March 15, 2000 (The Editor’s Desk is updated each business day.)

Unit labor costs fall in fourth quarter

Unit labor costs declined in the fourth quarter of 1999 in both the nonfarm business and manufacturing sectors.

[Chart data—TXT]

In the nonfarm sector, unit labor costs fell at a seasonally adjusted annual rate of 2.5 percent in the fourth quarter. In manufacturing, unit labor costs dropped more rapidly, at a rate of 5.5 percent.

For the year, unit labor costs in the business nonfarm sector grew 1.7 percent in 1999, compared with 2.4 percent in 1998. In contrast, unit labor costs in the manufacturing sector fell 1.4 percent in 1999. Unit labor costs have declined in six of the last eight years in the manufacturing sector.

Unit labor costs—the cost of the labor input required to produce one unit of output—are computed by dividing labor costs in nominal terms by real output.

These data are a product of the BLS Quarterly Labor Productivity program. Data in this article are revised from the figures originally released on February 8, 2000, and are subject to further revision. Additional information is available in "Productivity and Costs, Fourth Quarter and Annual Averages, 1999," news release USDL 00-64. Unit labor costs can also be expressed as the ratio of hourly compensation to labor productivity.