Unit labor costs in manufacturing dropped most in 2006 in Japan

Expressed in U.S. dollars, manufacturing unit labor costs increased in 2006 in ten of sixteen economies under comparison, and declined in six.

[Chart data—TXT]

Japan experienced the largest drop in unit labor costs and Canada experienced the largest rise.

Movements in exchange rates often are the dominant force behind changes in comparative unit labor costs and international competitiveness. In 2006 the U.S. dollar weakened against most of the currencies being compared. The only exceptions were Japan, Australia, and Taiwan, where the currencies depreciated against the dollar.

These data are from the Foreign Labor Statistics program. Data are subject to revision. Additional information is available in "International Comparisons of Manufacturing Productivity and Unit Labor Cost Trends, 2006" (PDF) (TXT), news release USDL 07-1456. Unit labor costs are defined as the cost of labor input required to produce one unit of output. They are computed as labor compensation in nominal terms divided by real output.