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Economic News Release
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Productivity and Costs, First Quarter 2020, Preliminary



Transmission of material in this release is embargoed until                                   USDL 20-0814
8:30 a.m. (EDT) Thursday, May 7, 2020

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


                                     PRODUCTIVITY AND COSTS 
                                First Quarter 2020, Preliminary

Nonfarm business sector labor productivity decreased 2.5 percent in the first quarter of 2020, the U.S. 
Bureau of Labor Statistics reported today, as output decreased 6.2 percent and hours worked decreased 
3.8 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the 
first quarter of 2019 to the first quarter of 2020, productivity increased 0.3 percent, reflecting a 0.1-
percent increase in output and a 0.2-percent decrease in hours worked. (See table A1.) 

Unit labor costs in the nonfarm business sector increased 4.8 percent in the first quarter of 2020, as 
hourly compensation increased 2.2 percent and productivity decreased 2.5 percent. Unit labor costs 
increased 1.5 percent over the last four quarters. (See table 2.) 

========================================================================================================
                Coronavirus (COVID-19) impact on First Quarter 2020 Productivity Data

BLS quarterly estimates of labor productivity combine output data with hours worked data based 
primarily on the Current Employment Statistics (CES) survey. The reference period for the CES largely 
predated many of the COVID-19-related job losses that occurred in the latter part of March. To capture 
these job losses, adjustments were made to March employment, based on the Department of Labor’s 
Employment and Training Administration weekly reports of the number of initial claims for 
unemployment insurance benefits. Hours and related measures--including labor productivity--for the 
first quarter of 2020 reflect these adjustments. For more information see www.bls.gov/bls/productivity-
and-costs-adjusting-march-2020-employment-and-hours-to-account-for-effects-of-covid-19.htm.
========================================================================================================

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. 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. 

The 2.5-percent decline in nonfarm business sector labor productivity in the first quarter of 2020 was 
the largest quarterly decline since the fourth quarter of 2015, when output per hour decreased 2.9 
percent. It reflects the largest decline in output since the first quarter of 2009 (-6.5 percent) and the 
largest decline in hours worked since the third quarter of 2009 (-4.4 percent). Productivity had increased 
in 15 of the 16 quarters between fourth-quarter 2015 and first-quarter 2020.

Manufacturing sector labor productivity decreased 3.3 percent in the first quarter of 2020, as output 
decreased 7.1 percent and hours worked decreased 3.9 percent. Total manufacturing sector productivity 
declined 1.7 percent over the last four quarters, as output decreased 2.4 percent and hours worked 
decreased 0.7 percent. (See tables A1 and 3.) Productivity decreased 8.3 percent in the durable 
manufacturing sector in the first quarter of 2020, reflecting an 11.9-percent decrease in output and a 3.9-
percent decrease in hours worked. Productivity increased 2.1 percent in the nondurable manufacturing 
sector, as output decreased 1.8 percent and hours worked decreased 3.8 percent. (See tables A1, 4, and 
5.) Unit labor costs in the total manufacturing sector increased 3.6 percent in the first quarter of 2020, 
and increased 2.9 percent from the same quarter a year ago. (See table A1.)

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. 

Preliminary fourth-quarter and annual 2019 measures were announced today for the nonfinancial 
corporate sector. Productivity increased 2.8 percent in the fourth quarter of 2019 and increased 1.7 
percent over the last four quarters. Annual average productivity increased 1.8 percent from 2018 to 
2019. The historical average annual rate of productivity growth in the nonfinancial corporate sector 
between 1947 and 2019 is 2.1 percent. (See tables A2, C1, and 6.)

Revised measures        

Hours and related measures for all sectors were revised to incorporate updated ratios of hours worked to 
hours paid by detailed industry, provided by the BLS National Compensation Survey. Percent changes 
were affected back to 2015 but revisions were small. Measures of real hourly compensation for all 
sectors also were revised from 2015 forward due to incorporation of the revised Consumer Price Index 
Research Series Using Current Methods.

Table B1 presents previous and revised productivity and related measures for the business, nonfarm 
business, and manufacturing sectors for the fourth quarter of 2019.

