Productivity and Costs, First Quarter 2015, Preliminary



Transmission of material in this release is embargoed until        USDL 15-0837      
8:30 a.m. (EDT) Wednesday, May 6, 2015

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                                PRODUCTIVITY AND COSTS
                           First Quarter 2015, Preliminary
                          
                          

Nonfarm business sector labor productivity decreased at a 1.9 percent annual 
rate during the first quarter of 2015, the U.S. Bureau of Labor Statistics 
reported today, as output declined 0.2 percent and hours worked increased 
1.7 percent. (All quarterly percent changes in this release are seasonally 
adjusted annual rates.)  The decline in productivity follows a decline of 
2.1 percent in the fourth quarter of 2014. From the first quarter of 2014 to 
the first quarter of 2015, productivity increased 0.6 percent, reflecting 
increases in output and hours worked of 3.5 percent and 2.9 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.

Unit labor costs in the nonfarm business sector increased 5.0 percent in the 
first quarter of 2015, reflecting a 3.1 percent increase in hourly 
compensation and a 1.9 percent decline in productivity. Unit labor costs 
increased 1.1 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 productivity decreased 1.1 percent in the first quarter 
of 2015, as output decreased 1.2 percent and hours worked edged down 0.1 
percent. Productivity decreased 2.3 percent in the durable manufacturing 
sector and was unchanged in the nondurable manufacturing sector. (See tables 
A, 3, 4, and 5.) Over the last four quarters, manufacturing productivity 
increased 1.4 percent, as output increased 3.8 percent and hours increased 
2.3 percent. Unit labor costs in manufacturing increased 2.7 percent in the 
first quarter of 2015 and decreased 0.7 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 fourth quarter and annual 2014 measures were announced today for 
the nonfinancial corporate sector. Productivity increased 2.5 percent in the 
fourth quarter of 2014 and increased 1.5 percent over the last four quarters.
Annual average productivity increased 0.4 percent from 2013 to 2014. (See 
tables C and 6.) 

Revised measures

Measures of real hourly compensation for all sectors were subject to revision
from 1978 forward due to  incorporation of new and revised data from the BLS
Office of Prices and Living Conditions. 

In the fourth quarter of 2014, nonfarm business sector productivity decreased
2.1 percent, a slightly smaller decline than reported March 5. Unit labor 
costs increased 4.2 percent in the fourth quarter of 2014, a slightly larger
increase than previously reported. Total manufacturing sector productivity 
and unit labor costs were unrevised in the fourth quarter. There were 
revisions to measures for the durable and nondurable manufacturing sectors.
(See table B.) 

2014 Annual Average measures for productivity and unit labor costs were 
unrevised in the nonfarm business sector and total manufacturing sector. 
(See table B.)
______________  







The revised Productivity and Costs news release for first-quarter 2015 is 
scheduled to be released on Thursday, June 4, 2015 at 8:30 a.m. (EDT).






======================================================================================================
Table A. Preliminary first-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
------------------------------------------------------------------------------------------------------ 
Productivity           -1.9      0.6    -1.9     0.5    -1.1     1.4    -2.3     1.4     0.0     1.8
Output                 -0.2      3.5     0.1     3.7    -1.2     3.8    -2.7     4.3     0.5     3.1
Hours                   1.7      2.9     2.1     3.2    -0.1     2.3    -0.4     2.9     0.5     1.3
Hourly 
 compensation           3.1      1.7     2.8     1.4     1.5     0.8     1.3     0.3     2.0     1.5
Real hourly 
 compensation           6.2      1.8     6.0     1.4     4.6     0.8     4.4     0.4     5.2     1.6
Unit labor 
 costs                  5.0      1.1     4.8     0.9     2.7    -0.7     3.7    -1.1     2.0    -0.3
======================================================================================================
Table B. Revised and previous measures: fourth quarter and annual averages 2014

Sector            Nonfarm                                             Durable           Nondurable
                  Business         Business         Manufacturing     Manufacturing     Manufacturing
              Revised Previous  Revised Previous  Revised Previous  Revised Previous  Revised Previous
------------------------------------------------------------------------------------------------------
                                Percent change, annual rate, fourth quarter 2014
Productivity    -2.1    -2.2     -2.3     -2.3     -0.1     -0.1      0.1      0.5     -0.9     -1.5
Output           2.6     2.6      2.8      2.7      4.3      4.3      3.4      3.4      5.3      5.4
Hours            4.9     4.9      5.2      5.2      4.4      4.4      3.3      3.0      6.3      7.0
Hourly
 compensation    1.9     1.9      1.6      1.6      1.4      1.4      1.2      1.8      1.9      1.1
Real hourly 
 compensation    2.8     3.1      2.5      2.8      2.2      2.7      2.0      3.0      2.7      2.4
Unit labor 
 costs           4.2     4.1      4.0      4.0      1.5      1.5      1.1      1.3      2.9      2.7
------------------------------------------------------------------------------------------------------ 
                                      Percent change, annual average 2014
Productivity     0.7     0.7      0.5      0.5      2.2      2.2      3.0      3.0      1.7      1.6
Output           3.0     3.0      2.9      2.9      3.8      3.8      5.3      5.3      2.1      2.2
Hours            2.3     2.3      2.4      2.4      1.6      1.6      2.3      2.3      0.5      0.5
Hourly
 compensation    2.5     2.5      2.3      2.3      2.3      2.3      1.9      1.9      2.9      2.8
Real hourly 
 compensation    0.8     0.8      0.7      0.7      0.6      0.6      0.2      0.3      1.2      1.2
Unit labor 
 costs           1.8     1.8      1.8      1.8      0.1      0.1     -1.1     -1.0      1.2      1.1
======================================================================================================
Table C.  Nonfinancial corporations: preliminary fourth-quarter and annual averages 2014 measures
        
                                                        Real 
                                           Hourly       hourly        Unit                    Implicit
             Produc-                       compen-      compen-       labor       Unit        price
             tivity    Output     Hours    sation       sation        costs       profits     deflator
------------------------------------------------------------------------------------------------------ 
                                Percent change, annual rate, fourth quarter 2014
Q to Q         2.5      6.6        3.9       1.6          2.4         -0.9        -0.8          -1.5
Y to Y         1.5      4.8        3.3       2.2          0.9          0.7         2.9           0.3

                                     Percent change, annual average 2014                        
2014           0.4      3.2        2.8       1.8          0.2          1.4        -0.4           0.6
====================================================================================================== 

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Last Modified Date: May 06, 2015