Productivity and Employment Costs at a Glance
- Business Sector Productivity: Up 2.6%
- Nonfarm Business Productivity: Up 1.8%
- Manufacturing Productivity: Up 1.6%
- Durable Goods Manufacturing Productivity: Up 4.7%
- Nondurable Goods Manufacturing Productivity: Down 1.9%
- Business Labor Costs: Up 2.6%
Technorati Tags: productivity, employment costs
PRODUCTIVITY AND COSTS
Second Quarter 2007, Preliminary
The Bureau of Labor Statistics of the U.S. Department of Labor today
reported preliminary productivity data–as measured by output per hour of all
persons–for the second quarter of 2007. The preliminary seasonally adjusted
annual rates of productivity change in the second quarter were:
2.6 percent in the business sector and
1.8 percent in the nonfarm business sector.
These rates of growth are higher than those for the first quarter of 2007,
when productivity increased 0.2 percent in the business sector and 0.7
percent in the nonfarm business sector.
In manufacturing, the preliminary productivity changes in the second
quarter were:
1.6 percent in manufacturing,
4.7 percent in durable goods manufacturing, and
-1.9 percent in nondurable goods manufacturing.
Productivity in the total manufacturing sector grew 1.6 percent in the second
quarter of 2007, as output increased 3.5 percent and hours increased 1.8
percent (seasonally adjusted annual rates). Growth in output and
productivity was concentrated in the durable goods subsector. Output and
hours in manufacturing, which includes about 12 percent of U.S. business-
sector employment, tend to vary more from quarter to quarter than data for
the aggregate business and nonfarm business sectors. Second-quarter measures
are summarized in table A and appear in detail in tables 1 through 5.
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Data in this release reflect the regular multi-year revisions to the national
income and product accounts released by the Bureau of Economic Analysis of
the U.S. Department of Commerce on July 27. The data also incorporate
revised estimates of output in manufacturing and hours in all sectors. See
Revised Measures.
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The data sources and methods used in the preparation of the
manufacturing series differ from those used in preparing the business and
nonfarm business series, and these measures are not directly comparable.
Output measures for business and nonfarm business are based on measures of
gross domestic product prepared by the Bureau of Economic Analysis of the
U.S. Department of Commerce. Quarterly output measures for manufacturing
reflect indexes of industrial production independently prepared by the Board
of Governors of the Federal Reserve System. See Technical Notes for further
information on data sources.
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Table A. Productivity and costs: Preliminary second-quarter 2007 measures
(Seasonally adjusted annual rates)
——————————————————————————
Real
Hourly hourly Unit
Produc- compen- compen- labor
Sector tivity Output Hours sation sation costs
——————————————————————————
Percent change from preceding quarter
Business 2.6 3.8 1.1 5.3 -0.7 2.6
Nonfarm business 1.8 4.2 2.3 3.9 -2.0 2.1
Manufacturing 1.6 3.5 1.8 2.8 -3.0 1.2
Durable 4.7 6.2 1.5 1.5 -4.2 -3.0
Nondurable -1.9 0.3 2.3 5.4 -0.5 7.5
——————————————————————————
Percent change from same quarter a year ago
Business 0.6 1.8 1.2 5.3 2.6 4.7
Nonfarm business 0.6 2.0 1.3 5.2 2.4 4.5
Manufacturing 2.9 1.7 -1.2 6.2 3.4 3.2
Durable 4.5 2.4 -2.0 6.9 4.1 2.3
Nondurable 0.6 1.0 0.4 5.0 2.2 4.3
——————————————————————————
Business
From the first quarter to the second quarter of 2007, business sector
labor productivity increased at a 2.6-percent annual rate. Output increased
3.8 percent and hours of all persons engaged in the sector–employees,
proprietors, and unpaid family workers–rose 1.1 percent (seasonally
adjusted annual rates). As revised, output per hour rose at the same 0.2
percent annual rate as output in the first quarter of 2007, hours worked were
unchanged from the previous quarter (tables 1 and B).
