Department of Labor Logo United States Department of Labor
Dot gov

The .gov means it's official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Economic News Release
PRINT:Print

Fourth Quarter and Annual Averages 2022, Preliminary



Transmission of material in this release is embargoed until                                 USDL 23-0150
8:30 a.m. (ET) Thursday, February 2, 2023

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 2022, Preliminary

Nonfarm business sector labor productivity increased 3.0 percent in the fourth quarter of 2022, the 
U.S. Bureau of Labor Statistics reported today, as output increased 3.5 percent and hours worked 
increased 0.5 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 1.5 percent, 
reflecting a 0.8-percent increase in output and a 2.3-percent increase in hours worked. (See table A1.) 
Annual average productivity decreased 1.3 percent from 2021 to 2022. This is the largest annual decline 
in the measure since 1974, when productivity decreased 1.7 percent. (See table C1.) 

Unit labor costs in the nonfarm business sector increased 1.1 percent in the fourth quarter of 2022, 
reflecting a 4.1-percent increase in hourly compensation and a 3.0-percent increase in productivity. Unit 
labor costs increased 4.5 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 1.0 percent in the fourth 
quarter, and declined 3.8 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 persons, including employees, proprietors, and unpaid family workers. The fourth 
quarter of 2022 is the second consecutive quarter in which both output and labor productivity increased, 
following decreases in the first two quarters of the year. Hours worked grew in all four quarters of 2022, 
but slower growth in the fourth quarter contributed to the acceleration in productivity growth in that 
quarter. The labor productivity index has grown at an annualized rate of 1.7 percent since the last 
business cycle peak in the fourth quarter of 2019--the last quarter before the COVID-19 pandemic and 
ensuing recession--reflecting a 2.1-percent rate of growth in output and a 0.4-percent rate of growth in 
hours worked over that three-year period. 

Manufacturing sector labor productivity decreased 1.5 percent in the fourth quarter of 2022, as output 
decreased 2.6 percent and hours worked decreased 1.1 percent. In the durable manufacturing sector, 
productivity decreased 1.7 percent, with a 2.9-percent decrease in output and a 1.2-percent decrease in 
hours worked. Nondurable manufacturing sector productivity decreased 1.4 percent, as output decreased 
2.3 percent and hours worked decreased 0.9 percent. Total manufacturing sector productivity decreased 
1.5 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)

Unit labor costs in the total manufacturing sector increased 4.8 percent in the fourth quarter of 2022, 
reflecting a 3.2-percent increase in hourly compensation and a 1.5-percent decrease in productivity. 
Manufacturing unit labor costs increased 4.3 percent from the same quarter a year ago. (See tables A1 
and 3.)

Manufacturing sector labor productivity declined in 5 of the last 6 quarters. In the third and fourth 
quarters of 2022, output also declined; productivity decreased in the other three quarters because hours 
worked increased faster than output. The total manufacturing labor productivity index has grown at an 
annualized rate of 0.8 percent in the current business cycle since the fourth quarter of 2019, reflecting a 
0.9-percent rate of growth in output and a 0.1-percent rate of growth in hours worked. 

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

Revised and previously published measures for the third quarter of 2022 are shown in tables A2 and 
B1 and cover the following major sectors: nonfarm business, business, manufacturing, and nonfinancial 
corporations.

In the third quarter of 2022, nonfarm business productivity was revised up 0.6 percentage point, to an 
increase of 1.4 percent. (See table B1.) Unit labor costs increased 2.0 percent in the third quarter, rather 
than increasing 2.4 percent as previously reported.

In the manufacturing sector, productivity in the third quarter of 2022 was revised down 0.6 percentage 
point, to a decrease of 3.5 percent. Manufacturing unit labor costs increased 6.5 percent, a 0.7-
percentage point upward revision from the previous estimate.

In the nonfinancial corporate sector, productivity was revised up 0.2 percentage point in the third 
quarter of 2022 to a decrease of 1.6 percent. This revision reflects a 0.1-percentage point upward 
revision to output to an increase of 1.9 percent. Hours worked were revised down 0.2 percentage point to 
an increase of 3.5 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 decreased 1.3 percent in 
2022, as output increased 2.3 percent and hours worked increased 3.7 percent. This is the largest annual 
decline in productivity since 1974, when productivity decreased 1.7 percent, and is the second-largest 
annual decline in the series, which begins in 1948.

Unit labor costs in the nonfarm business sector increased 5.7 percent in 2022, reflecting an increase of 
4.4 percent in hourly compensation and a decline of 1.3 percent in productivity. This is the largest 
annual increase in unit labor costs since an 8.2-percent increase in 1982. Real hourly compensation, 
which takes into account changes in consumer prices, decreased 3.4 percent in 2022. This is the largest 
decline in the series, which begins in 1948. Consumer prices grew 8.0 percent in 2022, which was the 
highest annual growth rate since a 9.4-percent increase in 1981.

