2015 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 2015, Preliminary

Nonfarm business sector labor productivity decreased at a 1.9 percent annual rate during the first quarter of 2015, the U.S. Bureau of Labor Statistics reported today, as output declined 0.2 percent and hours worked increased 1.7 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The decline in productivity follows a decline of 2.1 percent in the fourth quarter of 2014. From the first quarter of 2014 to the first quarter of 2015, productivity increased 0.6 percent, reflecting increases in output and hours worked of 3.5 percent and 2.9 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 the nonfarm business sector increased 5.0 percent in the first quarter of 2015, reflecting a 3.1 percent increase in hourly compensation and a 1.9 percent decline in productivity. Unit labor costs increased 1.1 percent over the last four quarters. (See tables A and 2.)

BLS calculates 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 decreased 1.1 percent in the first quarter of 2015, as output decreased 1.2 percent and hours worked edged down 0.1 percent. Productivity decreased 2.3 percent in the durable manufacturing sector and was unchanged in the nondurable manufacturing sector. (See tables A, 3, 4, and 5.) Over the last four quarters, manufacturing productivity increased 1.4 percent, as output increased 3.8 percent and hours increased 2.3 percent. Unit labor costs in manufacturing increased 2.7 percent in the first quarter of 2015 and decreased 0.7 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 fourth quarter and annual 2014 measures were announced today for the nonfinancial corporate sector. Productivity increased 2.5 percent in the fourth quarter of 2014 and increased 1.5 percent over the last four quarters. Annual average productivity increased 0.4 percent from 2013 to 2014. (See tables C and 6.)

Revised measures

Measures of real hourly compensation for all sectors were subject to revision from 1978 forward due to incorporation of new and revised data from the BLS Office of Prices and Living Conditions.

In the fourth quarter of 2014, nonfarm business sector productivity decreased 2.1 percent, a slightly smaller decline than reported March 5. Unit labor costs increased 4.2 percent in the fourth quarter of 2014, a slightly larger increase than previously reported. Total manufacturing sector productivity and unit labor costs were unrevised in the fourth quarter. There were revisions to measures for the durable and nondurable manufacturing sectors. (See table B.)

2014 Annual Average measures for productivity and unit labor costs were unrevised in the nonfarm business sector and total manufacturing sector. (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