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.
Second Quarter 2009, Preliminary
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 second quarter of 2009. The seasonally adjusted annual rates of productivity change in the second quarter were:
6.3 percent in the business sector and 6.4 percent in the nonfarm business sector.
Productivity gains in both sectors were the largest since the third quarter of 2003, and were due to hours worked declining faster than output.
In manufacturing, the preliminary productivity changes in the second quarter were:
5.3 percent in manufacturing, 3.9 percent in durable goods manufacturing, and 2.0 percent in nondurable goods manufacturing.
The increases in productivity in all manufacturing sectors were the result of hours falling faster than output. Output and hours in manufacturing, which includes about 11 percent of U.S. business-sector employment, tend to vary more from quarter to quarter than data for the aggregate business and nonfarm business sectors. Second-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 indexes of industrial production independently prepared by the Board of Governors of the Federal Reserve System. See Technical Notes for further information on data sources.
Data in this release reflect the comprehensive revision to the National Income and Product Accounts (NIPA) released by the Bureau of Economic Analysis of the U.S. Department of Commerce on July 31. See Revised Measures.
Business
Business sector output per hour increased 6.3 percent from the first quarter to the second quarter of 2009, as output decreased 1.8 percent and hours of all persons engaged in the sector--employees, proprietors, and unpaid family workers--fell 7.5 percent (seasonally adjusted annual rates). The productivity increase was the largest since the third quarter of 2003, when output per hour increased 8.4 percent. From the second quarter of 2008 to the second quarter of 2009 productivity grew 1.9 percent in the business sector, as output fell 5.4 percent and hours fell 7.1 percent (tables A and 1). Business sector productivity had grown at an average annual rate of 2.6 percent from 2000 through 2008.
Hourly compensation edged up 0.1 percent in the second quarter of 2009 after falling 2.5 percent in the first quarter (seasonally adjusted annual rates). Hourly compensation increased 1.1 percent over the last four quarters. This measure of compensation includes accrued wages and salaries, supplements, employer contributions to employee benefit plans, and taxes. Real hourly compensation, which takes into account changes in consumer prices, fell 1.2 percent during the second quarter of 2009 as consumer prices increased 1.3 percent (seasonally adjusted annual rates).
The change in unit labor costs approximates the change in hourly compensation less the change in productivity. Unit labor costs decreased at an annual rate of 5.8 percent during the second quarter of 2009. The implicit price deflator for the business sector, which reflects changes in unit labor costs and unit nonlabor payments, decreased 0.1 percent in the second quarter of 2009 and increased 2.1 percent one quarter earlier.
Nonfarm Business
Productivity increased 6.4 percent in the nonfarm business sector during the second quarter of 2009, reflecting declines of 1.7 percent in output and 7.6 percent in hours (seasonally adjusted annual rates). The productivity gain was the largest since the third quarter of 2003, when productivity grew at a 9.7 percent annual rate. Over the last four quarters nonfarm hours have fallen 7.3 percent and output has declined 5.6 percent, yielding an increase of 1.8 percent in output per hour (tables A and 2). Nonfarm business productivity increased at an annual rate of 2.5 percent from 2000 through 2008.
Hourly compensation in the nonfarm business sector increased 0.2 percent in the second quarter of 2009, compared to a decrease of 2.4 percent one quarter earlier. When the 1.3 percent rise in consumer prices was taken into account, real hourly compensation fell 1.1 percent in the second quarter of 2009 (seasonally adjusted annual rates).
Nonfarm business unit labor costs fell 5.8 percent in the second quarter of 2009 due entirely to productivity improvement; hourly compensation increased slightly. These costs declined 0.6 percent over the last four quarters, as a 1.8 percent increase in output per hour was partially offset by a 1.3 percent increase in compensation per hour (tables A and 2). The implicit price deflator for nonfarm business output decreased 0.2 percent in the second quarter of 2009 and increased 1.7 percent from the same quarter a year ago.
Manufacturing
Manufacturing productivity grew 5.3 percent in the second quarter of 2009, as output fell 9.9 percent and hours worked decreased 14.4 percent (seasonally adjusted annual rates). This was the largest quarterly gain in manufacturing productivity since the first quarter of 2005, when output per hour increased at a 7.3 percent annual rate. Over the last four quarters, manufacturing productivity declined 1.3 percent, as a 15.0 percent drop in output was largely offset by a 13.9 percent decline in hours worked (tables A and 3). For the entire 2000-2008 period manufacturing productivity increased at a 3.3 percent annual rate.
In durable goods industries, productivity rose 3.9 percent in the second quarter of 2009, as output fell 16.5 percent and hours fell faster, -19.6 percent. This was the third consecutive quarter of double-digit declines in output and hours in the durable manufacturing sector. In nondurable goods industries, productivity grew 2.0 percent in the second quarter, reflecting declines in output and hours of 3.4 percent and 5.3 percent, respectively (tables A, 4, and 5).
