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.
First Quarter 1996
The Bureau of Labor Statistics of the U.S. Department of Labor today reported preliminary productivity data--as measured by output per hour of all persons--for the first quarter of 1996. The seasonally-adjusted annual rates of productivity change in the first quarter were:
2.8 percent in the business sector, and 2.6 percent in the nonfarm business sector.
In both sectors, first-quarter productivity gains were larger than gains recorded in the third and fourth quarters of 1995.
In manufacturing, productivity changes in the first quarter were:
6.3 percent in manufacturing, 8.2 percent in durable goods manufacturing, and 3.8 percent in nondurable goods manufacturing.
The productivity increase in manufacturing in the first quarter was the largest since the first quarter of 1994. Output and hours in manufacturing, which includes about 18 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. First-quarter measures are summarized in table A and appear in detail in tables 1 through 5.
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 5).
Business
From the fourth quarter of 1995 to the first quarter of 1996, business sector productivity increased at a 2.8 percent annual rate. Output and hours advanced 4.0 percent and 1.1 percent, respectively. During the fourth quarter of 1995, output had increased 0.7 percent, and hours of all persons engaged in the sector increased 1.3 percent (seasonally adjusted annual rates); productivity fell 0.5 percent (table 1).
Hourly compensation increased 3.0 percent during the first quarter of 1996 and 3.1 percent in the fourth quarter of 1995. 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 0.2 percent rate during the first quarter. Unit labor costs in the business sector had risen 3.7 percent in the fourth quarter of 1995. The 0.2 percent increase in the first quarter of 1996 was the smallest since a 1.3 percent decline in the third quarter of 1994.
Real hourly compensation, which takes into account changes in the Consumer Price Index for All Urban Consumers (CPI-U), fell at a 0.2 percent annual rate in the first quarter. In the fourth quarter of 1995, real hourly compensation had increased 0.7 percent.
The implicit price deflator for the business sector, which reflects changes in unit labor costs and unit nonlabor payments, increased 1.6 percent in the first quarter, compared with a 0.8 percent increase during the fourth quarter of 1995.
Nonfarm business
Productivity rose 2.6 percent in the nonfarm business sector in the first quarter, slightly less than in the business sector as a whole. Nonfarm business output rose 3.7 percent, and hours of all persons increased 1.0 percent. During the fourth quarter of 1995, productivity had fallen 1.0 percent in this sector, reflecting gains of 0.6 percent in output and 1.6 percent in hours (table 2).
Hourly compensation increased at a 3.3 percent annual rate in the first quarter, compared with a 2.8 percent increase one quarter earlier. When the rise in the CPI-U was taken into account, real hourly compensation was unchanged; it had increased 0.4 percent in the fourth quarter. Unit labor costs rose 0.6 percent, considerably less than the 3.8 percent increase which occurred in the fourth quarter of 1995.
The implicit price deflator for nonfarm business output rose 1.4 percent in the first quarter, compared with a 0.7 percent rise one quarter earlier.
Manufacturing
Productivity increased at a 6.3 percent seasonally adjusted annual rate in manufacturing in the first quarter of 1996, as output rose 2.8 percent and hours of all persons dropped 3.2 percent (seasonally adjusted annual rates). In the fourth quarter of 1995, productivity rose 3.0 percent as output rose 1.4 percent and hours decreased 1.5 percent (table 3).
Hourly compensation of all manufacturing workers fell 0.8 percent during the first quarter, the first decrease since a 0.6 percent decrease in the second quarter of 1989. Hourly compensation had risen 2.5 percent in the fourth quarter of 1995. The 0.8 percent decrease in the first quarter of 1996 reflects very different trends in the durable and nondurable manufacturing sectors--in durable goods, hourly compensation dropped 3.2 percent in the first quarter, and in nondurable goods hourly compensation rose 3.1 percent (tables 4 and 5). The first quarter 1996 movements in hourly compensation for durable and total manufacturing were affected by a pension contribution made in 1995 by a large manufacturer.
Real hourly compensation in the manufacturing sector fell 3.9 percent when the increase in consumer prices was taken into account. Unit labor costs dropped at a 6.6 percent annual rate in the first quarter of 1996, marking the sixth consecutive quarter of decreases in the manufacturing sector. These costs had fallen 0.5 percent in the fourth quarter of 1995.
REVISED MEASURES
Current and previous measures for the fourth quarter of 1995 for manufacturing are compared in table B. The quarterly movements differ from those reported on April 10, based on information then available. There were no revisions to data for other sectors.
Source: U.S. Bureau of Labor Statistics · Original release May 16, 1996.
Archived Nov 11, 2026. Source reuse policy. Formatting has been adapted for reading; the source’s conclusions remain attributed to its publisher.