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Handbook of Methods Productivity Measures: Business Sector and Major Subsectors Data sources

Productivity Measures: Business Sector and Major Subsectors: Data sources

Major Sector Productivity collects data from a variety of different sources. For almost all sectors and industries, output is measured using a different source than inputs (capital, labor, and intermediate inputs purchases). Below is information on data sources for measuring the components of labor productivity and multifactor productivity.

Output

The output index used to calculate productivity differs depending on the level of the economy being measured.

For business, nonfarm business, private business, and private nonfarm business the output index is prepared using real value added measures that are published by the Bureau of Economic Analysis (BEA). These output measures are based on and are consistent with the National Income and Product Accounts (NIPA), including the gross domestic product (GDP) measure, also prepared by the BEA.^⁠1 BEA calculates quarterly and annual measures of business sector output by removing from GDP the value added of general government, private households, and nonprofit institutions serving households. These measures, and the measures of nonfarm business sector output, are the real output series used to calculate Bureau of Labor Statistics (BLS) measures of labor productivity in the U.S. business and nonfarm business sectors. To measure multifactor productivity, BLS further restricts output to the U.S. private business sector, excluding the output of government enterprises. The BLS multifactor productivity statistics for the private business and private nonfarm business sectors are constructed using annual BEA output data.

At the NIPA industry level, including manufacturing durable and nondurable sectors, the annual output index used is a sectoral output measure based on data obtained from the Bureau of the Census. Output indexes for industries within the manufacturing sector use current-dollar industry value of production with intraindustry transactions removed and is deflated using prices from the BLS Producer Price Index program. For some nonmanufacturing industries, physical quantities of output are measured using data from the Department of the Interior and the Department of Transportation. For the remainder of nonmanufacturing industries output is prepared with data from the BEA. See table A for industry specific data sources.

Quarterly indexes of manufacturing output underlying the quarterly labor productivity data are estimated using the annual manufacturing of sectoral output based on census data and Indexes of Industrial Production, prepared by the Board of Governors of the Federal Reserve System. Because of a lag in the availability of the annual benchmark data, recent quarterly and annual manufacturing output measures also are extrapolated on the basis of the changes in the Indexes of Industrial Production.

Inputs

Hours worked. The primary source of hours and employment data is the BLS Current Employment Statistics (CES) program, which provides monthly survey data on employment and average weekly hours in nonagricultural establishments. CES data on the number of jobs held by wage and salary workers in nonfarm establishments are supplemented with data from the Current Population Survey (CPS) on self-employed and unpaid family workers to estimate total worker hours for each industry. CES data on the average weekly hours paid of workers are supplemented with CPS data on hours of nonproduction, self-employed, and unpaid family workers. Ratios of hours worked to hours paid are developed using data from the National Compensation Survey (NCS) and the BLS Hours at Work Survey.

Although the hours worked of all persons are usually based on CES and CPS survey data, estimates for some industries are derived from other sources. Estimates of hours for government enterprises and nonprofit corporations are calculated using data from the BEA. For quarterly labor productivity, hours of employees in the farm sector are derived from data from the CPS. For multifactor productivity, hours for this sector are based on USDA farm survey data.

Labor composition. For multifactor productivity, hours worked measures are adjusted for labor composition using data from the CPS. BLS partitions the CPS sample into gender × age category × education level worker groups, and computes the year-to-year growth in hours for independent categories of worker, weighted by work wages.

Labor compensation. Current dollar labor compensation measures are prepared using employee compensation data from the BEA. Compensation data includes wage and salary accruals (including executive compensation), commissions, tips, bonuses, and payments in kind representing income to the recipients—and supplements to these direct payments. Supplements consist of employer contributions to funds for social insurance, private pension and health and welfare plans, compensation for injuries, etc. For labor productivity, self-employed compensation per hour is assumed to be equal to employee compensation per hour.

For multifactor productivity, self-employed compensation is derived from proprietor’s income from BEA. Proprietor’s income includes both capital and labor income. An initial value of labor compensation per hour for proprietors is assumed to be the same as that of the average payrolled employee in that sector. Capital income and labor compensation initial estimates are then adjusted to be consistent with the value added estimates from the Industry accounts at BEA in addition to the proprietor’s income measure published by the BEA NIPA.

Measures of real compensation per hour are derived by adjusting hourly compensation for changes in consumer prices. The price changes for recent quarters are based on the BLS Consumer Price Index for All Urban Consumers (CPI-U). For earlier periods consumer prices are based on the BLS Consumer Price Index research series (CPI-U-RS).

Capital services. For depreciable assets, capital services measures are based on data from the BEA fixed asset accounts by detailed asset, and GDP by industry.

Nondepreciable assets, such as inventories and land, stocks are developed using data from BEA and the Internal Revenue Service. Farm land input is based on data from the Economic Research Service of the U.S. Department of Agriculture.

Intermediate inputs. Data on intermediate inputs—energy, materials, and purchased services—are derived from measures based on the BEA industry accounts.