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First Quarter 2014, Revised
Nonfarm business sector labor productivity decreased at a 3.2 percent annual rate during the first quarter of 2014, the U.S. Bureau of Labor Statistics reported today, as hours increased 2.2 percent and output decreased 1.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The decrease in productivity was the largest since the first quarter of 2008 (-3.9 percent). From the first quarter of 2013 to the first quarter of 2014, productivity increased 1.0 percent as output and hours worked rose 2.8 percent and 1.7 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. The measures released today are based on more recent source data than were available for the preliminary report.
Unit labor costs in nonfarm businesses increased 5.7 percent in the first quarter of 2014, due to both the decline in productivity and a 2.3 percent increase in hourly compensation. Unit labor costs increased 1.2 percent over the last four quarters. (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 increased 3.8 percent in the first quarter of 2014, as output increased 2.2 percent and hours worked decreased 1.6 percent. Productivity increased 4.1 percent in the durable goods sector and increased 3.3 percent in the nondurable goods sector. Over the last four quarters, manufacturing productivity increased 2.3 percent, as output increased 2.5 percent and hours increased 0.2 percent. Unit labor costs in manufacturing decreased 0.4 percent in the first quarter of 2014 and declined 0.5 percent from the same quarter a year ago. (See tables A and 3.)
The concepts, sources, and methods used for the manufacturing 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.
Preliminary first-quarter 2014 measures were announced today for the nonfinancial corporate sector. Productivity decreased 3.9 percent in the first quarter of 2014 and increased 0.1 percent over the last four quarters. (See tables C and 6.)
Revised measures
In the first quarter of 2014, nonfarm business productivity fell 3.2 percent, a greater decline than was reported in the preliminary estimate. The revised figure reflects a 1.4 percentage point downward revision to output and a 0.2 percentage point upward revision to hours. Unit labor costs were revised up due to the downward revision to productivity, and grew 5.7 percent in the first quarter of 2014. In the manufacturing sector, productivity growth in the first quarter was revised up to 3.8 percent, due to an upward revision to output and a downward revision to hours worked. Unit labor costs declined 0.4 percent, rather than increasing 0.1 percent as previously reported.
In the fourth quarter of 2013, nonfarm business and manufacturing productivity were unrevised from the May 7 release. For both sectors, a downward revision in hourly compensation accounted for the similar downward revision to unit labor costs.
In the nonfinancial corporate sector, fourth-quarter productivity growth was unrevised. (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, first quarter 2014
Percent change, annual rate, fourth quarter 2013
Percent change, annual rate, first quarter 2014
Percent change, annual rate, fourth quarter 2013
Source: U.S. Bureau of Labor Statistics · Original release Jun 4, 2014.
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