Research >> Economics
3Q2018 Productivity Growth Increased 2.2%
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Nonfarm business sector labor productivity increased 2.2 percent during the third quarter of 2018, the U.S. Bureau of Labor Statistics reported today, as output increased 4.1 percent and hours worked increased 1.8 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2017 to the third quarter of 2018, productivity increased 1.3 percent, reflecting a 3.7-percent increase in output and a 2.4-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 1.2 percent in the third quarter of 2018, reflecting a 3.5-percent increase in hourly compensation and a 2.2-percent increase in labor productivity. Unit labor costs increased 1.5 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.
Manufacturing sector labor productivity increased 0.5 percent in the third quarter of 2018, as output increased 3.4 percent and hours worked increased 2.9 percent. Productivity increased 1.5 percent in the durable manufacturing sector, as output rose 4.9 percent and hours worked increased 3.4 percent. In the non-durable goods manufacturing sector, a 0.1-percent decline in productivity reflected a 1.9-percent increase in output and a 2.0-percent increase in hours worked. Over the last four quarters, total manufacturing sector productivity increased 1.3 percent, as output increased 3.4 percent and hours worked increased 2.1 percent. Unit labor costs in manufacturing increased 0.9 percent in the third quarter of 2018 and increased 0.9 percent from the same quarter a year ago.
Revised measures
Revised and previous measures for the second quarter of 2018 are shown in tables A2 and B1, covering the following major sectors: nonfarm business, business, manufacturing, and nonfinancial corporations.
In the second quarter of 2018, nonfarm business sector productivity increased 3.0 percent, slightly higher than reported on September 6. Unit labor costs declined 1.0 percent during the second quarter, the same rate as previously reported. In the manufacturing sector, productivity was revised down 0.3 percentage point to an increase of 1.2 percent, due to a downward revision to output. Durable manufacturing productivity was revised down from 1.1 percent to 0.3 percent, due to a downward revision to output; nondurable manufacturing productivity was revised up slightly to 2.4 percent. Unit labor costs in total manufacturing increased 0.1 percent rather than decreasing 0.2 percent as previously reported.
Second-quarter 2018 measures of productivity and costs were revised for the nonfinancial corporate sector. Productivity decreased 0.9 percent rather than decreasing 0.7 percent as previously reported. Unit labor costs increased 2.7 percent rather than the preliminary estimate of a 2.4-percent increase.
Posted: November 1, 2018 Thursday 08:30 AM