2024 Fourth 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.

Fourth Quarter and Annual Averages 2024, Revised

Nonfarm business sector labor productivity increased 1.5 percent in the fourth quarter of 2024, the U.S. Bureau of Labor Statistics reported today, as output increased 2.4 percent and hours worked increased 0.8 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 2.0 percent in the fourth quarter of 2024. Annual average productivity was revised up 0.4 percentage point to an increase of 2.7 percent from 2023 to 2024. (See tables A1, C1, and 2.)

Unit labor costs in the nonfarm business sector increased 2.2 percent in the fourth quarter of 2024, reflecting a 3.8-percent increase in hourly compensation and a 1.5-percent increase in productivity. Unit labor costs increased 2.0 percent over the last four quarters. (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 0.7 percent in the fourth quarter of 2024, and increased 1.2 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 1.9 percent, reflecting a 2.5-percent rate of growth in output and a 0.6-percent rate of growth in hours worked. The 1.9-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, and is below the long-term rate of 2.1 percent since the first quarter of 1947.

Manufacturing sector labor productivity increased 0.3 percent in the fourth quarter of 2024, as output decreased 1.3 percent and hours worked decreased 1.6 percent. In the durable manufacturing sector, productivity decreased 1.1 percent, reflecting a 3.2-percent decrease in output and a 2.1-percent decrease in hours worked. Nondurable manufacturing sector productivity increased 1.4 percent, as output increased 0.6 percent and hours worked decreased 0.8 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 3.7 percent in the fourth quarter of 2024, reflecting a 4.0-percent increase in hourly compensation and a 0.3-percent increase in productivity. Manufacturing unit labor costs increased 2.0 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 was unchanged (0.0 percent) and hours have declined 0.3 percent. The 0.3-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.

Revised measures

Third quarter, fourth quarter, and annual average data for 2024 were revised to incorporate regular updates of source data on output and compensation published by the Department of Commerce on February 27, 2025. Quarterly measures of real hourly compensation in 2024 were revised to reflect updates to seasonally adjusted data from the BLS Consumer Price Index program released on February 12, 2025.

Quarterly and annual measures of hours worked and related measures--including productivity--were revised historically for all major sectors. The revisions reflect incorporation of revised BLS Current Employment Statistics (CES) program data for employment and hours of employees on nonfarm payrolls. CES revisions extended back to 1990, and links from the current to the previous hours worked methodology implied small revisions to the historical series. Revisions to employment and hours worked from 2020 to 2024 also reflect revised seasonal adjustment of hours worked by nonfarm self-employed and unpaid family workers, all farm workers, and employees of government enterprises. These measures, based on source data from the BLS Current Population Survey (CPS), are seasonally adjusted by the BLS Major Sector Productivity program. Because hours worked were revised for the index base year of 2017, indexes of hours worked, productivity, and related measures were revised back to 1947.

Revised and previously published measures for the fourth quarter of 2024 are shown in table B1 for the business, nonfarm business, and manufacturing sectors. In the fourth quarter of 2024, nonfarm business productivity was revised up 0.3 percentage point to an increase of 1.5 percent. Output was revised up 0.1 percentage point to an increase of 2.4 percent, and hours worked were revised down 0.2 percentage point to an increase of 0.8 percent. Unit labor costs increased 2.2 percent rather than increasing 3.0 percent as previously reported, reflecting a 0.4-percentage point downward revision to hourly compensation and a 0.3-percentage point upward revision to labor productivity.

Manufacturing productivity increased 0.3 percent in the fourth quarter of 2024 rather than increasing 0.8 percent as reported last release. This reflects a 0.3-percentage point downward revision to output and a 0.2-percentage point upward revision to hours worked. A 0.1-percentage point downward revision to hourly compensation and the 0.5-percentage point downward revision to productivity produced a 0.4- percentage point upward revision to unit labor costs, which increased 3.7 percent rather than 3.3 percent as previously reported. Productivity was revised down by 0.1 percentage point in the durable manufacturing sector and down by 0.8 percentage point in the nondurable manufacturing sector. (See table B1.)

In the third quarter of 2024, nonfarm business productivity was revised up to an increase of 2.9 percent due to a 0.6-percentage point downward revision to hours worked; output was not revised. Unit labor costs decreased 1.5 percent rather than increasing 0.5 percent as previously reported, reflecting a 1.6- percentage point downward revision to hourly compensation and the 0.6-percentage point upward revision to productivity. The downward revision to hourly compensation results from a larger downward revision to compensation (-2.1 percentage points) than to hours worked (-0.6 percentage point.)

Manufacturing sector productivity was revised up by 0.2 percentage point in the third quarter of 2024, as durable manufacturing productivity was revised up by 0.1 percentage point and nondurable manufacturing productivity was revised up by 0.5 percentage point. In the total manufacturing sector, unit labor costs were revised up by 1.7 percentage points to an increase of 3.5 percent, reflecting a 3.3- percentage point upward revision to durable manufacturing unit labor costs and a 1.4-percentage point downward revision to nondurable manufacturing unit labor costs. (See table B2.)

Nonfinancial corporate sector productivity increased 2.5 percent in the third quarter of 2024 rather than increasing 3.0 percent as previously reported, reflecting a 1.0-percentage point downward revision to output and a 0.5-percentage point downward revision to hours worked. Unit labor costs were revised down by 0.8 percentage point to a decrease of 1.2 percent. (See table A2.)

Annual averages

Unit labor costs in the nonfarm business sector were revised down 0.3 percentage point to an increase of 2.3 percent in 2024, now reflecting an increase of 5.1 percent in hourly compensation and an increase of 2.7 percent in productivity. Real hourly compensation, which accounts for changes in consumer prices, increased 2.1 percent in 2024.

In the manufacturing sector, productivity increased 0.6 percent in 2024, reflecting decreases of 0.4 percent and 1.0 percent in output and hours worked, respectively.

Manufacturing unit labor costs increased 3.3 percent in 2024, as hourly compensation increased 4.0 percent and productivity increased 0.6 percent. This is a 0.2-percentage point upward revision to manufacturing unit labor costs. Manufacturing real hourly compensation increased 1.0 percent.

Quarterly and annual data for all sectors from 2022 forward appear in tables 1-6. Full historical measures can be found on the Productivity and Costs home page: www.bls.gov/productivity/tables/.

Nondurable Previous quarter 1.4 0.6 -0.8 3.8 0.7 2.4 manufacturing A year ago -0.4 0.8 1.2 2.1 -0.7 2.4