Productivity and Costs, Second Quarter 2015, Revised



Transmission of material in this release is embargoed until        USDL 15-1695
8:30 a.m. (EDT) Wednesday, September 2, 2015

Technical information: (202) 691-5606    dprweb@bls.gov  www.bls.gov/lpc
Media contact:         (202) 691-5902    PressOffice@bls.gov




                            PRODUCTIVITY AND COSTS
                         Second Quarter 2015, Revised




Nonfarm business sector labor productivity increased at a 3.3-percent annual 
rate during the second quarter of 2015, the U.S. Bureau of Labor Statistics 
reported today, as output increased 4.7 percent and hours worked increased 
1.4 percent. (All quarterly percent changes in this release are seasonally 
adjusted annual rates.) From the second quarter of 2014 to the second quarter 
of 2015, productivity increased 0.7 percent, reflecting increases in output 
and hours worked of 3.3 percent and 2.6 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. The measures released today are based 
on more recent source data than were available for the preliminary report.

Unit labor costs in the nonfarm business sector decreased 1.4 percent in the 
second quarter of 2015, reflecting a 1.8-percent increase in hourly 
compensation and a 3.3-percent increase in productivity. Unit labor costs 
increased 1.7 percent over the last four quarters. (See 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 increased 2.3 percent in the second 
quarter of 2015, as output increased 1.3 percent, and hours worked decreased 
0.9 percent. Productivity increased 2.8 percent in the durable manufacturing 
sector and 1.2 percent in the nondurable goods sector. (See tables A, 3, 4, 
and 5.) Over the last four quarters, manufacturing productivity increased 1.0 
percent, as output increased 2.3 percent, and hours increased 1.2 percent. 
Unit labor costs in manufacturing decreased 2.2 percent in the second quarter 
of 2015 and increased 0.2 percent from the same quarter a year ago. (See 
tables A and 3.)

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.

Preliminary second quarter 2015 measures of productivity and costs were 
announced for the nonfinancial corporate sector. Productivity decreased 0.6 
percent in the second quarter of 2015, as output decreased 0.2 percent, and 
hours worked increased 0.3 percent. Unit labor costs increased 2.8 percent, 
reflecting both a 2.2 percent increase in hourly compensation and a 0.6 
percent decrease in productivity. (See tables C and 6.)

Revised measures

The measures released today are based on more recent source data than were 
available for the preliminary report. Table B presents previous and revised 
productivity and related measures for the major sectors: nonfarm business, 
business, and manufacturing. 

In the second quarter of 2015, nonfarm business productivity growth was 
revised up to 3.3 percent from 1.3 percent, mainly due to a 1.9-percentage 
point upward revision to output; hours were revised down slightly. The 3.3-
percent increase in labor productivity reverses the declines in the measure 
during the previous two quarters, restoring the index of output per hour to 
its third quarter 2014 level. Unit labor costs declined 1.4 percent rather 
than increasing 0.5 percent as reported August 11, due to an upward 
revision to productivity; hourly compensation was not revised. In the 
manufacturing sector, productivity growth was revised down slightly to 2.3 
percent from the preliminary estimate of 2.5 percent. Unit labor costs 
decreased at a 2.2-percent rate, a slightly smaller decline than was 
previously reported.

In the first quarter of 2015, nonfarm business productivity decreased at the 
same 1.1-percent rate reported in the preliminary estimate. Hourly 
compensation, and therefore unit labor costs, increased more than previously 
reported. Manufacturing sector productivity was also unrevised, decreasing 
0.6 percent. Hourly compensation and unit labor costs were revised downward.

In the nonfinancial corporate sector, first quarter 2015 productivity was not 
revised. (See table C.)

Full historical annual and quarterly measures can be found on the 
productivity and costs home page: www.bls.gov/lpc/#data.
______________







The preliminary Productivity and Costs news release for third quarter 2015 is 
scheduled to be released on Thursday, November 5, 2015 at 8:30 a.m. (EST).






