THE PRIMARY SOURCE
Read the release
Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.
The Bureau of Labor Statistics of the U.S. Department of Labor today reported preliminary fourth-quarter seasonally adjusted annual rates of change in productivity--as measured by output per hour of all persons--and changes for the full year 1995. In the fourth quarter, productivity was unchanged in the business sector as output and hours worked both rose a moderate 1.2 percent. In the nonfarm business sector, productivity dropped as hours rose 1.6 percent, somewhat more than the 1.1 percent increase in output. Percent changes in business and nonfarm business productivity were:
For the year 1995, productivity showed modest improvements over 1994 levels in both the business and nonfarm business sectors. Fourth-quarter productivity and related measures are summarized in table A and appear in detail in tables 1 through 5. Annual data are summarized in table B.
In the manufacturing sector, increases in productivity were:
Manufacturing productivity grew at a 2.7 percent annual rate in the fourth quarter as output increased 1.3 percent and hours of all persons fell 1.4 percent. Productivity grew faster in durable goods manufacturing than in nondurable goods manufacturing (table A). On an annual basis, manufacturing productivity increased 3.7 percent, slightly less than the 4.2 percent gain registered in 1994. (Output and hours in manufacturing, which includes about 19 percent of U.S. business-sector employment, tend to vary more from quarter to quarter than data for the more aggregate business and nonfarm business sectors.)
The data sources and methods used in the preparation of the manufacturing series differ from those used in preparing the business and nonfarm business series, and these measures are not directly comparable. Output measures for business and nonfarm business are based on measures of gross domestic product prepared by the Bureau of Economic Analysis of the U.S. Department of Commerce. Quarterly output measures for manufacturing reflect independent indexes of industrial production prepared by the Board of Governors of the Federal Reserve System. See Technical Notes for further information on data sources (page 8).
THIRD-TO-FOURTH QUARTER CHANGES, 1995 Business
Productivity was unchanged in the fourth quarter of 1995 as both output and hours of all persons engaged in the sector rose 1.2 percent. In the third quarter, productivity had risen 1.6 percent (as revised), as output grew 4.4 percent and hours 2.8 percent (seasonally adjusted annual rates).
Hourly compensation increased at a 3.3 percent annual rate in the fourth quarter of 1995, following 4.3 percent growth during the third quarter. This measure includes wages and salaries, supplements, employer contributions to employee-benefit plans, and taxes. Unit labor costs, which reflect changes in hourly compensation and productivity, increased at a 3.3 percent annual rate during the fourth quarter, up from the 2.7 percent increase one quarter earlier.
Real hourly compensation, which takes into account changes in the Consumer Price Index for All Urban Consumers (CPI-U), rose at a 0.9 percent annual rate for persons in the business sector. This measure had risen 2.3 percent during the third quarter.
The implicit price deflator for business output, which reflects changes in unit labor costs and unit nonlabor payments, increased at an annual rate of 0.9 percent in the fourth quarter, the smallest increase since a 0.6 percent rise in the first quarter of 1967. In the third quarter, prices of the goods and services which comprise business output had increased at a 2.1 percent annual rate.
Nonfarm business
In the nonfarm business sector, productivity fell 0.5 percent in the fourth quarter, as output rose 1.1 percent and hours of all persons--employees, proprietors, and unpaid family workers--rose 1.6 percent (seasonally adjusted annual rates). During the third quarter, nonfarm productivity had increased at a 1.7 percent annual rate, as output grew 4.7 percent and hours increased 2.9 percent (table 2).
Hourly compensation rose 3.0 percent in the fourth quarter, and real hourly compensation increased 0.6 percent when the increase in the CPI-U was taken into account. During the third quarter, hourly compensation had increased by 4.3 percent, and real hourly compensation had risen 2.2 percent. Unit labor costs increased 3.5 percent in the fourth quarter, compared with 2.5 percent in the previous quarter.
The implicit price deflator for nonfarm business output rose 0.9 percent in the fourth quarter, down from the 1.8 percent increase posted in the third quarter. The 0.9 percent increase recorded in the fourth quarter of 1995 was the smallest increase since a similar one in the first quarter of 1966.
Manufacturing
Manufacturing productivity grew at a 2.7 percent seasonally adjusted annual rate in the fourth quarter of 1995, compared with a 5.7 percent increase in the third quarter (table 3). Output rose 1.3 percent in the fourth quarter, and hours of all persons fell 1.4 percent. In the third quarter, output had risen 2.6 percent, and hours fell 2.9 percent. Both durable and nondurable goods industries experienced productivity increases in the fourth quarter, 3.8 and 1.4 percent, respectively. The increase in durable manufacturing productivity was the result of a 3.6 percent increase in output combined with a 0.2 percent drop in hours. In nondurable manufacturing, output fell 1.6 percent, and hours dropped 3.0 percent (tables 4 and 5).
