2013 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 2013, Preliminary

Nonfarm business sector labor productivity increased at a 1.9 percent annual rate during the third quarter of 2013, the U.S. Bureau of Labor Statistics reported today. The increase in productivity reflects increases of 3.7 percent in output and 1.7 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2012 to the third quarter of 2013, productivity was unchanged as a 1.8 percent increase in output was matched by a 1.8 percent increase in hours worked. (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 decreased 0.6 percent in the third quarter of 2013, while hourly compensation increased 1.3 percent. Unit labor costs rose 1.9 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 0.4 percent in the third quarter of 2013, as output and hours worked increased 1.3 percent and 0.8 percent, respectively. Productivity increased 1.2 percent in the durable goods sector and decreased 0.1 percent in the nondurable goods sector. Over the last four quarters, manufacturing productivity increased 2.3 percent, as output increased 2.3 percent and hours edged up 0.1 percent. Unit labor costs in manufacturing rose 1.3 percent in the third quarter of 2013 and were unchanged from the same quarter a year ago. (See tables A and 3.)

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

Output and related measures, including productivity, in the business and nonfarm business sectors were revised historically to incorporate the correction to National Income and Product Accounts data announced on November 1, 2013 by the Bureau of Economic Analysis of the U.S. Department of Commerce. No other sectors were affected. Full historical annual and quarterly measures can be found on the productivity and costs homepage http://www.bls.gov/lpc/#data.

Revised and previous measures for the second quarter of 2013 are shown in tables B and C and cover the following major sectors: nonfarm business, business, manufacturing and nonfinancial corporations.

In the second quarter of 2013, nonfarm business productivity increased 1.8 percent, rather than 2.3 percent as reported September 5. The revised figure reflects a downward revision to output. Unit labor costs increased 0.5 percent, an upward revision due to the downward revision to productivity. In the manufacturing sector, productivity growth was revised up to 2.7 percent due to both the upward revision to output and a small downward revision to hours. Unit labor costs increased 1.5 percent, a smaller increase than previously reported.

Second-quarter 2013 measures of productivity and costs were revised for the nonfinancial corporate sector. Productivity increased 2.4 percent rather than the 3.2 percent preliminary estimate. (See table C.)

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