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Table A. Revised second-quarter 2015 measures: percent change from previous quarter at annual rate 
(Q to Q) and from same quarter a year ago (Y to Y)

Sector                    Nonfarm                                        Durable         Nondurable
                          Business         Business      Manufacturing   Manufacturing   Manufacturing
                       Q to Q   Y to Y  Q to Q  Y to Y  Q to Q  Y to Y  Q to Q  Y to Y  Q to Q  Y to Y
------------------------------------------------------------------------------------------------------
Labor productivity       3.3      0.7     3.5     0.6     2.3     1.0     2.8     1.0     1.2     1.0
Output                   4.7      3.3     4.6     3.3     1.3     2.3     1.2     2.2     1.4     2.3
Hours worked             1.4      2.6     1.1     2.8    -0.9     1.2    -1.6     1.2     0.2     1.3
Hourly compensation      1.8      2.5     2.1     2.2     0.1     1.2    -0.1     0.9     0.5     1.7
Real hourly 
 compensation           -1.1      2.4    -0.8     2.2    -2.8     1.1    -3.0     0.8    -2.4     1.7
Unit labor costs        -1.4      1.7    -1.3     1.7    -2.2     0.2    -2.9    -0.1    -0.7     0.7
======================================================================================================
Table B. Revised and previous measures: second quarter and first quarter 2015

Sector            Nonfarm                                             Durable           Nondurable
                  Business         Business         Manufacturing     Manufacturing     Manufacturing
              Revised Previous  Revised Previous  Revised Previous  Revised Previous  Revised Previous
------------------------------------------------------------------------------------------------------
                                   Percent change, annual rate, second quarter 2015
Labor 
 productivity    3.3     1.3      3.5      1.7      2.3      2.5      2.8      3.4      1.2      1.2
Output           4.7     2.8      4.6      2.8      1.3      1.5      1.2      1.7      1.4      1.3
Hours worked     1.4     1.5      1.1      1.1     -0.9     -1.0     -1.6     -1.6      0.2      0.1
Hourly
 compensation    1.8     1.8      2.1      2.1      0.1      0.2     -0.1      0.0      0.5      0.5
Real hourly
 compensation   -1.1    -1.1     -0.8     -0.8     -2.8     -2.7     -3.0     -2.9     -2.4     -2.4
Unit labor
 costs          -1.4     0.5     -1.3      0.5     -2.2     -2.3     -2.9     -3.3     -0.7     -0.6
------------------------------------------------------------------------------------------------------
                                  Percent change, annual rate, first quarter 2015                     
Labor
 productivity   -1.1    -1.1     -1.3     -1.3     -0.6     -0.6     -2.3     -2.2      1.2      1.2
Output           0.5     0.5      0.6      0.6     -0.5     -0.5     -2.4     -2.3      1.7      1.6
Hours worked     1.6     1.6      1.9      1.9      0.1      0.1     -0.1     -0.1      0.4      0.4
Hourly
 compensation    1.5     1.1      1.3      0.9     -2.2     -1.7     -3.4     -2.9      0.2      0.5
Real hourly
 compensation    4.6     4.2      4.4      4.0      0.8      1.3     -0.4      0.1      3.2      3.6
Unit labor
 costs           2.6     2.3      2.6      2.3     -1.6     -1.1     -1.1     -0.6     -1.1     -0.6
======================================================================================================
Table C. Nonfinancial corporations: preliminary second-quarter and revised first-quarter 2015 
productivity and cost measures

                                                          Real 
               Labor                         Hourly       hourly       Unit                   Implicit
               produc-             Hours     compen-      compen-      labor      Unit        price
               tivity    Output    worked    sation       sation       costs      profits     deflator
------------------------------------------------------------------------------------------------------
                                    Percent change, annual rate, second quarter 2015
                                    
Q to Q          -0.6      -0.2      0.3        2.2        -0.7          2.8         5.6         2.3
Y to Y           0.8       3.0      2.2        1.4         1.4          0.7        -1.7        -0.2
                                    
                                    Percent change, annual rate, first quarter 2015
                                    
Q to Q Revised  -2.1      -0.3      1.8        0.5         3.6          2.6       -19.3        -0.8
Q to Q Previous -2.1      -0.4      1.8        0.4         3.5          2.6       -19.3        -0.8
======================================================================================================






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Last Modified Date: September 02, 2015