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Economic News Release

Technical notes


Labor Hours

Hours worked data for the labor productivity and cost measures include hours worked for all 
persons working in the sector—wage and salary workers, the self-employed and unpaid family 
workers. The primary source of hours and employment data is the BLS Current Employment 
Statistics (CES) program, which provides monthly survey data on the number of jobs held by and 
hours paid to wage and salary workers in nonfarm establishments, counting a person who is 
employed by two or more establishments at each place of employment. As of the February 3, 
2023 Employment Situation release, the CES program has updated the national nonfarm payroll 
series to the 2022 North American Industry Classification System (NAICS). The BLS Major 
Sector Productivity program will be remaining on a NAICS 2017 basis for the time being by 
converting NAICS 2022 data from CES back to a NAICS 2017 basis using ratios published on 
the CES website and based on the Quarterly Census of Employment and Wages (QCEW). Hours 
of paid time off are removed from hours paid using data from the National Compensation Survey 
(NCS) for 1996 forward and data from the BLS Hours at Work survey, conducted for this 
purpose, prior to 1990. Between 1990 and 1995, hours of paid time off are removed using a 
combination of NCS and Hours at Work survey data. Off-the-clock hours are added, yielding 
hours worked, using data from the Current Population Survey (CPS). 

Data from the CPS are used to estimate hours worked for farm labor, nonfarm proprietors, and 
nonfarm unpaid family workers. Using CPS information on employment and hours worked at 
primary jobs and all other jobs, separately, the BLS productivity measures assign all hours 
worked to the appropriate industrial sector. Hours for government enterprises are derived from 
the CPS, the CES, and the National Income and Product Accounts (NIPA) prepared by the 
Bureau of Economic Analysis (BEA) of the Department of Commerce. 

Detailed hours data are presented in the table “Hours Worked in Total U.S. Economy and 
Subsectors” on the BLS website (


Business sector output is a chain-type, current-weighted index constructed after excluding from 
gross domestic product (GDP) the following outputs: general government, nonprofit institutions, 
and households (including owner-occupied housing). Corresponding exclusions also are made in 
labor hours worked. Business output accounted for about 77 percent of the value of GDP in 
2023. Nonfarm business, which excludes farming, accounted for about 76 percent of GDP in 

Annual indexes for manufacturing and its durable and nondurable goods components are 
constructed by deflating current-dollar industry value of production data from the U.S. Bureau of 
the Census with deflators from the BLS. These deflators are based on data from the BLS 
Producer Price Index program and other sources. The industry shipments are aggregated using 
annual weights, and intrasectoral transactions are removed. Quarterly manufacturing output 
measures are based on the indexes of industrial production prepared monthly by the Board of 
Governors of the Federal Reserve System, adjusted to be consistent with annual indexes of 
manufacturing sector output prepared by BLS. 

Nonfinancial corporate output is a chain-type, current-weighted index calculated on the basis of 
the costs incurred and the incomes earned from production. The output measure excludes the 
following outputs from GDP: general government; nonprofit institutions; households; 
unincorporated business; and those corporations classified as offices of bank holding companies, 
offices of other holding companies, or offices in the finance and insurance sector. Nonfinancial 
corporations accounted for about 52 percent of the value of GDP in 2022.

Labor Productivity

The measure describes the relationship between real output and the labor time involved in its 
production. Measures of labor productivity growth show the changes from period to period in the 
amount of goods and services produced per hour worked. They reflect the joint effects of many 
influences, including changes in technology; capital investment; level of output; utilization of 
capacity, energy, and materials; the organization of production; managerial skill; and the 
characteristics and effort of the work force.

Labor Compensation

The measure includes accrued wages and salaries, supplements, employer contributions to 
employee benefit plans, and taxes. Estimates of labor compensation by major sector, required for 
measures of hourly compensation and unit labor costs, are based primarily on employee 
compensation data from the NIPA, prepared by the BEA. The compensation of employees in 
general government, nonprofit institutions and households are subtracted from compensation of 
employees in domestic industries to derive employee compensation for the business sector. The 
labor compensation of proprietors cannot be explicitly identified and must be estimated. This is 
done by assuming that proprietors have the same hourly compensation as employees in the same 
sector. The quarterly labor productivity and cost measures do not contain estimates of 
compensation for unpaid family workers.  
Unit Labor Costs

These measures describe the relationship between compensation per hour and labor productivity, 
or real output per hour, and can be used as an indicator of inflationary pressure on producers. 
Increases in hourly compensation increase unit labor costs; labor productivity increases offset 
compensation increases and lower unit labor costs. 

Presentation of the data

The quarterly data in this release are presented in three ways: as percent changes from the 
previous quarter presented at a compound annual rate, as percent changes from the 
corresponding quarter of the previous year, and as index number series where 2017=100. Annual 
data are presented both as index number series and percent changes from the previous year.  

The index numbers and rates of change reported in the productivity and costs news release are 
rounded to one decimal place. All percent changes in this release and on the BLS web site are 
calculated using index numbers to three decimal places. A complete historical series of these 
index numbers are available at the BLS web site,, or by contacting 
the BLS Division of Major Sector Productivity (Telephone 202-691-5606 or email

For a more detailed explanation of methodology see the Handbook of Methods at

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Last Modified Date: February 01, 2024