Transmission of this material is embargoed until USDL-09-0933
8:30 a.m. (EDT) Tuesday, August 11, 2009
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Media contact: (202) 691-5902 PressOffice@bls.gov
This release was reissued on the afternoon of Tuesday, August 11, 2009, to
correct information on compensation per hour, real compensation per hour,
unit labor costs, and unit non-labor payments in Tables 1 through 5 and
Appendix tables 1 and 2. In the tables, all index levels for these data series
were corrected; as a result, percent changes derived from the corrected index
levels were changed slightly in a few cases. No other portions of the news
release were affected.
PRODUCTIVITY AND COSTS
Second Quarter 2009, Preliminary
The Bureau of Labor Statistics of the U.S. Department of Labor today
reported preliminary productivity data--as measured by output per hour of
all persons--for the second quarter of 2009. The seasonally adjusted
annual rates of productivity change in the second quarter were:
6.3 percent in the business sector and
6.4 percent in the nonfarm business sector.
Productivity gains in both sectors were the largest since the third quarter
of 2003, and were due to hours worked declining faster than output.
In manufacturing, the preliminary productivity changes in the second
quarter were:
5.3 percent in manufacturing,
3.9 percent in durable goods manufacturing, and
2.0 percent in nondurable goods manufacturing.
The increases in productivity in all manufacturing sectors were the
result of hours falling faster than output. Output and hours in
manufacturing, which includes about 11 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 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.
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Data in this release reflect the comprehensive revision to the National
Income and Product Accounts (NIPA) released by the Bureau of Economic
Analysis of the U.S. Department of Commerce on July 31. See Revised Measures.
==============================================================================
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Table A. Productivity and costs: Preliminary second-quarter 2009 measures
(Seasonally adjusted annual rates)
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Real
Hourly hourly Unit
Produc- compen- compen- labor
Sector tivity Output Hours sation sation costs
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Percent change from preceding quarter
Business 6.3 -1.8 -7.5 0.1 -1.2 -5.8
Nonfarm business 6.4 -1.7 -7.6 0.2 -1.1 -5.8
Manufacturing 5.3 -9.9 -14.4 5.8 4.4 0.5
Durable 3.9 -16.5 -19.6 8.7 7.3 4.7
Nondurable 2.0 -3.4 -5.3 2.0 0.7 0.0
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Percent change from same quarter a year ago
Business 1.9 -5.4 -7.1 1.1 2.1 -0.7
Nonfarm business 1.8 -5.6 -7.3 1.3 2.2 -0.6
Manufacturing -1.3 -15.0 -13.9 6.0 7.0 7.4
Durable -5.0 -21.1 -16.9 7.1 8.1 12.7
Nondurable -0.2 -8.9 -8.6 4.9 5.9 5.1
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Business
Business sector output per hour increased 6.3 percent from the first
quarter to the second quarter of 2009, as output decreased 1.8 percent and
hours of all persons engaged in the sector--employees, proprietors, and
unpaid family workers--fell 7.5 percent (seasonally adjusted annual rates).
The productivity increase was the largest since the third quarter of 2003,
when output per hour increased 8.4 percent. From the second quarter of 2008
to the second quarter of 2009 productivity grew 1.9 percent in the business
sector, as output fell 5.4 percent and hours fell 7.1 percent (tables A
and 1). Business sector productivity had grown at an average annual rate of
2.6 percent from 2000 through 2008.
Hourly compensation edged up 0.1 percent in the second quarter of 2009
after falling 2.5 percent in the first quarter (seasonally adjusted annual
rates). Hourly compensation increased 1.1 percent over the last four
quarters. This measure of compensation includes accrued wages and salaries,
supplements, employer contributions to employee benefit plans, and taxes.
Real hourly compensation, which takes into account changes in consumer prices,
fell 1.2 percent during the second quarter of 2009 as consumer prices
increased 1.3 percent (seasonally adjusted annual rates).
The change in unit labor costs approximates the change in hourly
compensation less the change in productivity. Unit labor costs decreased
at an annual rate of 5.8 percent during the second quarter of 2009.
