February 02, 2005 (The Editor’s Desk is updated each business day.)

Biggest rise in multifactor productivity since 1992

Multifactor productivity—measured as output per unit of combined labor and capital inputs— increased 2.0 percent in the private nonfarm business sector in 2002. This was the fastest rate of growth since 1992.

[Chart data—TXT]

Output increased 1.8 percent in 2002, and the growth of combined units of capital and labor inputs declined 0.1 percent. In comparison, in 2001, multifactor productivity showed no growth as output and combined inputs both rose 0.5 percent.

Multifactor productivity is designed to measure the joint influences on economic growth of technological change, efficiency improvements, returns to scale, reallocation of resources, and other factors. Multifactor productivity, therefore, differs from the labor productivity (output per hour) measures that are published quarterly by BLS since it requires information on capital services and other data that are not available on a quarterly basis.

These data are a product of the BLS Multifactor Productivity program. Data are subject to revision. Additional information is available in "Multifactor Productivity Trends, 2002" (PDF) (TXT), news release USDL 05-114.