In the fourth quarter of 2019, nonfarm business sector productivity increased 1.2 percent, output 
increased 2.4 percent, and hours worked increased 1.2 percent; the same rates reported March 5. 
Nonfarm business unit labor costs were also not revised, increasing 0.9 percent. Total manufacturing 
sector productivity decreased 0.7 percent in the fourth quarter of 2019, a slightly smaller decline than 
previously reported. Unit labor costs in the manufacturing sector increased 3.5 percent during the fourth 
quarter, slightly less than previously reported. Labor productivity was revised down slightly in the 
durable manufacturing sector to a decrease of 1.0 percent, and was revised up in the nondurable 
manufacturing sector to a decrease of 1.0 percent. (See table B1.)

Annual average rates of productivity growth in the nonfarm business and manufacturing sectors were not 
revised for 2019. (See table 2.) 

Quarterly and annual data for all sectors for recent years appear in tables 1-6. Full historical annual and 
quarterly measures can be found at www.bls.gov/lpc/#data.
______________
The revised Productivity and Costs news release for first-quarter 2020 is scheduled to be released 
on Thursday, June 4, 2020 at 8:30 a.m. (EDT).





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Table A1. Labor productivity growth and related measures - preliminary first-quarter 2020
(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          -2.5         -6.2     -3.8        2.2             0.9          4.8
                        A year ago                 0.3          0.1     -0.2        1.7            -0.4          1.5
                        
Business                Previous quarter          -2.3         -6.0     -3.8        1.9             0.7          4.4
                        A year ago                 0.3          0.1     -0.2        1.7            -0.4          1.4
                        
Manufacturing           Previous quarter          -3.3         -7.1     -3.9        0.2            -1.0          3.6
                        A Year ago                -1.7         -2.4     -0.7        1.1            -1.0          2.9
 Durable
 manufacturing          Previous quarter          -8.3        -11.9     -3.9       -2.2            -3.4          6.6
                        A year ago                -2.5         -3.7     -1.2        0.5            -1.6          3.0
 Nondurable
 manufacturing          Previous quarter           2.1         -1.8     -3.8        5.0             3.7          2.8
                        A year ago                -1.3         -1.1      0.2        2.5             0.3          3.8
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Table A2. Labor productivity growth and related measures - preliminary fourth-quarter 2019
(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
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial         Previous quarter              2.8          4.1      1.2        2.4             0.0         -0.4
corporate            A year ago                    1.7          2.6      0.9        3.6             1.5          1.8
=========================================================================================================================


=========================================================================================================================
Table B1. Labor productivity growth and related measures - revised fourth-quarter 2019
(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                    1.2          2.4      1.2        2.1            -0.3          0.9
                   Previously published            1.2          2.4      1.2        2.1            -0.2          0.9
                        
Business                Revised                    1.0          2.4      1.4        1.9            -0.5          0.9
                   Previously published            1.0          2.4      1.4        1.9            -0.5          0.9
                        
Manufacturing           Revised                   -0.7         -0.2      0.5        2.7             0.3          3.5
                   Previously published           -0.8         -0.4      0.4        2.8             0.4          3.6

 Durable                Revised                   -1.0         -1.4     -0.4        4.1             1.6          5.1
 manufacturing     Previously published           -0.9         -1.4     -0.5        4.2             1.7          5.1
                                                                        
 Nondurable             Revised                   -1.0          1.1      2.1        0.4            -2.0          1.3
 manufacturing     Previously published           -1.2          0.8      2.0        0.4            -1.9          1.6
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Table C1. Labor productivity growth and related measures - annual average changes: 2015-2019

                                                Labor                   Hours    Hourly         Real hourly    Unit labor
Sector                  Year                    productivity   Output   worked   compensation   compensation   costs
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial            2019                       1.8          2.8      0.9        3.4             1.5          1.5
corporate               2018                       0.0          1.9      1.9        3.4             1.0          3.4
                        2017                       0.3          2.0      1.7        3.3             1.1          3.0
                        2016                      -1.1          0.3      1.5        1.1            -0.2          2.3
                        2015                       1.2          3.4      2.2        3.0             2.8          1.8
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Last Modified Date: May 07, 2020