BLS report: Productivity unchanged in 1st quarter 2017 (annual rate); unit labor costs rise 2.2%

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Productivity unchanged in 1st quarter 2017 (annual rate); unit labor costs rise 2.2%

Economic News Release USDL 17-0767

Productivity and Costs, First Quarter 2017, Revised

Transmission of material in this release is embargoed until 8:30 a.m. (EDT) Monday, June 5, 2017

Technical information: [phone] [e-mail] www.bls.gov/lpc
Media contact: [phone] [e-mail]



PRODUCTIVITY AND COSTS
First Quarter 2017, Revised

Nonfarm business sector labor productivity was unchanged during the first quarter of 2017, the U.S. Bureau of Labor Statistics reported today, as both output and hours worked increased 1.7 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2016 to the first quarter of 2017, productivity increased 1.2 percent, reflecting a 2.5-percent increase in output and a 1.3-percent increase in hours worked. (See table A1.)

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. Measures released today were based on more recent source data than were available for the preliminary report.

Unit labor costs in the nonfarm business sector increased 2.2 percent in the first quarter of 2017, reflecting a 2.2-percent increase in hourly compensation; productivity was unchanged. Unit labor costs increased 1.1 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 increased 0.5 percent in the first quarter of 2017, as output increased 2.6 percent and hours worked increased 2.1 percent. Output per hour decreased 0.7 percent in the durable goods manufacturing sector and increased 2.7 percent in the nondurable goods sector. Over the last four quarters, manufacturing sector productivity increased 0.3 percent, as output increased 0.9 percent and hours worked increased 0.6 percent. (See tables A1, 3, 4 and 5.) Unit labor costs in manufacturing increased 2.4 percent in the first quarter of 2017 and rose 2.9 percent from the same quarter a year ago.
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Complete annual and quarterly data series can be found on the Productivity and Costs home page: www.bls.gov/lpc/#data.
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The preliminary Productivity and Costs news release for second-quarter 2017 is scheduled to be released on Wednesday, August 9, 2017 at 8:30 a.m. (EDT).

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