0.6 percent over the last 
four quarters; this is the first time the four-quarter measure has remained negative for six consecutive 
quarters. Unit profits of nonfinancial corporations increased at a 0.7-percent annual rate in the second 
quarter of 2023 and decreased 5.5 percent over the last four quarters. (See table 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 
business, nonfarm business, and manufacturing sectors for the second quarter of 2023. 

In the second quarter of 2023, nonfarm business sector productivity increased 3.5 percent--a 0.2-
percentage point downward revision from the preliminary estimate of a 3.7-percent increase--reflecting a 
0.5-percentage point downward revision to output and a 0.2-percentage point downward revision to 
hours worked. From the same quarter a year ago, nonfarm business sector labor productivity was 
revised down 0.1 percentage point to an increase of 1.2 percent; output was revised down from an
increase of 2.6 percent to an increase of 2.5 percent and hours worked increased 1.2 percent as 
previously reported. Unit labor costs increased 2.2 percent in the second quarter of 2023 rather than
increasing 1.6 percent as previously reported, reflecting a 0.2-percentage point upward revision to 
hourly compensation and a 0.2-percentage point downward revision to productivity. 

Manufacturing sector productivity for the second quarter of 2023 was revised down to an increase of 
2.9 percent from a previously reported increase of 4.0 percent. This revision stems from a 0.7-percentage 
point downward revision to durable manufacturing sector productivity to an increase of 4.5 percent as 
well as a larger 1.4-percentage point downward revision to nondurable manufacturing sector 
productivity to an increase of 2.0 percent. The downward revisions to productivity in the manufacturing 
sectors were due to downward revisions to output that were only partially offset by small downward 
revisions to hours worked. Total manufacturing unit labor costs increased 4.9 percent in the second 
quarter of 2023 rather than increasing 3.6 percent as previously reported. 

Table B2 presents previous and revised productivity and related measures for the business, nonfarm 
business, manufacturing, and nonfinancial corporate sectors for the first quarter of 2023. 

In the first quarter of 2023, nonfarm business sector productivity and unit labor costs were not revised. 
Manufacturing sector productivity was revised down 0.2 percentage point to a decrease of 2.0 percent. 
As a result, unit labor costs were revised up 0.2 percentage point to an increase of 2.6 percent. In the 
nonfinancial corporate sector, first-quarter 2023 productivity was revised down 0.1 percentage point to a 
decrease of 4.3 percent, reflecting a 0.1-percentage point upward revision to hours worked. Unit labor 
costs and unit profits in the nonfinancial corporate sector were not revised. (See table 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/.
______________
The preliminary Productivity and Costs news release for third-quarter 2023 is scheduled to be 
released on Thursday, November 2, 2023, at 8:30 a.m. (ET). 



=========================================================================================================================
                                        Upcoming Revisions
The 2023 Comprehensive Update of the National Income and Product Accounts (NIPA) will be released 
by the Bureau of Economic Analysis of the U.S. Department of Commerce on September 28, 2023. This 
update will be incorporated in our release on November 2, 2023.
=========================================================================================================================




=========================================================================================================================
Table A1. Labor productivity growth and related measures - revised second-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           3.5           1.9     -1.5        5.7            2.9           2.2
                        A year ago                 1.2           2.5      1.2        3.8           -0.3           2.5
                        
Business                Previous quarter           3.4           2.0     -1.3        5.4            2.6           1.9
                        A year ago                 1.4           2.6      1.2        3.8           -0.3           2.4
                        
Manufacturing           Previous quarter           2.9           0.8     -2.1        8.0            5.1           4.9
                        A Year ago                -1.3          -0.8      0.5        4.0           -0.1           5.3

 Durable                Previous quarter           4.5           3.2     -1.3        7.5            4.6           2.9
 manufacturing          A year ago                -1.5           0.1      1.6        3.1           -1.0           4.6

 Nondurable             Previous quarter           2.0          -1.5     -3.5        8.8            5.9           6.6
 manufacturing          A year ago                -0.3          -1.6     -1.3        5.5            1.4           5.8
=========================================================================================================================


=========================================================================================================================
Table A2. Labor productivity growth and related measures - preliminary second-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              3.7           2.8     -0.8        5.8            3.0           2.1
corporate            A year ago                   -0.6           1.1      1.6        4.1            0.1           4.7
=========================================================================================================================


=========================================================================================================================
Table B1. 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                    3.5           1.9     -1.5        5.7            2.9           2.2
                   Previously published            3.7           2.4     -1.3        5.5            2.7           1.6
                        
Business                Revised                    3.4           2.0     -1.3        5.4            2.6           1.9
                   Previously published            3.7           2.5     -1.1        5.1            2.3           1.3
                        
Manufacturing           Revised                    2.9           0.8     -2.1        8.0            5.1           4.9
                   Previously published            4.0           1.9     -2.0        7.8            4.9           3.6

 Durable                Revised                    4.5           3.2     -1.3        7.5            4.6           2.9
 manufacturing     Previously published            5.2           4.1     -1.1        7.4            4.5           2.0
                        
 Nondurable             Revised                    2.0          -1.5     -3.5        8.8            5.9           6.6
 manufacturing     Previously published            3.4          -0.1     -3.4        8.3            5.4           4.7
=========================================================================================================================


=========================================================================================================================
Table B2. Labor productivity growth and related measures  revised and previously published first-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                   -1.2           1.4      2.6        2.1           -1.6           3.3
                   Previously published           -1.2           1.4      2.6        2.1           -1.6           3.3
                        
Business                Revised                   -0.8           1.8      2.7        2.1           -1.6           2.9
                   Previously published           -0.8           1.8      2.6        2.1           -1.6           2.9
                        
Nonfinancial             Revised                  -4.3          -1.8      2.6        2.2           -1.6           6.7
corporate           Previously published          -4.2          -1.8      2.5        2.2           -1.5           6.7
                                                  
Manufacturing           Revised                   -2.0          -0.5      1.5        0.6           -3.1           2.6
                   Previously published           -1.8          -0.3      1.5        0.6           -3.1           2.4
 Durable                                          
 manufacturing          Revised                   -4.3          -1.9      2.5       -1.2           -4.8           3.3
                   Previously published           -4.3          -1.8      2.5       -1.2           -4.8           3.2
 Nondurable                                        
 manufacturing          Revised                    1.2           1.0     -0.2        3.8            0.0           2.6
                   Previously published            1.3           1.2     -0.2        3.8            0.0           2.4
=========================================================================================================================
Last Modified Date: September 18, 2023