Research >> Economics
4Q2018 Productivity Growth Increased 1.3%
Manufacturing sector labor productivity increased 1.3 percent during the fourth quarter of 2018, the U.S. Bureau of Labor Statistics reported today, as output increased 2.3 percent and hours worked increased 1.0 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the fourth quarter of 2017 to the fourth quarter of 2018, manufacturing productivity increased 0.7 percent, reflecting a 2.8-percent increase in output and a 2.1-percent increase in hours worked. (See tables A1 and 3.) Annual average productivity increased 0.6 percent from 2017 to 2018. (See table C1.)
Durable manufacturing labor productivity increased 2.6 percent, with output increasing 5.7 percent and hours increasing 3.0 percent. Labor productivity in the nondurable manufacturing sector increased 1.2 percent, with output declining 1.2 percent and hours declining 2.4 percent. (See tables A1, 4, and 5.)
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.
Revised and previously published measures for the third quarter of 2018 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 2018, nonfarm business productivity was revised down 0.1 percentage point, to an increase of 2.2 percent. (See table B1.) Unit labor costs in the nonfarm business sector increased 0.9 percent in the third quarter, the same rate as previously reported.
In the manufacturing sector, productivity was revised up 0.1 percentage point, to an increase of 1.1 percent. Manufacturing unit labor costs decreased 1.3 percent, a 0.1-percentage point downward revision from the previously reported figure.
In the nonfinancial corporate sector, productivity was revised up 0.6 percentage point in the third quarter of 2018, to an increase of 6.1 percent--the largest increase since a 6.7-percent increase in the fourth quarter of 2012. This upward revision to productivity is due primarily to a 0.6-percentage point upward revision to output, with a small contribution from a 0.1 percentage point downward revision to hours. (See table A2.)
Table C1 presents annual average changes for the most recent 5 years for the total manufacturing sector. In the manufacturing sector, productivity increased 0.6 percent in 2018, as output increased 2.6 percent and hours worked increased 2.0 percent. The increases in annual average output and hours were the largest since 2011 and 2012, respectively. Manufacturing sector productivity has grown less than 1.0 percent in each of the last 8 years. The average annual rate of manufacturing productivity growth from 2007 to 2018 is 0.6 percent, well below the long-term rate from 1987 to 2018 of 2.6 percent.
Table C1 also shows annual average changes for hours worked in the nonfarm business sector. Hours worked increased 2.2 percent in the nonfarm business sector in 2018. Annual averages for 2018 are not available for the other nonfarm business sector measures.
Posted: February 6, 2019 Wednesday 08:30 AM