2013 Fourth 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.

Fourth Quarter and Annual Averages 2013, Preliminary

Nonfarm business sector labor productivity increased at a 3.2 percent annual rate during the fourth quarter of 2013, the U.S. Bureau of Labor Statistics reported today. The increase in productivity reflects increases of 4.9 percent in output and 1.7 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the fourth quarter of 2012 to the fourth quarter of 2013, productivity increased 1.7 percent as output and hours worked rose 3.3 percent and 1.6 percent, respectively. (See table A.) Annual average productivity increased 0.6 percent from 2012 to 2013. (See table C.)

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 1.6 percent in the fourth quarter of 2013, as the 3.2 percent increase in productivity was larger than a 1.5 percent increase in hourly compensation. Unit labor costs fell 1.3 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 increased 2.0 percent in the fourth quarter of 2013, as output and hours worked increased 6.6 percent and 4.4 percent, respectively. Productivity increased 3.4 percent in the durable goods sector and increased 1.0 percent in the nondurable goods sector. Over the last four quarters, manufacturing productivity increased 2.1 percent, as output increased 3.3 percent and hours increased 1.2 percent. Unit labor costs in manufacturing fell 1.0 percent in the fourth quarter of 2013 and declined 0.9 percent from the same quarter a year ago. (See tables A and 3.) Nonfinancial corporate sector productivity decreased 0.5 percent in the third quarter of 2013. (See table D.)

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

In the third quarter of 2013, nonfarm business productivity was revised to a 3.6 percent increase due to an upward revision to output; hours were unrevised. (See table B.) Unit labor costs for the nonfarm business sector fell 2.0 percent in the third quarter, a larger decline than previously reported.

In the manufacturing sector, productivity was unrevised in the third quarter of 2013. Manufacturing unit labor costs were revised down slightly, to an increase of 1.2 percent. In the nonfinancial corporate sector, productivity declined 0.5 percent in the third quarter of 2013, a smaller decline than previously reported. (See table D.)

Quarterly and annual data for all sectors from 2011 to 2013 appear in tables 1-6. Full historical measures can be found on the productivity and costs home page at www.bls.gov/lpc/#data.

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

Percent change, annual rate, third quarter 2013