2011 Third Quarter (Preliminary) Productivity and Costs

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.

Third Quarter 2011, Preliminary

Nonfarm business sector labor productivity increased at a 3.1 percent annual rate during the third quarter of 2011, the U.S. Bureau of Labor Statistics reported today, with output and hours worked rising 3.8 percent and 0.6 percent, respectively. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2010 to the third quarter of 2011, output increased 2.5 percent as hours rose 1.4 percent, resulting in a 1.1 percent increase in productivity. (See tables A and 2.)

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 2.4 percent in the third quarter of 2011 as the 3.1 percent increase in output per hour outpaced a 0.6 percent rise in hourly compensation. Unit labor costs rose 1.2 percent over the last four quarters, because the increase in hourly compensation was greater than the increase in output per hour. (See tables A and 2.)

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.

Manufacturing sector productivity grew 5.4 percent in the third quarter of 2011, as output rose 4.7 percent and hours decreased 0.8 percent. Productivity jumped 9.9 percent in the durable goods sector and increased 0.7 percent in the nondurable goods sector. (See tables A, 3, 4, and 5.) From the third quarter of 2010 to the third quarter of 2011, manufacturing sector productivity increased 3.0 percent. Unit labor costs in manufacturing fell 4.6 percent in the third quarter of 2011 and decreased 0.5 percent over the last four quarters.

The data sources and methods used in the preparation of the manufacturing output series differ from those used in preparing the business and nonfarm business output series, and these measures are not directly comparable. See Technical Notes for further information on data sources.

Revised Measures

Tables B and C present previous and revised productivity and related measures for the major sectors: nonfarm business, business, manufacturing and nonfinancial corporations.

In the second quarter of 2011, nonfarm business productivity decreased 0.1 percent, rather than 0.7 percent, as a result of an upward revision to output. The downward revision in unit labor costs to 2.8 percent was due to the revised productivity measure. In the manufacturing sector, productivity growth declined 2.3 percent, more than reported September 1, due solely to a downward revision to output. Unit labor costs increased 5.5 percent, more than previously reported.

Nonfinancial corporate sector productivity grew 4.2 percent in the second quarter of 2011, as revised. (See tables C and 6.)

Sector Nonfarm Durable Nondurable Business Business Manufacturing Manufacturing Manufacturing Q to Q Y to Y Q to Q Y to Y Q to Q Y to Y Q to Q Y to Y Q to Q Y to Y

Sector Nonfarm Durable Nondurable Business Business Manufacturing Manufacturing Manufacturing Revised Previous Revised Previous Revised Previous Revised Previous Revised Previous