Hourly compensation increased 5.3 percent in the second quarter of 2007,
more than the 3.3 percent gain in the first quarter (seasonally adjusted
annual rates). This measure of compensation includes wages and salaries,
supplements, employer contributions to employee benefit plans, and taxes.
Real hourly compensation, which takes into account changes in consumer
prices, fell 0.7 percent during the second quarter of 2007 as consumer prices
increased 6.0 percent (seasonally adjusted annual rates).
Unit labor costs, which reflect changes in both hourly compensation and
productivity, increased 2.6 percent during the second quarter of 2007 after
rising 3.1 percent in the previous quarter. From the second quarter of 2006
to the second quarter of 2007, these costs increased 4.7 percent–the largest
four-quarter increase since unit labor costs increased 4.8 percent between
the third quarter of 1999 and the third quarter of 2000. The implicit price
deflator for the business sector, which reflects changes in both unit labor
costs and unit nonlabor payments, increased 2.5 percent in the second quarter
and 4.1 percent in the first quarter.
Nonfarm Business
Productivity increased 1.8 percent in the nonfarm business sector during
the second quarter of 2007 as output grew 4.2 percent and hours of all
persons increased 2.3 percent (seasonally adjusted annual rates). Revised
results for first-quarter 2007 show that productivity increased 0.7 percent,
output rose 0.3 percent, and hours declined 0.3 percent (tables 2 and B).
Nonfarm business output per hour had increased at an average annual rate of
2.7 percent from 2000 through 2006.
Hourly compensation in the nonfarm business sector increased 3.9 percent
in the second quarter of 2007, similar to a 3.7-percent rise one quarter
earlier. When the 6.0-percent rise in consumer prices is taken into account,
real hourly compensation fell 2.0 percent in the second quarter of 2007. It
had fallen 0.2 percent in the first quarter.
Unit labor costs increased 2.1 percent in the second quarter of 2007 and
3.0 percent in the first quarter. As in the total business sector, unit
labor costs increased more from the second quarter of 2006 to the second
quarter of 2007, 4.5 percent, than during any four-quarter period since
third-quarter 1999 to third-quarter 2000, when they increased 5.0 percent.
The implicit price deflator for nonfarm business output grew 2.4 percent in
the second quarter, following a 3.6-percent increase in the previous quarter.
Manufacturing
Productivity increased 1.6 percent in manufacturing, as output grew 3.5
percent and hours of all persons increased 1.8 percent (seasonally adjusted
annual rates). All of the second-quarter productivity improvement occurred
in durable goods industries, where productivity rose 4.7 percent, output grew
6.2 percent, and hours of all persons increased 1.5 percent. In nondurable
goods industries, second-quarter productivity fell 1.9 percent reflecting
increases in output of 0.3 percent and in hours of 2.3 percent. In the first
quarter of 2007, total manufacturing productivity rose 1.7 percent,
reflecting a 0.9-percent increase in output and a 0.8-percent decline in
hours (tables 3, 4, and 5).
Hourly compensation of all manufacturing workers grew 2.8 percent during
the second quarter of 2007, reflecting very different growth in the
manufacturing subsectors. In durable goods industries, hourly compensation
rose 1.5 percent, while in non-durable goods industries compensation per hour
grew faster, 5.4 percent. When the increase in consumer prices is taken into
account, the real hourly compensation of all manufacturing workers fell 3.0
percent in the second quarter after increasing 2.8 percent one quarter
earlier.
Unit labor costs in manufacturing rose 1.2 percent in the second quarter
of 2007, showing the combined effect of a 3.0 percent decline in durable
goods industries and a 7.5 percent increase in nondurable goods industries.
Revised Measures
Revised and previous measures for the first quarter of 2007 for the
business, nonfarm business, and manufacturing sectors are compared in table
B. In all sectors, productivity growth was revised down, reflecting both
smaller increases in output and smaller declines in hours than previously
reported. In business and nonfarm business, upward revisions to hourly
compensation combined with the smaller productivity gains to produce upward
revisions to unit labor costs. In manufacturing, hourly compensation
increased slightly less than reported June 6, so the upward revision to unit
labor costs was due solely to the downward revision in productivity growth.
