Productivity and Costs, Second Quarter 2008 Revised
Internet address: http://www.bls.gov/lpc/ USDL 08-1251 Historical, technical TRANSMISSION OF THIS information: (202) 691-5606 MATERIAL IS EMBARGOED Current data: (202) 691-5200 UNTIL 8:30 A.M. EDT, Media contact: (202) 691-5902 THURSDAY, SEPTEMBER 4, 2008. PRODUCTIVITY AND COSTS Second Quarter 2008, Revised The Bureau of Labor Statistics of the U.S. Department of Labor today reported revised productivity data--as measured by output per hour of all persons--for the second quarter of 2008. The seasonally adjusted annual rates of productivity change in the second quarter were: 4.3 percent in the business sector and 4.3 percent in the nonfarm business sector. In both sectors, the second-quarter productivity gains were larger than the preliminary estimates reported on August 8. In manufacturing, the revised productivity changes in the second quarter were: -2.2 percent in manufacturing, -4.5 percent in durable goods manufacturing, and 0.2 percent in nondurable goods manufacturing. Manufacturing productivity decreased faster in the second quarter of 2008 than was reported on August 8, reflecting downward revisions to output per hour in both durable and nondurable manufacturing. Output and hours in manufacturing, which includes about 12 percent of U.S. business-sector employment, tend to vary more from quarter to quarter than data for the aggregate business and nonfarm business sectors. Second-quarter measures are summarized in table A and appear in detail in tables 1 through 5; the differences between these measures and the preliminary second-quarter figures issued on August 8 are shown in table C. The data sources and methods used in the preparation of the manufacturing series differ from those used in preparing the business and nonfarm business series, and these measures are not directly comparable. Output measures for business and nonfarm business are based on measures of gross domestic product prepared by the Bureau of Economic Analysis of the U.S. Department of Commerce. Quarterly output measures for manufacturing reflect indexes of industrial production independently prepared by the Board of Governors of the Federal Reserve System. See Technical Notes for further information on data sources. ------------------------------------------------------------------------------ Table A. Productivity and costs: Revised second-quarter 2008 measures (Seasonally adjusted annual rates) ------------------------------------------------------------------------------ Real Hourly hourly Unit Produc- compen- compen- labor Sector tivity Output Hours sation sation costs ------------------------------------------------------------------------------ Percent change from preceding quarter Business 4.3 3.2 -1.0 4.0 -1.0 -0.4 Nonfarm business 4.3 3.4 -0.8 3.7 -1.3 -0.5 Manufacturing -2.2 -3.7 -1.5 3.9 -1.1 6.2 Durable -4.5 -5.9 -1.5 4.1 -0.8 9.0 Nondurable 0.2 -1.3 -1.6 3.3 -1.6 3.1 ------------------------------------------------------------------------------ Percent change from same quarter a year ago Business 3.2 2.2 -1.0 3.9 -0.4 0.7 Nonfarm business 3.4 2.2 -1.1 4.0 -0.2 0.6 Manufacturing 2.4 -0.2 -2.5 3.8 -0.4 1.4 Durable 2.4 0.1 -2.3 3.4 -0.8 1.0 Nondurable 2.5 -0.6 -3.0 4.5 0.2 1.9 ------------------------------------------------------------------------------ Business Labor productivity in the business sector grew 4.3 percent from the first quarter to the second quarter of 2008, as output increased 3.2 percent and hours worked by all persons engaged in the sector--employees, proprietors, and unpaid family workers--fell 1.0 percent (seasonally adjusted annual rates). Output per hour increased 3.2 percent over the past four quarters, reflecting a 2.2 percent increase in output and a 1.0 percent decrease in hours (tables A and 1). The four-quarter decline in hours was the largest since a 1.3 percent decline for the period ending with the second quarter of 2003. Hourly compensation in the business sector grew at a 4.0 percent annual rate in the second quarter of 2008. Hourly compensation includes wages and salaries, supplements, employer contributions to employee benefit plans, and taxes. Real hourly compensation, which takes into account changes in consumer prices, declined 1.0 percent in the second quarter of 2008 after falling 0.6 percent in the first quarter of the year. Unit labor costs, which reflect changes in hourly compensation and productivity, decreased 0.4 percent in the second quarter of 2008. From the second quarter of 2007 to the second quarter of 2008 these costs increased 0.7 percent. The implicit price deflator for business