Hourly compensation of all manufacturing workers increased 2.3 percent in the fourth quarter, resulting in a drop of 0.1 percent when the increase in consumer prices was taken into account. Unit labor costs fell 0.4 percent in the fourth quarter. These costs have now fallen in every quarter since the third quarter of 1994 (when they rose 0.6 percent) and have decreased in eight of the last nine quarters.
ANNUAL AVERAGE CHANGES, 1994-1995
Business
Business productivity increased 0.9 percent when the annual average for 1995 is compared with the annual average for 1994 (table B). This increase was the largest since a 3.4 percent increase was posted in 1992. Output grew 2.5 percent in 1995, and hours of all persons engaged in the business sector increased 1.6 percent. In 1994, business sector productivity had grown 0.7 percent as output increased 4.2 percent and hours increased 3.4 percent.
Hourly compensation increased 3.5 percent in 1995, compared with an increase of 2.2 percent in 1994. Real hourly compensation increased 0.6 percent in 1995 after falling 0.4 percent in both 1993 and 1994.
Unit labor costs rose 2.5 percent in 1995, compared with a 1.4 percent increase in the previous year. The implicit price deflator rose 2.2 percent in both 1994 and 1995.
Nonfarm business
Productivity increased 1.1 percent in the nonfarm business sector during 1995, as output rose 2.7 percent and hours of all persons increased 1.6 percent. As in the larger business sector, the 1995 productivity increase was the largest since 1992 (when it increased 3.2 percent). In 1994, productivity had risen 0.5 percent, as output and hours rose 4.0 and 3.4 percent, respectively.
Hourly compensation rose 3.6 percent in 1995 following a 2.2 percent increase in 1994. Real hourly compensation increased 0.7 percent in 1995, compared with a 0.4 percent drop in 1994. Unit labor costs in the nonfarm business sector grew 2.5 percent in 1995. In 1994, unit labor costs had increased 1.6 percent.
Manufacturing
Manufacturing productivity grew 3.7 percent in 1995, as output rose 3.5 percent and hours of all persons dropped 0.1 percent. Output per hour of all persons in manufacturing has now posted an increase in every year since 1979 (when it fell 0.6 percent). In durable goods manufacturing, productivity increased 4.5 percent in 1995 as output rose 5.5 percent and hours of all persons rose 0.9 percent. Productivity growth in nondurable goods manufacturing in 1995 was 2.9 percent, reflecting a modest increase in output of 1.2 percent and a decline in hours worked of 1.6 percent (table B). During 1994, total manufacturing productivity had risen 4.2 percent as output grew 6.5 percent and hours increased 2.2 percent.
Hourly compensation of manufacturing workers increased 3.1 percent during 1995, or a gain of 0.2 percent when the increase in consumer prices is taken into account. Gains in hourly compensation in nondurable goods manufacturing, 3.8 percent, were higher than those posted in durable goods manufacturing, 2.5 percent. As a result, real hourly compensation in durable goods industries fell off slightly, 0.3 percent, while rising 0.9 percent in nondurable goods industries.
Unit labor costs in manufacturing fell 0.6 percent in 1995. In 1994, unit labor costs had fallen 1.3 percent, reflecting both faster productivity growth and a smaller gain in compensation per hour than in 1995.
Revised Measures
Current and previous measures for the third quarter of 1995 for the business, nonfarm business, and manufacturing sectors are compared in table C. Productivity, output, and hourly compensation measures in the business and nonfarm business sectors are higher than those published on February 8, based on the information then available.
Measures of real hourly compensation were revised for all sectors to reflect revisions to the Consumer Price Index for All Urban Consumers. These revisions to the CPI, which reflect updated seasonal adjustment factors, were released February 26. Measures for 1991 forward were affected.
Revised measures: Nonfinancial Corporations
Productivity and cost measures for the third quarter for nonfinancial corporations, which were revised to incorporate the most recent information, were generally the same as the preliminary results announced on February 8, 1996. Unit profits grew at an annual rate of 41.4 percent compared with the preliminary estimate of 40.9 percent (table C).
Source: U.S. Bureau of Labor Statistics · Original release Mar 6, 1996.
Archived Nov 11, 2026. Source reuse policy. Formatting has been adapted for reading; the source’s conclusions remain attributed to its publisher.