Research >> Economics
3Q2016 Productivity Growth Increased 3.1%
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Nonfarm business sector labor productivity increased at a 3.1-percent annual rate during the third quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 3.4 percent and hours worked increased 0.3 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The quarterly increase in nonfarm business sector labor productivity was the first increase after three consecutive declines in the measure. From the third quarter of 2015 to the third quarter of 2016, productivity was unchanged.
Unit labor costs in the nonfarm business sector increased 0.3 percent in the third quarter of 2016, reflecting a 3.4-percent increase in hourly compensation and a 3.1-percent increase in productivity. Unit labor costs increased 2.3 percent over the last four quarters.
Manufacturing sector labor productivity increased 1.0 percent in the third quarter of 2016, as output and hours worked increased 1.1 percent and 0.1 percent, respectively. Output per hour increased 2.5 percent in the durable goods manufacturing sector, the combined effect of a 1.9-percent increase in output and a 0.6-percent decline in hours worked. Productivity decreased 1.1 percent in the nondurable goods sector in the third quarter of 2016, following a 4.6-percent second-quarter decrease. Over the last four quarters, manufacturing sector productivity increased 0.2 percent, as output was unchanged and hours worked declined 0.1 percent. Unit labor costs in manufacturing increased 2.2 percent in the third quarter of 2016 and rose 2.9 percent from the same quarter a year ago. Hourly compensation increased 3.2 percent in the third quarter of 2016.
Revised measures
In the second quarter of 2016, nonfarm business sector productivity decreased 0.2 percent, rather than decreasing 0.6 percent as reported on September 1. The upward revision reflects a 0.5-percentage point upward revision to output; hours were unrevised. Unit labor costs increased 3.9 percent during the second quarter--rather than increasing 4.3 percent as previously reported--due to the 0.4-percentage point upward revision to productivity. In the manufacturing sector, productivity was revised down slightly to a decrease of 0.5 percent from a previously-reported decline of 0.4 percent, reflecting small downward revisions to both output and hours. Unit labor costs increased 6.8 percent rather than 6.7 percent.
Second-quarter 2016 measures of productivity and costs were revised for the nonfinancial corporate sector. Productivity decreased 2.3 percent rather than 2.1 percent as reported on September 1. Unit labor costs increased 6.2 percent rather than the preliminary estimate of 5.9 percent.
Posted: November 3, 2016 Thursday 08:30 AM