U.S. Third Quarter Productivity and Cost Report (Text)
The following is the text of the U.S. productivity and costs report for the third quarter released by the Labor Department.
Nonfarm business sector labor productivity increased at a 3.1 percent annual rate during the third quarter of 2011, the U.S. Bureau of Labor Statistics reported today, with output and hours worked rising 3.8 percent and 0.6 percent, respectively. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2010 to the third quarter of 2011, output increased 2.5 percent as hours rose 1.4 percent, resulting in a 1.1 percent increase in productivity.
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 nonfarm businesses fell 2.4 percent in the third quarter of 2011 as the 3.1 percent increase in output per hour outpaced a 0.6 percent rise in hourly compensation. Unit labor costs rose 1.2 percent over the last four quarters, because the increase in hourly compensation was greater than the increase in output per hour
BLS defines 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 productivity grew 5.4 percent in the third quarter of 2011, as output rose 4.7 percent and hours decreased 0.8 percent. Productivity jumped 9.9 percent in the durable goods sector and increased 0.7 percent in the nondurable goods sector. From the third quarter of 2010 to the third quarter of 2011, manufacturing sector productivity increased 3.0 percent. Unit labor costs in manufacturing fell 4.6 percent in the third quarter of 2011 and decreased 0.5 percent over the last four quarters.
The data sources and methods used in the preparation of the manufacturing output series differ from those used in preparing the business and nonfarm business output series, and these measures are not directly comparable. See Technical Notes for further information on data sources.
Tables B and C present previous and revised productivity and related measures for the major sectors: nonfarm business, business, manufacturing and nonfinancial corporations.
In the second quarter of 2011, nonfarm business productivity decreased 0.1 percent, rather than 0.7 percent, as a result of an upward revision to output. The downward revision in unit labor costs to 2.8 percent was due to the revised productivity measure. In the manufacturing sector, productivity growth declined 2.3 percent, more than reported September 1, due solely to a downward revision to output. Unit labor costs increased 5.5 percent, more than previously reported.
Nonfinancial corporate sector productivity grew 4.2 percent in the second quarter of 2011, as revised.
The revised Productivity and Costs press release for the third quarter of 2011 is scheduled to be released on Wednesday, November 30, 2011 at 8:30 a.m. (EST).
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