News Release - PRODUCTIVITY AND COSTS First Quarter 2016, Revised
Nonfarm business sector labor productivity decreased at a 0.6-percent annual rate during the first quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 0.9 percent and hours worked increased 1.5 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.)
From the first quarter of 2015 to the first quarter of 2016, productivity increased 0.7 percent. (See chart 1 and 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. Measures released today were based on more recent source data than were available for the preliminary report.
Unit labor costs in the nonfarm business sector increased 4.5 percent in the first quarter of 2016, reflecting a 3.9-percent increase in hourly compensation and a 0.6-percent decline in productivity. Unit labor costs increased 3.0 percent over the last four quarters. (See chart 2 and 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.
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