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3Q2019 Productivity Growth Decreased 0.3%
Nonfarm business sector labor productivity decreased 0.3 percent in the third quarter of 2019, the U.S. Bureau of Labor Statistics reported today, as output increased 2.1 percent and hours worked increased 2.4 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2018 to the third quarter of 2019, productivity increased 1.4 percent, reflecting a 2.3-percent increase in output and a 0.9-percent increase in hours worked.
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.
Unit labor costs in the nonfarm business sector increased 3.6 percent in the third quarter of 2019, reflecting a 3.3-percent increase in compensation per hour and a 0.3-percent decline in productivity. Unit labor costs increased 3.1 percent over the last four quarters.
BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs, and increases in output per hour tend to reduce them.
Hours worked data for the nonfarm business labor productivity measures include hours worked for all persons working in the sector--wage and salary workers, the self-employed, and unpaid family workers. Quarterly changes in hours worked by self-employed and unpaid family workers are more volatile than for wage and salary workers. In the third quarter of 2019, self-employed workers made an unusually large contribution to growth in hours worked by all persons. (See Technical Notes section for further
Manufacturing sector labor productivity declined 0.1 percent in the third quarter of 2019, as output increased 1.1 percent and hours worked increased 1.3 percent. Total manufacturing sector productivity also declined 0.1 percent over the last four quarters, as output decreased 0.5 percent and hours worked decreased 0.4 percent. (See tables A1 and 3.) Productivity increased 1.2 percent in the durable manufacturing sector in the third quarter of 2019, reflecting a 2.4-percent increase in output and a 1.2-percent increase in hours worked. Productivity decreased 1.5 percent in the nondurable manufacturing sector as output declined 0.2 percent and hours worked increased 1.3 percent. (See tables A1, 4, and 5.) Unit labor costs in the manufacturing sector increased 3.6 percent in the third quarter of 2019, and increased 4.9 percent from the same quarter a year ago.
The concepts, sources, and methods used for the manufacturing output series differ from those used in the business and nonfarm business output series; these output measures are not directly comparable. See the Technical Notes for a more detailed explanation.
Revised and previous measures for the second quarter of 2019 are shown in tables A2 and B1, covering the following major sectors: nonfarm business, business, manufacturing, and nonfinancial corporations.
In the second quarter of 2019, nonfarm business sector productivity increased 2.5 percent, slightly more than reported on September 5. Unit labor costs increased 2.4 percent during the second quarter, slightly less than previously reported. In the manufacturing sector, productivity was revised down 0.2 percentage point to a decrease of 2.4 percent in the second quarter of 2019. Durable manufacturing productivity decreased 0.8 percent and nondurable manufacturing productivity fell 4.3 percent after revisions. Unit labor costs in total manufacturing increased 6.9 percent in the second quarter of 2019 rather than increasing 6.7 percent as reported September 5.
Second-quarter 2019 measures of productivity and costs were revised for the nonfinancial corporate sector. Productivity increased 2.5 percent rather than increasing 2.8 percent as previously reported. Unit labor costs increased 2.5 percent rather than the preliminary estimate of a 2.2-percent increase.
Posted: November 6, 2019 Wednesday 08:30 AM