During the second quarter of 2009, hourly compensation grew 5.8 percent in total manufacturing, 8.7 percent in durable manufacturing and 2.0 percent in nondurable manufacturing (seasonally adjusted annual rates). As revised, manufacturing hourly compensation increased 2.2 percent in the first quarter; when consumer prices were taken into account, real hourly compensation of all manufacturing workers rose 4.4 percent in the second quarter, and 4.6 percent in the first quarter of 2009.
Unit labor costs in manufacturing increased 0.5 percent in the second quarter of 2009; a revised increase of 4.9 percent was reported for the first quarter of 2009. From the second quarter of 2008 to the second quarter of 2009, unit labor costs increased 7.4 percent (tables A and 3).
Revised measures
In addition to incorporating the most recent information on employment and hours, consumer prices, and manufacturing output in recent months, the measures released today reflect the revised National Income and Product Accounts (NIPA) data released by the Bureau of Economic Analysis, U.S. Department of Commerce, on July 31. NIPA output data for the business, nonfarm business and nonfinancial corporate sectors were revised historically. As a result, measures computed by BLS using output, such as productivity, were revised historically for these sectors. NIPA compensation data used for all sectors were revised back to 1978. BLS measures involving compensation, including hourly compensation, real hourly compensation and unit labor costs, were revised historically for all sectors. The compensation data for manufacturing sectors for first quarter 2001 forward are on a North American Industry Classification System (NAICS) basis; data prior to this are on a Standard Industrial Classification (SIC) System basis. The measures involving compensation therefore contain a break in series at 2001. NIPA data on employment in government enterprises and the proportion of total compensation paid to employees of corporations and tax-exempt organizations also led to BLS hours revisions back to 1998. Revised quarterly and annual series for recent years appear in tables 1-6 and revised annual indexes are displayed in appendix tables 1-3. Full historical annual and quarterly measures can be found on the productivity and costs home page http://www.bls.gov/lpc/#data.
In the first quarter of 2009, for the business and nonfarm business sectors, output was revised down and hours were virtually the same, resulting in downward revisions to productivity. Hourly compensation was revised down substantially in both sectors, leading to large downward revisions to unit labor costs despite the downward revision to productivity.
In the manufacturing sector, productivity declined slightly less than previously reported in the first quarter of 2009, and the full effect of a large downward revision to hourly compensation is seen in a corresponding downward revision to unit labor costs.
For the year 2008, output was revised down in the business and nonfarm business sectors while hours were not revised, resulting in downward revisions to productivity. Similar downward revisions to hourly compensation in these sectors offset the productivity revisions, leaving unit labor costs little changed. In manufacturing, productivity was little changed while hourly compensation and unit labor costs were revised down 1.1 percentage points.
For 2007, output and productivity for the business and nonfarm business sectors were revised up, therefore unit labor costs were revised down. In manufacturing, hourly compensation and unit labor costs were revised up in 2007, and in 2006 these same measures were revised down.
Revised Measures: Nonfinancial Corporations
All measures for nonfinancial corporations were revised historically due to incorporation of the NIPA revision. Output, based on the income side of the NIPA for nonfinancial corporations, was revised down in the first quarter, leading to a corresponding downward revision to productivity (table C). Unit labor costs were revised down as the magnitude of the downward revision to productivity was less than a downward revision to hourly compensation. Unit profits fell 20.5 percent, rather than 7.2 percent as reported June 4. From the first quarter of 2008 through the first quarter of 2009, productivity increased 0.6 percent (table 6).
Output and productivity also were revised down for the year 2008, to increases of 0.4 percent and 1.9 percent, respectively. Because hourly compensation was revised down about the same, unit labor costs increased at the same 1.1 percent rate reported previously. As revised, productivity increased at an average annual rate of 2.3 percent in the nonfinancial corporate sector from 2000 through 2008.
First quarter 2009
Previous -2.1 -12.3 -10.4 6.3 8.8 8.5 -20.5 6.4 Revised. -6.0 -15.9 -10.5 -2.5 -0.2 3.7 -7.2 5.3
Annual average 2008
Previous 2.8 1.3 -1.5 3.9 0.0 1.1 -10.4 0.0 Revised. 1.9 0.4 -1.5 3.0 -0.8 1.1 -16.3 -0.4
Annual average 2007
Previous 0.7 1.4 0.7 4.1 1.2 3.4 -8.8 1.7 Revised. 1.0 1.7 0.7 3.6 0.8 2.6 -9.9 1.7
Annual average 2006
Previous 1.8 4.1 2.2 3.6 0.3 1.8 12.6 3.1 Revised. 1.4 3.7 2.3 2.9 -0.4 1.4 11.7 3.1
Source: U.S. Bureau of Labor Statistics · Original release Aug 11, 2009.
Archived Nov 11, 2026. Source reuse policy. Formatting has been adapted for reading; the source’s conclusions remain attributed to its publisher.