2015 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 2015, Revised

Nonfarm business sector labor productivity decreased at a 3.1 percent annual rate during the first quarter of 2015, the U.S. Bureau of Labor Statistics reported today, as output declined 1.6 percent and hours worked increased 1.6 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 0.3 percent, reflecting increases in output and hours worked of 3.2 percent and 2.8 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 the nonfarm business sector increased 6.7 percent in the first quarter of 2015, reflecting a 3.3 percent increase in hourly compensation and a 3.1 percent decline in productivity. Unit labor costs increased 1.8 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 labor productivity decreased 1.0 percent in the first quarter of 2015, as output decreased 1.1 percent and hours worked edged down 0.1 percent. Productivity decreased 3.3 percent in the durable manufacturing sector and increased 1.5 percent in the nondurable goods sector. (See tables A, 3, 4, and 5.) Over the last four quarters, manufacturing productivity increased 1.5 percent, as output increased 3.8 percent and hours increased 2.3 percent. Unit labor costs in manufacturing increased 3.4 percent in the first quarter of 2015 and increased 0.2 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 2015 measures were announced today for the nonfinancial corporate sector. Productivity decreased 1.2 percent in the first quarter of 2015 and increased 1.7 percent over the last four quarters. (See tables C and 6.)

Revised measures

In the first quarter of 2015, nonfarm business productivity fell 3.1 percent, a greater decline than was reported in the preliminary estimate. The revised estimate reflects a 1.4 percentage point downward revision to output and a small downward revision to hours. Unit labor costs were revised up as the result of a 1.2 percentage point downward revision to productivity and a 0.2 percentage point upward revision to hourly compensation. In the manufacturing sector, productivity in the first quarter declined 1.0 percent, slightly less than the preliminary estimate. Unit labor costs increased 3.4 percent, rather than 2.7 percent as previously reported, due to a 0.9 percentage point upward revision to hourly compensation.

In the fourth quarter of 2014, the 2.1 percent decrease in nonfarm business productivity was unrevised from the May 6 release, while manufacturing productivity was revised slightly up. For both sectors, an upward revision to hourly compensation accounted for the upward revision to unit labor costs.

In the nonfinancial corporate sector, fourth-quarter 2014 productivity increased 3.4 percent, rather than 2.5 percent as previously reported. (See table C.)

Complete annual and quarterly data series can be found on the Productivity and Costs home page: 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

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