Press Release - PRODUCTIVITY AND COSTS Second Quarter 2016, Revised
Nonfarm business sector labor productivity decreased at a 0.6-percent annual rate during the second quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 1.1 percent and hours worked increased 1.7 percent.
(All quarterly percent changes in this release are seasonally adjusted annual rates.) From the second quarter of 2015 to the second quarter of 2016, productivity decreased 0.4 percent, the first four-quarter decline in the series since a 0.6-percent decline in the second quarter of 2013. (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.
Unit labor costs in the nonfarm business sector increased 4.3 percent in the second quarter of 2016, reflecting a 3.7-percent increase in hourly compensation and a 0.6-percent decline in productivity. Unit labor costs increased 2.6 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.
Manufacturing sector labor productivity decreased 0.4 percent in the second quarter of 2016, as output and hours worked decreased 0.8 percent and 0.4 percent, respectively. Output per hour increased 2.4 percent in the durable goods manufacturing sector reflecting a 0.7-percent increase in output and a 1.8-percent decline in hours worked. Productivity decreased 4.4 percent in the nondurable goods sector in the second quarter of 2016, following a 4.0-percent first-quarter increase. Over the last four quarters, manufacturing productivity increased 0.9 percent, as output increased 0.3 percent and hours declined 0.6 percent. (See tables A, 3, 4, and 5.) Unit labor costs in manufacturing increased 6.7 percent in the second quarter of 2016 and rose 2.5 percent from the same quarter a year ago. Hourly compensation increased 6.3 percent in the second quarter of 2016.
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. (See page 5.)
page source http://www.bls.gov/
