Productivity and Costs, Third Quarter 2017, Preliminary


Transmission of material in this release is embargoed until       USDL 17-1447               
8:30 a.m. (EDT) Thursday, November 2, 2017

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



                                PRODUCTIVITY AND COSTS 
                           Third Quarter 2017, Preliminary

Nonfarm business sector labor productivity increased 3.0 percent during the 
third quarter of 2017, the U.S. Bureau of Labor Statistics reported today, 
as output increased 3.8 percent and hours worked increased 0.8 percent. (All 
quarterly percent changes in this release are seasonally adjusted annual 
rates.) From the third quarter of 2016 to the third quarter of 2017, 
productivity increased 1.5 percent, reflecting a 2.9-percent increase in 
output and a 1.4-percent increase in hours worked. (See tables A1 and 2.) 

Labor productivity, or output per hour, is calculated by dividing an index of 
real output by an index of hours worked by all persons, including employees, 
proprietors, and unpaid family workers. 

Unit labor costs in the nonfarm business sector increased 0.5 percent in the 
third quarter of 2017, reflecting a 3.5-percent increase in hourly 
compensation and a 3.0-percent increase in productivity. Unit labor costs 
decreased 0.1 percent over the last four quarters. (See tables A1 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 fell 5.0 percent in the third quarter 
of 2017, as output decreased 2.1 percent and hours worked increased 3.1 
percent. The decrease in manufacturing output per hour is the largest since 
the first quarter of 2009, when the measure fell 16.3 percent. Productivity 
decreased 5.7 percent in the durable goods manufacturing sector and 4.6 
percent in the nondurable goods sector in the third quarter of 2017. Over the 
last four quarters, total manufacturing sector productivity increased 0.1 
percent, as output increased 1.2 percent and hours worked increased 1.1 
percent. (See tables A1, 3, 4 and 5.)  Unit labor costs in manufacturing 
increased 6.2 percent in the third quarter of 2017 and rose 0.7 percent from 
the same quarter a year ago. 

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 the Technical Notes for 
a more detailed explanation. 

Revised measures

Revised and previous measures for the second quarter of 2017 are shown in 
tables A2 and B1, covering the following major sectors: nonfarm business, 
business, manufacturing, and nonfinancial corporations.

In the second quarter of 2017, nonfarm business sector productivity increased 
1.5 percent, the same as reported on September 7; both output and hours were 
revised down 0.1 percentage point. Unit labor costs rose 0.3 percent during 
the second quarter. In the manufacturing sector, productivity was revised up 
0.5 percentage point to an increase of 3.4 percent, due to an upward revision 
to output. Unit labor costs decreased 1.0 percent rather than declining 0.4 
percent as previously reported.

Second-quarter 2017 measures of productivity and costs were revised for the 
nonfinancial corporate sector. Productivity increased 4.4 percent rather than 
4.6 percent as previously reported. Unit labor costs decreased 2.3 percent 
rather than the preliminary estimate of a 2.6-percent decline. (See table 
A2.)

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

______________  

==============================================================================
                Methodology change for manufacturing output
                
Beginning with the Productivity and Costs news release scheduled for December
6, 2017, BLS plans to incorporate source data reflecting a change in 
methodology for estimating manufacturing output. For more information see:
www.bls.gov/mfp/sectoraloutputrevisions.htm.
==============================================================================


The revised Productivity and Costs news release for third-quarter 2017 is 
scheduled to be released on Wednesday, December 6, 2017 at 8:30 a.m. (EST).






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Table A1. Labor productivity growth and related measures - preliminary third-quarter 2017
(percent change from previous quarter at annual rate and from same quarter a year ago)

                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                  Percent change from:    productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business        Previous quarter           3.0          3.8      0.8         3.5           1.5            0.5
                        A year ago                 1.5          2.9      1.4         1.4          -0.6           -0.1
                        
Business                Previous quarter           3.6          3.8      0.1         4.1           2.0            0.4
                        A year ago                 1.5          2.8      1.2         1.6          -0.4            0.0
                        
Manufacturing           Previous quarter          -5.0         -2.1      3.1         0.9          -1.1            6.2
                        A Year ago                 0.1          1.2      1.1         0.8          -1.1            0.7
 Durable
 manufacturing          Previous quarter          -5.7         -3.4      2.5         0.5          -1.4            6.7
                        A year ago                 0.0          0.9      0.9         0.4          -1.5            0.5
 Nondurable
 manufacturing          Previous quarter          -4.6         -0.7      4.1         1.6          -0.4            6.5
                        A year ago                 0.1          1.5      1.4         1.6          -0.4            1.5
=========================================================================================================================
Table A2. Labor productivity growth and related measures  revised and previously published second-quarter 2017 
(percent change from previous quarter at annual rate)


                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                                          productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial          Revised                      4.4          7.5      3.0         2.0           2.3           -2.3
corporate       Previously published               4.6          7.8      3.1         1.9           2.2           -2.6
=========================================================================================================================
Table B1. Labor productivity growth and related measures  revised and previously published second-quarter 2017
(percent change from previous quarter at annual rate) 


                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                                          productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business              Revised              1.5          3.9      2.4         1.8           2.1            0.3
                        Previously published       1.5          4.0      2.5         1.8           2.1            0.2
                        
Business                      Revised              1.4          3.7      2.3         1.9           2.2            0.4
                        Previously published       1.3          3.7      2.4         1.8           2.1            0.5
                        
Manufacturing                 Revised              3.4          2.8     -0.6         2.4           2.7           -1.0
                        Previously published       2.9          2.1     -0.7         2.5           2.8           -0.4

 Durable                      Revised              5.0          2.3     -2.6         3.0           3.4           -1.9
 manufacturing          Previously published       3.8          1.0     -2.7         3.1           3.5           -0.6
                        
 Nondurable                   Revised              0.4          3.3      2.9         1.5           1.9            1.1
 manufacturing          Previously published       0.5          3.4      2.8         1.6           1.9            1.0
=========================================================================================================================

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Last Modified Date: November 02, 2017