September 10, 2010
During the second quarter of 2010, nonfarm business sector labor productivity—as measured by output per hour—decreased at a 1.8 percent annual rate. Output increased 1.6 percent and hours increased 3.5 percent—the largest second-quarter gain in hours worked since the first quarter of 2006.
Unit labor costs—defined as the ratio of hourly compensation to labor productivity—in nonfarm businesses rose 1.1 percent in the second quarter of 2010, as the 1.8 percent decline in productivity was partially offset by a 0.7 percent decline in hourly compensation. Unit labor costs decreased 2.8 percent over the last four quarters, as output per hour increased faster than hourly compensation.
From the second quarter of 2009 to the second quarter of 2010, productivity and output both grew 3.7 percent and hours were unchanged. Nonfarm business productivity increased at an average annual rate of 2.5 percent from 2000 through 2009.
These data are from the BLS Productivity and Costs program. Data in this report are seasonally adjusted annual rates. These estimates are subject to revision. Additional information is available in "Productivity and Costs, Second Quarter 2010, Revised" (HTML) (PDF), news release USDL-10-1211. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours of all persons, including employees, proprietors, and unpaid family workers. The revised measures were based on more recent source data than were available for the preliminary report.