——————————————————————————
Table B. Previous and revised productivity and related measures
Quarterly percent changes at seasonally adjusted annual rates
——————————————————————————
Real
Hourly hourly Unit
Produc- compen- compen- labor
Sector tivity Output Hours sation sation costs
——————————————————————————
First quarter 2007
Business:
Previous 0.5 0.4 -0.1 2.5 -1.4 1.9
Revised 0.2 0.2 0.0 3.3 -0.5 3.1
Nonfarm business:
Previous 1.0 0.6 -0.4 2.8 -1.0 1.8
Revised 0.7 0.3 -0.3 3.7 -0.2 3.0
Manufacturing:
Previous 2.4 1.2 -1.1 6.9 3.0 4.5
Revised 1.7 0.9 -0.8 6.8 2.8 5.0
——————————————————————————
Table C presents previous and revised productivity and related measures
for major sectors for the years 2004, 2005, and 2006. Output data for the
business and nonfarm business sectors, and the compensation series for all
sectors, incorporate the revised national income and product accounts data
released by the Bureau of Economic Analysis, U.S. Department of Commerce, on
July 27. Revisions for these sectors go back to the second quarter of 2001.
Output and productivity growth in the business and nonfarm business
sectors were revised downward in each year from 2004 to 2006. The 1.0-
percent productivity gains in 2006 are small compared to recent years.
Productivity had increased at average annual rates of 3.1 percent in business
and 3.0 percent in nonfarm business from 2000 through 2005. Hourly
compensation was revised down more than productivity in these sectors for the
year 2006, resulting in smaller increases in unit labor costs than reported
in the June 6 release.
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Table C. Previous and revised productivity and related measures
Annual percent changes
——————————————————————————
Real
Hourly hourly Unit
Produc- compen- compen- labor
Sector tivity Output Hours sation sation costs
——————————————————————————
Annual average 2006
Business:
Previous 1.7 3.8 2.1 5.0 1.6 3.2
Revised 1.0 3.1 2.1 3.9 0.6 2.9
Nonfarm business:
Previous 1.6 3.8 2.1 5.0 1.6 3.3
Revised 1.0 3.2 2.2 3.9 0.6 2.9
Manufacturing:
Previous 4.0 5.0 1.0 4.1 0.7 0.1
Revised 4.0 4.9 0.9 2.5 -0.8 -1.5
Annual average 2005
Business:
Previous 2.1 3.7 1.6 4.2 0.8 2.0
Revised 2.0 3.6 1.6 4.0 0.6 2.0
Nonfarm business:
Previous 2.1 3.8 1.6 4.1 0.8 2.0
Revised 1.9 3.6 1.6 4.0 0.7 2.0
Manufacturing:
Previous 4.8 3.6 -1.1 4.7 1.3 -0.1
Revised 4.8 3.5 -1.2 4.2 0.8 -0.6
Annual average 2004
Business:
Previous 3.1 4.4 1.3 3.8 1.1 0.7
Revised 2.9 4.2 1.3 3.7 1.1 0.9
Nonfarm business:
Previous 2.9 4.3 1.4 3.6 0.9 0.7
Revised 2.7 4.1 1.4 3.6 0.9 0.9
Manufacturing:
Previous 1.8 1.3 -0.5 2.0 -0.7 0.2
Revised 2.1 1.8 -0.3 2.0 -0.6 -0.1
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Output data for the manufacturing sector also were revised. Annual
output indexes are constructed by BLS using data from the Bureau of the
Census and the Bureau of Economic Analysis (BEA), both in the U.S. Department
of Commerce, together with information on price changes, primarily from the
Bureau of Labor Statistics.
