2012 First 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.

First Quarter 2012, Preliminary

Nonfarm business sector labor productivity decreased at a 0.5 percent annual rate during the first quarter of 2012, the U.S. Bureau of Labor Statistics reported today. The decline in productivity reflects increases of 2.7 percent in output and 3.2 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2011 to the first quarter of 2012, productivity increased 0.5 percent as output and hours worked rose 2.8 percent and 2.2 percent, respectively. (See table A.)

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 increased 2.0 percent in the first quarter of 2012, while hourly compensation increased 1.5 percent. Unit labor costs rose 2.1 percent over the last four quarters. (See table A.)

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 rose 5.9 percent in the first quarter of 2012, as output grew 10.8 percent and hours worked increased 4.6 percent. The increases in productivity and output were the largest since the second quarter of 2010. Over the last four quarters, manufacturing sector productivity increased 2.5 percent. Unit labor costs in manufacturing fell 4.2 percent in the first quarter of 2012 and decreased 1.3 percent from the same quarter a year ago. (See tables A and 3.)

Preliminary fourth quarter and annual 2011 measures were announced today for the nonfinancial corporate sector. Productivity increased 3.7 percent in the fourth quarter of 2011, as output grew faster than hours worked. Annual average productivity for the nonfinancial corporate sector increased 0.4 percent in 2011. (See tables C and 6.)

The concepts, sources, and methods used for the manufacturing and nonfinancial corporate output series differ from those used in the business and nonfarm business output series; these output measures are not directly comparable. See Technical Notes for a more detailed explanation.

Revised measures

Revised measures of real hourly compensation for all sectors for 2007 onward reflect revisions in the consumer price series based on new and revised data from the BLS Office of Prices and Living Conditions. Output data measures for the manufacturing sector incorporate historically revised indexes of industrial production published by the Board of Governors of the Federal Reserve System on March 30. Accordingly, manufacturing output, productivity, and unit labor cost measures were revised back to 1987. (See appendix tables 1-3.) Full historical annual and quarterly measures are available on the labor productivity and costs home page: http://www.bls.gov/lpc/#data.

In the fourth quarter of 2011, nonfarm business productivity growth was 1.2 percent, an upward revision due solely to a downward revision to hours worked. Unit labor costs rose 2.7 percent, slightly less than previously reported. Manufacturing productivity rose 0.6 percent in the fourth quarter, rather than declining, reflecting an upward revision to output combined with a slight downward revision to hours worked. (See table B.)

Annual Average measures of productivity and unit labor costs for the nonfarm business sector increased at the same rates from 2010 to 2011 as previously reported. In the manufacturing sector, productivity increased 2.5 percent, slightly less than reported March 7, as output was revised down.(See table B.)

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

Percent change, annual rate, fourth quarter 2011

Percent change, annual average 2011

Percent change, annual rate, fourth quarter 2011

Percent change, annual average 2011