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Nonfarm business labor productivity up 3.7 percent, second quarter 2023

August 08, 2023

Labor productivity in the nonfarm business sector increased 3.7 percent in the second quarter of 2023, following a decline of 1.2 percent in the prior quarter.

Nonfarm business sector labor productivity, percent change from previous quarter at annual rate, first quarter 2021–second quarter 2023
Quarter Labor
productivity
  Output   Hours
worked
Hourly
compensation
Unit
labor costs

Q1 2021

3.4 8.5 4.9 -0.9 -4.2

Q2 2021

2.3 8.9 6.4 6.9 4.4

Q3 2021

-3.0 2.7 5.9 5.9 9.1

Q4 2021

3.0 9.1 5.9 6.8 3.7

Q1 2022

-6.0 -2.5 3.8 2.0 8.5

Q2 2022

-3.7 -1.2 2.6 2.6 6.6

Q3 2022

1.2 3.6 2.4 8.2 6.9

Q4 2022

1.6 2.9 1.3 -0.7 -2.2

Q1 2023

-1.2 1.4 2.6 2.1 3.3

Q2 2023

3.7 2.4 -1.3 5.5 1.6

The rise in labor productivity was due to a 2.4-percent increase in output and a 1.3-percent decline in hours worked. The decrease in hours worked is the first decline since the second quarter of 2020. Prior to declines in 2019 and 2020, hours worked had not decreased since 2009.

Unit labor costs in the nonfarm business sector increased 1.6 percent in the second quarter of 2023. This reflects a 5.5-percent increase in hourly compensation and a 3.7-percent increase in productivity.

These quarterly percent changes are from the Productivity program and are seasonally adjusted annual rates, subject to revision. See "Productivity and Costs — Second Quarter 2023, Preliminary" to learn more. Also see charts on productivity and costs. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked for all persons, including employees, proprietors, and unpaid family workers.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Nonfarm business labor productivity up 3.7 percent, second quarter 2023 at https://www.bls.gov/opub/ted/2023/nonfarm-business-labor-productivity-up-3-7-percent-second-quarter-2023.htm (visited July 20, 2024).

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