2024 Second 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.

Second Quarter 2024, Revised

Nonfarm business sector labor productivity increased 2.5 percent in the second quarter of 2024, the U.S. Bureau of Labor Statistics reported today, as output increased 3.5 percent and hours worked increased 1.0 percent. (All quarterly percent changes in this release are seasonally adjusted annualized rates.) From the same quarter a year ago, nonfarm business sector labor productivity increased 2.7 percent. (See table A1.)

Unit labor costs in the nonfarm business sector increased 0.4 percent in the second quarter of 2024, reflecting a 3.0-percent increase in hourly compensation and a 2.5-percent increase in productivity. Unit labor costs increased 0.3 percent over the last four quarters, the lowest rate since the fourth quarter of 2013, when the measure decreased 2.2 percent. (See tables A1 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 productivity tend to reduce them. Real hourly compensation, which takes into account consumer prices, increased 0.1 percent in the second quarter of 2024 and decreased 0.1 percent over the last four quarters.

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all workers, including employees, proprietors, and unpaid family workers. During the current business cycle, starting in the fourth quarter of 2019, labor productivity has grown at an annualized rate of 1.6 percent, reflecting a 2.2-percent rate of growth in output and a 0.7-percent rate of growth in hours worked. The 1.6-percent annualized rate of productivity growth in the current business cycle thus far is slightly above the 1.5-percent rate of the previous business cycle from the fourth quarter of 2007 through the fourth quarter of 2019, and is below the long-term rate of 2.1 percent since the first quarter of 1947.

Manufacturing sector labor productivity increased 1.3 percent in the second quarter of 2024, as output increased 2.4 percent and hours worked increased 1.1 percent. In the durable manufacturing sector, productivity increased 0.4 percent, reflecting a 1.7-percent increase in output and a 1.3-percent increase in hours worked. Nondurable manufacturing sector productivity increased 2.3 percent as output increased 3.2 percent and hours worked increased 0.9 percent. Total manufacturing sector productivity increased 0.4 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)

Unit labor costs in the total manufacturing sector increased 3.6 percent in the second quarter of 2024, reflecting a 4.9-percent increase in hourly compensation and a 1.3-percent increase in productivity. Manufacturing unit labor costs increased 4.3 percent from the same quarter a year ago, reflecting an increase of 4.7 percent in hourly compensation and an increase of 0.4 percent in labor productivity. Real hourly compensation increased 1.4 percent from the same quarter a year ago. (See tables A1 and 3.)

Manufacturing sector labor productivity has grown at an annualized rate of 0.3 percent during the current business cycle, as output has grown 0.2 percent and hours have declined 0.1 percent. The 0.3- percent annualized rate of productivity growth in the current business cycle thus far is above the 0.0- percent rate of the previous business cycle from the fourth quarter of 2007 through the fourth quarter of 2019, and is below the long-term rate of 2.1 percent since the first quarter of 1987.

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 the Technical Notes for a more detailed explanation.

Preliminary measures for the second quarter of 2024 were announced today for the nonfinancial corporate sector. Productivity decreased 0.3 percent in the second quarter of 2024 as output increased 1.4 percent and hours worked increased 1.6 percent. Productivity increased 2.7 percent over the last four quarters. Unit profits of nonfinancial corporations increased at a 3.7-percent annual rate in the second quarter of 2024 and increased 2.7 percent over the last four quarters. (See table 6.)

Revised measures

Measures released today are based on more recent source data than were available for the preliminary report; they reflect regular updates of source data from the BLS, the Bureau of Economic Analysis (BEA), and the Board of Governors of the Federal Reserve System.

In the second quarter of 2024, nonfarm business sector productivity increased 2.5 percent--a 0.2- percentage point upward revision from the preliminary estimate of a 2.3-percent increase--reflecting a 0.2-percentage point upward revision to output; hours were not revised. From the same quarter a year ago, nonfarm business sector labor productivity was not revised, and increased 2.7 percent as previously reported. Unit labor costs increased 0.4 percent in the second quarter of 2024 rather than increasing 0.9 percent as previously reported, reflecting a 0.3-percentage point downward revision to hourly compensation and a 0.2-percentage point upward revision to productivity.

Manufacturing sector productivity for the second quarter of 2024 was revised down to an increase of 1.3 percent from a previously reported increase of 1.8 percent, reflecting a 1.0-percentage point downward revision to output and a 0.5-percentage point downward revision to hours worked. Nondurable manufacturing sector productivity had a 1.2-percentage point downward revision to an increase of 2.3 percent; durable manufacturing sector productivity was not revised, increasing 0.4 percent as previously reported. Total manufacturing unit labor costs increased 3.6 percent in the second quarter of 2024, reflecting a 0.4-percentage point upward revision.

In the first quarter of 2024, nonfarm business sector productivity and unit labor costs were not revised. Manufacturing sector productivity was revised up 0.4 percentage point to a decrease of 0.7 percent. As a result, unit labor costs were revised down 0.4 percentage point to an increase of 3.9 percent. (See table 6.)

Quarterly and annual data for all sectors for recent years appear in tables 1-6. Full historical annual and quarterly measures can be found at www.bls.gov/productivity/tables/.

Durable Previous quarter 0.4 1.7 1.3 4.4 1.6 4.0 manufacturing A year ago -0.6 -0.4 0.2 4.9 1.7 5.5

Nondurable Previous quarter 2.3 3.2 0.9 5.9 2.9 3.5 manufacturing A year ago 1.9 0.2 -1.6 4.0 0.8 2.1

Nonfinancial Previous quarter -0.3 1.4 1.6 2.8 0.0 3.1 corporate A year ago 2.7 3.6 0.8 3.3 0.1 0.6