February 08, 2008 (The Editor’s Desk is updated each business day.)

Manufacturing unit labor costs up in 2007

Unit labor costs in manufacturing increased 1.6 percent in 2007, a reversal from the 1.5-percent decline in 2006.

[Chart data—TXT]

The last time that manufacturing unit labor costs experienced an annual increase was in 2003.

In the durable goods manufacturing sector unit labor costs edged up 0.6 percent in 2007 following a 2.9-percent decline in 2006. Unit labor costs in nondurable goods industries rose 3.0 percent in 2007 after declining 0.5 percent in 2006.

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. Unit labor costs can also be expressed as the ratio of hourly compensation to labor productivity.

These data are from the BLS Productivity and Costs program. Data are subject to revision. For more information, see the "Productivity and Costs, Preliminary Fourth Quarter and Annual Averages for 2007" (PDF) (HTML), news release USDL 08-0171.