2013 First Quarter (Revised) 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 2013, Revised

Nonfarm business sector labor productivity increased at a 0.5 percent annual rate during the first quarter of 2013, the U.S. Bureau of Labor Statistics reported today. The increase in productivity reflects increases of 2.1 percent in output and 1.6 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2012 to the first quarter of 2013, productivity increased 0.9 percent as output and hours worked increased 2.4 percent and 1.5 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 fell 4.3 percent in the first quarter of 2013, the combined effect of a 3.8 percent decrease in hourly compensation and the 0.5 percent increase in productivity. The decline in hourly compensation is the largest in the series, which begins in 1947. However, over the last four quarters hourly compensation increased 2.0 percent and unit labor costs rose 1.1 percent. (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 increased 3.5 percent in the first quarter of 2013, as output rose 5.3 percent and hours worked increased 1.8 percent. In the durable and nondurable manufacturing sectors, productivity increased 3.5 percent and 3.9 percent, respectively. From the first quarter of 2012 to the first quarter of 2013, manufacturing sector productivity rose 1.6 percent as output grew 2.5 percent and hours rose 0.9 percent. Unit labor costs in manufacturing decreased 10.0 percent in the first quarter of 2013, due to both the 3.5 percent increase in productivity and a 6.9 percent decrease in hourly compensation. Over the last four quarters, hourly compensation increased 4.5 percent and unit labor costs increased 2.8 percent. (See tables A and 3.)

Preliminary first-quarter 2013 measures were announced today for the nonfinancial corporate sector. Productivity increased 0.3 percent in the first quarter as output and hours increased 3.3 percent and 3.0 percent, respectively. Output per hour rose 0.6 percent over the last four quarters. (See tables C and 6.)

The concepts, sources, and methods underlying manufacturing output and nonfinancial corporate output measures 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.

The measures released today are based on more recent source data than were available for the preliminary report. Revisions were also based on corrections to hours worked and related measures for the business and nonfarm business sectors for the first quarter of 2013. (See text box.)

Revised Measures

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

In the first quarter of 2013, nonfarm business productivity growth increased 0.5 percent, down slightly from the preliminary estimate, as output was revised downward more than hours worked. Unit labor costs were revised downward due solely to the large downward revision to hourly compensation. In the business sector, output per hour was revised upward for the first quarter of 2013, due primarily to correction of an hours calculation error. The error principally affected the farm sector, which is part of the business sector. In the manufacturing sector, productivity increased 3.5 percent in first-quarter 2013, slightly less than reported May 2. Manufacturing unit labor costs fell much more than previously reported due to a large downward revision to hourly compensation.

In the fourth quarter of 2012, nonfarm business and business sector productivity were unrevised from the preliminary release May 2. Productivity was revised upward slightly in the manufacturing sector. In contrast to the first-quarter 2013 revisions, large upward revisions to hourly compensation in fourth-quarter 2012 drove large upward revisions to unit labor costs in all sectors.

In the nonfinancial corporate sector, fourth-quarter productivity growth was revised upwards due solely to an upward revision in output; hours were unrevised. (See table C.)

Productivity and Costs Data Corrections

The Productivity and Costs data released on May 2 contained incorrect hours worked and related measures, including labor productivity, for the business and nonfarm business sectors for the first quarter of 2013. Today’s news release incorporates corrected hours data in addition to other source data that have been revised. Preliminary measures will not be re-released.

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, first quarter 2013

Percent change, annual rate, fourth quarter 2012

Percent change, annual rate, first quarter 2013

Percent change, annual rate, fourth quarter 2012