In the manufacturing sector, productivity decreased 0.9 percent in 2022, reflecting an increase in 
output of 3.2 percent and an increase in hours of 4.2 percent. The increase in hours was the largest in the 
series, which begins in 1988.

Manufacturing unit labor costs increased 4.3 percent in 2022. Manufacturing real hourly compensation 
decreased 4.3 percent, as hourly compensation increased 3.4 percent while consumer prices increased 
8.0 percent. The decrease in real hourly compensation was the largest in the series, which begins in 
1988.

Quarterly and annual data, where available, for all sectors from 2020 to 2022 appear in tables 1-6. Full 
historical measures can be found on the Productivity and Costs home page: 
www.bls.gov/productivity/tables/.
______________
The revised Productivity and Costs news release for fourth-quarter and annual averages 2022 is 
scheduled to be released on Thursday, March 2, 2023, at 8:30 a.m. (ET). 


=========================================================================================================================
                                        Upcoming Revisions

Data in this release do not reflect the annual benchmark revision of the BLS Current Employment Statistics
program data to be released February 3, 2023. This benchmark will be incorporated in the next release on 
March 2, 2023.
=========================================================================================================================



=========================================================================================================================
Table A1. Labor productivity growth and related measures - preliminary fourth-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            3.0          3.5      0.5        4.1            1.0           1.1
                        A year ago                 -1.5          0.8      2.3        3.0           -3.8           4.5
                        
Business                Previous quarter            3.2          3.3      0.1        4.5            1.4           1.3
                        A year ago                 -1.4          0.7      2.2        3.1           -3.7           4.6
                        
Manufacturing           Previous quarter           -1.5         -2.6     -1.1        3.2            0.1           4.8
                        A Year ago                 -1.5          1.0      2.5        2.7           -4.1           4.3

 Durable                Previous quarter           -1.7         -2.9     -1.2        2.4           -0.8           4.1
 manufacturing          A year ago                 -1.5          2.3      3.8        2.1           -4.6           3.6

 Nondurable             Previous quarter           -1.4         -2.3     -0.9        5.0            1.8           6.5
 manufacturing          A year ago                 -0.8         -0.3      0.5        3.5           -3.3           4.3
=========================================================================================================================


=========================================================================================================================
Table A2. Labor productivity growth and related measures - revised and previously published third-quarter 
2022
(percent change from previous quarter at annual rate)


                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                                          productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------       
Nonfinancial             Revised                   -1.6          1.9      3.5        3.6           -2.0           5.3
corporate          Previously published            -1.8          1.8      3.7        3.5           -2.1           5.3
=========================================================================================================================


=========================================================================================================================
Table B1. Labor productivity growth and related measures - revised and previously published third-quarter 2022
(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                     1.4          3.6      2.3        3.4           -2.2           2.0
                   Previously published             0.8          3.3      2.5        3.2           -2.3           2.4
                        
Business                Revised                     1.1          3.5      2.4        3.2           -2.3           2.0
                   Previously published             0.5          3.1      2.6        3.1           -2.5           2.6
                        
Manufacturing           Revised                    -3.5         -0.2      3.5        2.7           -2.8           6.5
                   Previously published            -2.9          0.6      3.6        2.7           -2.9           5.8

 Durable                Revised                    -5.0          1.7      7.0        2.2           -3.3           7.5
 manufacturing     Previously published            -5.0          1.7      7.1        2.2           -3.3           7.5
                        
 Nondurable             Revised                    -0.1         -2.1     -2.1        2.9           -2.7           2.9
 manufacturing     Previously published             1.3         -0.7     -1.9        2.8           -2.8           1.5
=========================================================================================================================


=========================================================================================================================
Table C1. Labor productivity growth and related measures - annual average changes: 2018-2022


                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                  Year                    productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business        2022                       -1.3          2.3      3.7       4.4            -3.4           5.7
                        2021                        2.4          7.8      5.3       4.9             0.2           2.4
                        2020                        4.4         -3.5     -7.6       8.1             6.8           3.6
                        2019                        2.0          2.7      0.7       3.8             2.0           1.8
                        2018                        1.4          3.5      2.0       3.4             0.9           1.9
                        
Manufacturing           2022                       -0.9          3.2      4.2       3.4            -4.3           4.3
                        2021                        2.7          5.8      3.1       2.7            -1.8           0.1
                        2020                        0.8         -6.6     -7.4       7.0             5.7           6.1
                        2019                       -2.4         -2.3      0.2       2.4             0.5           4.9
                        2018                        0.2          2.0      1.8       2.3            -0.1           2.1
=========================================================================================================================
Last Modified Date: February 02, 2023