output, which exhibits changes in unit labor costs and unit nonlabor payments, rose 0.9 percent in the second quarter of 2008. Nonfarm business Productivity in the nonfarm business sector grew at a 4.3 percent annual rate in the second quarter of 2008, reflecting an increase of 3.4 percent in output and a decrease of 0.8 percent in hours of all persons (tables A and 2). From the second quarter of 2007 to the second quarter of 2008, nonfarm business productivity grew 3.4 percent, faster than the 2.5 percent average rate from 2000 to 2007. Hours decreased 1.1 percent over the past four quarters--the largest four-quarter decline since a 2.1 percent decline for the period ending in the third quarter of 2002. Hourly compensation increased 3.7 percent in the second quarter of 2008, but when the 5.0 percent increase in consumer prices was taken into account, real hourly compensation declined 1.3 percent. Unit labor costs declined 0.5 percent in the second quarter of 2008, but rose 0.6 percent over the last four quarters. The implicit price deflator for nonfarm business output rose 0.9 percent in the second quarter. Manufacturing Productivity decreased 2.2 percent in manufacturing in the second quarter of 2008, as output fell 3.7 percent and hours of all persons fell 1.5 percent (seasonally adjusted annual rates). This was the largest quarterly decline in manufacturing productivity since a 2.5 percent decrease in the second quarter of 1989; it was concentrated in the durable goods sector, where productivity declined 4.5 percent. In nondurable goods, productivity edged up 0.2 percent as output and hours fell 1.3 percent and 1.6 percent, respectively (tables A, 3, 4, and 5). The hourly compensation of all manufacturing workers increased 3.9 percent during the second quarter of 2008, reflecting increases in hourly compensation of 4.1 percent in durable goods industries and 3.3 percent in the nondurable goods sector. Real hourly compensation in the total manufacturing sector fell 1.1 percent in the second quarter after consumer prices were taken into account. Unit labor costs in manufacturing increased 6.2 percent in the second quarter of 2008, as unit labor costs jumped 9.0 percent in durable goods industries and increased 3.1 percent in nondurable goods industries. Nonfinancial corporations Preliminary second-quarter 2008 measures of productivity and costs were reported today for nonfinancial corporations. Productivity increased 5.6 percent during the second quarter, reflecting a 3.8 percent rise in output and a 1.7 percent fall in employee hours (tables B and 6). Over the last four quarters output per hour increased 2.3 percent, output increased 1.7 percent, and hours worked declined 0.5 percent--the first decline in hours since the four quarters ending with fourth-quarter 2003, when hours declined 0.9 percent. Nonfinancial corporations include all corporations doing business in the United States except those classified as depository institutions, nondepository institutions, security and commodity brokers, insurance carriers, regulated investment offices, small business investment offices, and real estate investment trusts. ------------------------------------------------------------------------------ Table B. Nonfinancial corporations: Preliminary second-quarter 2008 productivity and cost measures (Seasonally adjusted annual rates) ------------------------------------------------------------------------------ Real Hourly hourly Unit Implicit Produc- compen- compen- labor Unit price Period tivity Output Hours sation sation costs profits deflator ------------------------------------------------------------------------------ Percent change from preceding quarter 2008 II 5.6 3.8 -1.7 3.7 -1.2 -1.8 -24.7 -3.6 ------------------------------------------------------------------------------ Percent change from same quarter a year ago 2008 II 2.3 1.7 -0.5 3.8 -0.4 1.5 -18.8 -0.9 ------------------------------------------------------------------------------ Hourly compensation rose 3.7 percent in the second quarter of 2008, but when the rise in consumer prices is taken into account, real hourly compensation fell 1.2 percent. Unit labor costs for nonfinancial corporations decreased 1.8 percent in the second quarter of 2008. Unit profits fell 24.7 percent in the second quarter of 2008. This was the fourth consecutive double-digit decline in this measure (table 6). The implicit price deflator for nonfinancial corporate output fell 3.6 percent in the second quarter and 0.9 percent over the past four quarters. Revised Measures Current and previous measures for the first and second quarters