Research >> Economics
3Q Productivity Growth Increased 2.3%
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Nonfarm business sector labor productivity increased at a 2.3 percent annual rate during the third quarter of 2011, the U.S. Bureau of Labor Statistics reported today, with output and hours worked rising 3.2 percent and 0.8 percent, respectively. From the third quarter of 2010 to the third quarter of 2011, output increased 2.4 percent as hours rose 1.4 percent, resulting in a 0.9 percent increase in productivity. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers.
Unit labor costs in nonfarm businesses fell 2.5 percent in the third quarter of 2011, reflecting the 2.3 percent increase in output per hour combined with a 0.2 percent decline in hourly compensation. Unit labor costs rose 0.4 percent over the last four quarters. BLS defines 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.
Nonfarm business real hourly compensation decreased 3.2 percent in the third quarter of 2011, reflecting a 0.2 percent decline in hourly compensation combined with a 3.1 percent increase in consumer prices (seasonally adjusted annual rates). Real hourly compensation is the ratio of hourly compensation to consumer prices. This measure declined 2.3 percent from the same quarter a year ago; this is the largest decline in this series which begins in 1948.
Manufacturing sector productivity grew 5.0 percent in the third quarter of 2011, as output rose 4.6 percent and hours decreased 0.4 percent. Productivity jumped 9.5 percent in the durable goods sector and edged up 0.1 percent in the nondurable goods sector. From the third quarter of 2010 to the third quarter of 2011, manufacturing sector productivity increased 2.9 percent. Unit labor costs in manufacturing fell 5.1 percent in the third quarter of 2011 and decreased 1.9 percent over the last four quarters.
Third quarter data for the nonfinancial corporate sector was released today. Output per hour decreased 2.6 percent as output declined 0.8 percent and hours grew 1.9 percent. Unit labor costs rose 3.0 percent.
Posted: November 30, 2011 Wednesday 08:30 AM