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 For Related News and Information: To chart quarterly changes in non-farm productivity:

PRODUCTIVITY AND COSTS

Third Quarter 2013, Revised

Nonfarm business sector labor productivity increased at a 3.0 percent annual rate during the third quarter of 2013, the U.S. Bureau of Labor Statistics reported today. The increase in productivity reflects increases of 4.7 percent in output and 1.7 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2012 to the third quarter of 2013, productivity increased 0.3 percent as output and hours worked rose 2.1 percent and 1.8 percent, respectively. (See 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 nonfarm businesses decreased 1.4 percent in the third quarter of 2013, while hourly compensation increased 1.6 percent. Unit labor costs rose 2.1 percent over the last four quarters. (See table A.)

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 declined 0.1 percent in the third quarter of 2013, as output and hours worked increased 1.1 percent and 1.2 percent, respectively. Productivity increased 1.1 percent in the durable goods sector and decreased 1.0 percent in the nondurable goods sector. Over the last four quarters, manufacturing productivity increased 2.2 percent, as output increased 2.3 percent and hours edged up 0.1 percent. Unit labor costs in manufacturing grew 1.3 percent in the third quarter of 2013 and declined 0.2 percent from the same quarter a year ago. (See tables A and 3.) Nonfinancial corporate sector productivity decreased 0.7 percent in the third quarter of 2013

The concepts, sources, and methods used for the manufacturing and nonfinancial corporate 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.

Revised measures

The measures released today are based on more recent source data than were available for the preliminary report. Tables B and C present previous and revised productivity and related measures for the major sectors: nonfarm business, business, and manufacturing, as well as nonfinancial corporations.

In the third quarter of 2013, nonfarm business productivity increased 3.0 percent, rather than 1.9 percent as reported November 14; this is the largest increase in the quarterly series since a 4.7 percent gain in the fourth quarter of 2009. The upward revision to productivity reflected a 1.0 percentage point upward revision to output. Unit labor costs were revised down, and decreased 1.4 percent, as the upward revision to productivity was greater than an upward revision to hourly compensation. In the manufacturing sector, productivity declined 0.1 percent rather than increasing 0.4 percent as previously reported, reflecting a downward revision to output and an upward revision to hours worked. Unit labor costs increased 1.3 percent, the same as the preliminary estimate.

In the second quarter of 2013, nonfarm business productivity, output, and hours were unrevised. Unit labor costs increased 2.0 percent, rather than the previous estimate of 0.5 percent, the result of an upward revision to hourly compensation. In the manufacturing sector, output and productivity growth were both revised up by 0.1 percentage point. Unit labor costs increased 0.5 percent, a smaller increase than previously reported, due primarily to a downward revision to hourly compensation.

Second-quarter 2013 measures of productivity and costs were revised for the nonfinancial corporate sector. Productivity increased 3.3 percent rather than 2.4 percent as reported November 14.

The preliminary Productivity and Costs news release for fourth-quarter 2013 is scheduled to be released on Thursday, February 6, 2014 at 8:30 a.m. (EST).

============================================================================== Calendar year 2014 release dates for Productivity and Costs news releases are now available at http://www.bls.gov/schedule/news_release/prod2.htm. ==============================================================================

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