of 2008 for the business, nonfarm business, and manufacturing sectors are compared in table C. In the second quarter of 2008, productivity was revised up in the business and nonfarm business sectors, as output was revised up significantly and hours decreased more than previously reported. In both of these sectors the upward revisions to productivity were much larger than those to hourly compensation, and unit labor costs were revised down. Productivity was revised down in the manufacturing sector in the second quarter of 2008 due to both a downward revision to output and an upward revision to hours. The downward revision to productivity was largely offset by a downward revision to hourly compensation, so unit labor costs rose only slightly more than previously reported. ------------------------------------------------------------------------------ Table C. Business, nonfarm business, and manufacturing: Previous and revised productivity and related measures (Quarterly percent changes at seasonally adjusted annual rates) ------------------------------------------------------------------------------ Real Hourly hourly Unit Produc- compen- compen- labor Sector tivity Output Hours sation sation costs ------------------------------------------------------------------------------ Second quarter 2008 Business: Previous 2.3 1.5 -0.7 3.8 -1.2 1.5 Revised 4.3 3.2 -1.0 4.0 -1.0 -0.4 Nonfarm business: Previous 2.2 1.7 -0.5 3.6 -1.4 1.3 Revised 4.3 3.4 -0.8 3.7 -1.3 -0.5 Manufacturing: Previous -1.4 -3.5 -2.0 4.6 -0.4 6.1 Revised -2.2 -3.7 -1.5 3.9 -1.1 6.2 First quarter 2008 Business: Previous 2.2 0.7 -1.5 5.0 0.6 2.7 Revised 2.3 0.7 -1.6 3.6 -0.6 1.3 Nonfarm business: Previous 2.6 0.9 -1.6 5.2 0.8 2.5 Revised 2.6 0.9 -1.7 3.8 -0.4 1.2 Manufacturing: Previous 3.4 -0.8 -4.0 6.2 1.8 2.8 Revised 3.3 -0.9 -4.0 3.8 -0.5 0.5 ------------------------------------------------------------------------------ In the first quarter of 2008, hourly compensation was updated to reflect revised estimates of compensation released by the Bureau of Economic Analysis of the U.S. Department of Commerce August 28. As revised, hourly compensation increased 3.6 percent in the business sector, and 3.8 percent in both the nonfarm business and manufacturing sectors. In all of the major sectors, hourly compensation grew more slowly in the first quarter than BLS reported August 8, therefore unit labor costs in these sectors rose less than in preliminary estimates. Revised Measures: Nonfinancial Corporations Data for the first quarter of 2008 were also revised for the nonfinancial corporate sector (table D). Productivity was revised down along with output; hours were not revised. Hourly compensation was revised down more than productivity; revised unit labor costs increased 3.2 percent, rather than 3.9 percent as reported August 8. ------------------------------------------------------------------------------ Table D. Nonfinancial corporations: Previous and revised productivity and cost measures (Quarterly percent changes at seasonally adjusted annual rates) ------------------------------------------------------------------------------ Real Hourly hourly Unit Implicit Produc- compen- compen- labor Unit price tivity Output Hours sation sation costs profits deflator ------------------------------------------------------------------------------ First quarter 2008 Previous 1.0 -0.1 -1.1 4.9 0.6 3.9 -14.7 0.5 Revised -0.2 -1.4 -1.1 2.9 -1.3 3.2 -13.6 0.5 ------------------------------------------------------------------------------ Next release date The next release of Productivity and Costs is scheduled for 8:30 AM EST, Thursday, November 6, 2008. Preliminary third-quarter measures for business, nonfarm business, and manufacturing will be released at that time.
- Technical note
- Table 1. Business sector: Productivity, hourly compensation, unit labor costs, and prices, seasonally adjusted
- Table 2. Nonfarm business sector: Productivity, hourly compensation, unit labor costs, and prices, seasonally adjusted
- Table 3. Manufacturing sector: Productivity, hourly compensation, and unit labor costs, seasonally adjusted
- Table 4. Durable manufacturing sector: Productivity, hourly compensation, and unit labor costs, seasonally adjusted
- Table 5. Nondurable manufacturing sector: Productivity, hourly compensation, and unit labor costs, seasonally adjusted
- Table 6. Nonfinancial corporate sector: Productivity, hourly compensation, unit labor costs, unit profits, and prices, seasonally adjusted
- Sources and footnotes for tables
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Last Modified Date: September 04, 2008