March 6 (Bloomberg) -- The following is the text of the revised U.S. productivity and costs report for the fourth quarter released by the Bureau of Labor Statistics.
Nonfarm business sector labor productivity increased at a 1.8 percent annual rate during the fourth quarter of 2013, the U.S. Bureau of Labor Statistics reported today. The increase in productivity reflects increases of 3.4 percent in output and 1.6 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the fourth quarter of 2012 to the fourth quarter of 2013, productivity increased 1.3 percent as output and hours worked rose 2.9 percent and 1.7 percent, respectively. Annual average productivity increased 0.5 percent from 2012 to 2013.
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. The measures released today are based on more recent source data than were available for the preliminary report.
Unit labor costs in nonfarm businesses decreased 0.1 percent in the fourth quarter of 2013, while hourly compensation increased 1.7 percent. Unit labor costs fell 0.9 percent over the last four quarters.
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.
============================================================================== Data in this release reflect the annual benchmark revision of BLS Current Employment Statistics program data on nonfarm employment and hours, and the revised seasonal adjustment of those data. More detail can be found in tables 1 through 6 and appendix tables 1 through 6. See Revised measures. ==============================================================================
Manufacturing sector productivity increased 1.3 percent in the fourth quarter of 2013, as output increased 5.0 percent and hours worked increased 3.6 percent. Productivity increased 3.0 percent in the durable goods sector and decreased 0.1 percent in the nondurable goods sector. Over the last four quarters, manufacturing productivity increased 1.9 percent, as output increased 3.0 percent and hours increased 1.1 percent. Unit labor costs in manufacturing decreased 0.1 percent in the fourth quarter of 2013 and declined 1.0 percent from the same quarter a year ago.
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 Technical Notes for a more detailed explanation.
Quarterly and annual measures of hours and related series--including productivity-- were revised back to 1979 for the business, nonfarm business, and nonfinancial corporate sectors and back to 1990 for the manufacturing sector. The revisions incorporate revised Current Employment Statistics (CES) program data published February 7, 2014. From 2009 forward the data were subject to revision as a result of annual benchmarking of CES data and revised seasonal adjustment of those data. Prior to 2009 there were small revisions due to the reclassification of some industries. Index measures related to hours show full historical revisions because the 2009 base year values were revised; resulting revisions to percent changes are small. Third quarter, fourth quarter, and annual average data for 2013 were also revised for regular updates of source data on output and compensation.
Revised and previous measures for the third and fourth quarters of 2013 are shown in table B for the business, nonfarm business, and manufacturing sectors. Revised annual average measures for 2009 to 2013 are shown in table C for the nonfarm business and manufacturing sectors. Revised third quarter measures for the nonfinancial corporate sector are shown in table D. Quarterly and annual data for all sectors appear in tables 1-6 for 2011 through 2013 and in appendix tables 1-6 for 2008 through 2010. Full historical annual and quarterly measures can be found on the labor productivity and costs home page at http://www.bls.gov/lpc/#data.
In the fourth quarter of 2013, nonfarm business productivity increased 1.8 percent rather than 3.2 percent as reported February 6. The revised figure reflects a 1.5 percentage point downward revision to output and a 0.1 percentage point downward revision to hours. Unit labor costs decreased 0.1 percent, a smaller decline than was previously reported. Manufacturing productivity growth was revised downward, to 1.3 percent, reflecting a downward revision to output that was larger than a downward revision to hours. Due to both the downward revision to productivity and an upward revision to hourly compensation, manufacturing unit labor costs decreased 0.1 percent, rather than falling 1.0 percent as reported in the preliminary release.
In the third quarter of 2013, nonfarm business productivity growth was little changed, at 3.5 percent, reflecting a slight upward revision to hours. Unit labor costs decreased 2.1 percent, as revised. In the manufacturing sector, productivity increased 0.2 percent rather than falling 0.1 percent as previously reported. The combination of the upward revision to productivity and a downward revision to compensation per hour resulted in a smaller increase in manufacturing unit labor costs than previously reported. (See table B.) Nonfinancial corporate sector productivity decreased 0.7 percent in the third quarter of 2013.
When the annual average indexes of output per hour are compared, nonfarm business sector productivity rose 0.5 percent from 2012 to 2013. Since 2010, productivity has increased at an average annual rate of 0.8 percent, reflecting average annual growth rates of 2.8 percent in output and 2.0 percent in hours worked. In contrast, output per hour had increased 3.3 percent in 2010 as output increased 3.2 percent and hours declined 0.1 percent. In 2009, marked by the trough of the most recent recession, productivity grew 3.1 percent as output fell 4.3 percent and hours fell faster, 7.2 percent. Unit labor costs rose 1.1 percent from 2012 to 2013, similar to the 1.2 percent increase in the previous year.
In the manufacturing sector, annual average productivity growth was revised down to 1.8 percent in 2013, the same rate as in 2012. Productivity growth over the last three years of 1.5 percent per year on average reflected annual average rates of growth in output and hours of 3.2 percent and 1.7 percent, respectively. Manufacturing unit labor costs fell 0.9 percent in 2013 as the 1.8 percent increase in productivity was greater than the 0.9 percent increase in compensation per hour. The gain in hourly compensation was the smallest in the annual series which extends back to 1988.
The preliminary Productivity and Costs news release for first-quarter 2014 is scheduled to be released on Wednesday, May 7, 2014 at 8:30 a.m. (EDT).