This release also reports revised data on hours at work and related
measures for the manufacturing, durable manufacturing, and nondurable
manufacturing sectors. The hours revision reflects extension of the
methodology, already used in the business sectors, which utilizes information
on employment and hours by primary and secondary job of self-employed and
unpaid family workers from the BLS Current Population Survey. (See
Construction of Employment and Hours for Self-employed and other Nonfarm
workers and for all Farm workers, using Current Population Survey data for
primary and secondary jobs,” on the productivity and costs home page,
http://www.bls.gov/lpc/home.htm .)
Manufacturing productivity grew 4.8 percent in 2005 and 4.0 percent in
2006, the same as reported June 6. Hourly compensation and unit labor costs
were revised down in both years. For 2004, productivity was revised up to
2.1 percent, as an upward revision to output was partially offset by an
upward revision to hours. Because hourly compensation was not revised for
2004, the larger increase in productivity implied a downward revision to unit
labor costs. The average annual rate of productivity growth in manufacturing
for the 2000 to 2006 period was unchanged at 4.2 percent per year.
Revised quarterly series appear in tables 1-5 and appendix tables 1-5.
Complete annual series for the manufacturing sectors appear in appendix
tables 7 through 9. Links to tables showing the full historical revisions
including the quarterly measures will be posted on the productivity and costs
home page, http://www.bls.gov/lpc/home.htm .
Revised Measures: Nonfinancial Corporations
Productivity and costs measures for the first quarter of 2007 for
nonfinancial corporations also were revised (table D). Increases in
productivity and output were revised down to 0.2 percent and 0.4 percent,
respectively (seasonally adjusted annual rates). Hourly compensation was
revised down by more than productivity, and unit labor costs increased 3.6
percent, rather than 4.1 percent as reported June 6. The change in unit
profits in the first quarter of 2007 was revised up from 6.8 percent to 12.4
percent.
——————————————————————————
Table D. Nonfinancial corporations: Previous and revised productivity and
cost measures
Percent changes at seasonally adjusted annual rates
——————————————————————————
Real
Hourly hourly Unit Implicit
Produc- compen- compen- labor Unit price
tivity Output Hours sation sation costs profits deflator
——————————————————————————
First quarter 2007
Previous 0.6 0.7 0.1 4.7 0.8 4.1 6.8 3.7
Revised 0.2 0.4 0.2 3.8 -0.1 3.6 12.4 3.9
Annual average 2006
Previou 2.5 4.8 2.2 4.8 1.4 2.2 12.2 2.7
Revised 1.3 3.5 2.2 3.5 0.2 2.2 5.0 2.2
Annual average 2005
Previous 2.3 4.0 1.6 4.1 0.8 1.8 12.6 3.3
Revised 1.1 2.7 1.6 3.8 0.5 2.7 7.0 3.3
Annual average 2004
Previous 3.1 4.5 1.4 3.2 0.5 0.1 26.9 2.1
Revised 3.5 4.9 1.4 3.0 0.3 -0.5 32.0 2.1
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Historical data for nonfinancial corporations also were revised due to
incorporation of revised data on output and compensation from the national
income and product accounts.
For the year 2006, output and output per hour were revised down, hourly
compensation was revised down by a similar amount, and unit labor costs
remained unchanged. In 2005, the downward revision to productivity was
larger than that to hourly compensation, and unit labor costs increased more
than reported June 6. The rates of productivity growth in 2005 and 2006, 1.1
percent and 1.3 percent, respectively, are smaller than the 3.3-percent
average annual growth rate from 2000 to 2004. In the year 2004, productivity
growth was revised up along with output. Unit labor costs fell 0.5 percent
rather than rising 0.1 percent. Revised data for nonfinancial corporations
appear in table 6 and appendix table 6.
Next release date
The next release of Productivity and Costs is scheduled for 8:30 a.m.
EDT, Thursday, Sept. 6, 2007. Revised second-quarter measures for business,
nonfarm business, and manufacturing will be released at that time, along with
preliminary measures for nonfinancial corporations.
Productivity and Employment Costs 2nd Quarter 2007 Preliminary Text File
Source: Bureau of Labor Statistics
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