2024 Third 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.

Third Quarter 2024, Revised

Nonfarm business sector labor productivity increased 2.2 percent in the third quarter of 2024, the U.S. Bureau of Labor Statistics reported today, reflecting no revision from the preliminary estimate. Output and hours worked were also unrevised, increasing 3.5 percent and 1.2 percent respectively. (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 2.0 percent in the third quarter of 2024, as previously reported. (See tables A1 and B1.)

Unit labor costs in the nonfarm business sector were revised down 1.1 percentage points to an increase of 0.8 percent in the third quarter of 2024, reflecting an equivalent downward revision to hourly compensation to an increase of 3.1 percent. Unit labor costs increased 2.2 percent over the last four quarters. (See tables A1, B1, 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 1.8 percent in the third quarter of 2024, and increased 1.6 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 1.8 percent, reflecting a 2.5-percent rate of growth in output and a 0.7-percent rate of growth in hours worked. These rates are not revised from the preliminary third-quarter estimates. The 1.8-percent annualized rate of productivity growth in the current business cycle thus far is higher than the 1.5 percent rate of the previous business cycle from the fourth quarter of 2007 through the fourth quarter of 2019.

Manufacturing sector labor productivity increased 0.9 percent in the third quarter of 2024, a 0.1- percentage point downward revision from the preliminary estimate. This revision reflects a 0.2- percentage point downward revision to output to a decrease of 0.4 percent and a 0.1-percentage point downward revision to hours worked to a decrease of 1.3 percent. In the durable manufacturing sector, productivity increased 0.7 percent, a 0.1-percentage point downward revision from the preliminary estimate. This revision reflects a 0.2-percentage point downward revision to output to a decrease of 2.8 percent and a 0.1-percentage point downward revision to hours worked to a decrease of 3.5 percent. In the nondurable manufacturing sector, productivity was revised down 0.3 percentage point to a decrease of 0.6 percent, reflecting a 0.1-percentage point downward revision to output to an increase of 2.2 percent and a 0.2-percentage point upward revision to hours worked to an increase of 2.8 percent. Total manufacturing sector productivity increased 0.6 percent from the same quarter a year ago. (See tables A1, B1, 3, 4, and 5.)

Unit labor costs in the total manufacturing sector were revised down 3.6 percentage points to an increase of 1.7 percent in the third quarter of 2024, primarily reflecting a 3.8-percentage point downward revision to hourly compensation. Durable manufacturing sector unit labor costs were revised down 4.2 percentage points to an increase of 2.3 percent due primarily to a 4.4-percentage point downward revision to hourly compensation. Unit labor costs in the nondurable manufacturing sector were revised down 2.4 percentage points to an increase of 2.9 percent, primarily reflecting a 2.7- percentage point downward revision to hourly compensation. Manufacturing unit labor costs increased 1.8 percent from the same quarter a year ago. (See tables A1, B1, and 3.)

Manufacturing sector labor productivity has grown at an annualized rate of 0.2 percent during the current business cycle, as output has netted no growth and hours have declined 0.2 percent. The 0.2- percent annualized rate of productivity growth in the current business cycle thus far is above the 0.1- 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 third quarter of 2024 were announced today for the nonfinancial corporate sector. Productivity increased 3.4 percent in the third quarter of 2024 as output increased 4.2 percent and hours worked increased 0.8 percent. Productivity increased 3.9 percent over the last four quarters. Unit profits of nonfinancial corporations increased 0.5 percent in the third quarter of 2024 and increased 1.1 percent over the last four quarters. (See tables A2 and 6.)

Revised measures

The measures released today are based on more recent source data than were available for the preliminary report. Regular updates of source data from the BLS, the Bureau of Economic Analysis (BEA), and the Board of Governors of the Federal Reserve System are reflected in data for the second and third quarters of 2024. Updated compensation data from BEA are reflected in revisions to hourly compensation and unit labor costs; the compensation data incorporate data from the BLS Quarterly Census of Employment and Wages (QCEW) for the second quarter of 2024. Normal updates to QCEW data (described in their Technical Note at https://www.bls.gov/cew/news-release-technical-note.htm) can lead to revisions and the most notable revisions in this release occurred in the manufacturing sectors.

Measures of output for the manufacturing sectors incorporate revised annual benchmark data from 1987 to 2021 released December 4 by BLS. The largest revisions to manufacturing output from the incorporation of these data occurred in 2020, with the highest magnitude being a downward revision of 0.8 percentage point in the first quarter.

The revisions to the third quarter of 2024 cited earlier are reflected in Table B1. Table B2 presents previous and revised productivity and related measures for the business, nonfarm business, manufacturing, and nonfinancial corporate sectors for the second quarter of 2024.

In the nonfarm business sector, labor productivity, output, and hours worked were unrevised for the second quarter of 2024. Unit labor costs decreased 1.1 percent, rather than increasing 2.4 percent as previously reported, due to a 3.6-percentage point downward revision to hourly compensation.

In the manufacturing sector, productivity was revised down 0.1 percentage point to an increase of 0.2 percent for the second quarter of 2024, reflecting the same revision to output; hours worked were unrevised. Unit labor costs were revised down to a decrease of 5.8 percent from the previously-reported increase of 5.8 percent. This revision is mainly due to an 11.8-percentage point downward revision to hourly compensation.

In the nonfinancial corporate sector, productivity was revised down 2.1 percentage points to an increase of 1.0 percent due to a 2.2-percentage point downward revision to output. Unit labor costs were revised down 1.5 percentage points to a decrease of 0.2 percent due to the productivity revision and a 3.8-percentage point downward revision to hourly compensation.

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/.

Calendar year 2025 release dates for Productivity and Costs news releases are now available at www.bls.gov/schedule/news_release/prod2.htm.

Nondurable Previous quarter -0.6 2.2 2.8 2.3 1.1 2.9 manufacturing A year ago 0.7 0.8 0.1 2.6 -0.1 1.9

Nonfinancial Previous quarter 3.4 4.2 0.8 2.7 1.5 -0.6 corporate A year ago 3.9 4.8 0.8 4.7 2.0 0.7