The implicit price deflator for the business sector, which reflects changes
in unit labor costs and unit nonlabor payments, decreased 0.1
percent in the second quarter of 2009 and increased 2.1 percent one quarter
earlier.
Nonfarm Business
Productivity increased 6.4 percent in the nonfarm business sector
during the second quarter of 2009, reflecting declines of 1.7 percent in
output and 7.6 percent in hours (seasonally adjusted annual rates). The
productivity gain was the largest since the third quarter of 2003, when
productivity grew at a 9.7 percent annual rate. Over the last four quarters
nonfarm hours have fallen 7.3 percent and output has declined 5.6 percent,
yielding an increase of 1.8 percent in output per hour (tables A and 2).
Nonfarm business productivity increased at an annual rate of 2.5 percent from
2000 through 2008.
Hourly compensation in the nonfarm business sector increased 0.2
percent in the second quarter of 2009, compared to a decrease of 2.4 percent
one quarter earlier. When the 1.3 percent rise in consumer prices was taken
into account, real hourly compensation fell 1.1 percent in the second quarter
of 2009 (seasonally adjusted annual rates).
Nonfarm business unit labor costs fell 5.8 percent in the second
quarter of 2009 due entirely to productivity improvement; hourly compensation
increased slightly. These costs declined 0.6 percent over the last four
quarters, as a 1.8 percent increase in output per hour was partially offset by
a 1.3 percent increase in compensation per hour (tables A and 2). The
implicit price deflator for nonfarm business output decreased 0.2 percent in
the second quarter of 2009 and increased 1.7 percent from the same quarter a
year ago.
Manufacturing
Manufacturing productivity grew 5.3 percent in the second quarter of
2009, as output fell 9.9 percent and hours worked decreased 14.4 percent
(seasonally adjusted annual rates). This was the largest quarterly gain in
manufacturing productivity since the first quarter of 2005, when output per
hour increased at a 7.3 percent annual rate. Over the last four quarters,
manufacturing productivity declined 1.3 percent, as a 15.0 percent drop in
output was largely offset by a 13.9 percent decline in hours worked (tables A
and 3). For the entire 2000-2008 period manufacturing productivity increased
at a 3.3 percent annual rate.
In durable goods industries, productivity rose 3.9 percent in the second
quarter of 2009, as output fell 16.5 percent and hours fell faster, -19.6
percent. This was the third consecutive quarter of double-digit declines in
output and hours in the durable manufacturing sector. In nondurable goods
industries, productivity grew 2.0 percent in the second quarter, reflecting
declines in output and hours of 3.4 percent and 5.3 percent, respectively
(tables A, 4, and 5).
During the second quarter of 2009, hourly compensation grew 5.8
percent in total manufacturing, 8.7 percent in durable manufacturing and 2.0
percent in nondurable manufacturing (seasonally adjusted annual rates). As
revised, manufacturing hourly compensation increased 2.2 percent in the first
quarter; when consumer prices were taken into account, real hourly
compensation of all manufacturing workers rose 4.4 percent in the second
quarter, and 4.6 percent in the first quarter of 2009.
Unit labor costs in manufacturing increased 0.5 percent in the second
quarter of 2009; a revised increase of 4.9 percent was reported for the first
quarter of 2009. From the second quarter of 2008 to the second quarter of
2009, unit labor costs increased 7.4 percent (tables A and 3).
Revised measures
In addition to incorporating the most recent information on employment
and hours, consumer prices, and manufacturing output in recent months, the
measures released today reflect the revised National Income and Product
Accounts (NIPA) data released by the Bureau of Economic Analysis, U.S.
Department of Commerce, on July 31. NIPA output data for the business,
nonfarm business and nonfinancial corporate sectors were revised historically.
As a result, measures computed by BLS using output, such as productivity, were
revised historically for these sectors. NIPA compensation data used for all
sectors were revised back to 1978. BLS measures involving compensation,
including hourly compensation, real hourly compensation and unit labor costs,
were revised historically for all sectors. The compensation data for
manufacturing sectors for first quarter 2001 forward are on a North American
Industry Classification System (NAICS) basis; data prior to this are on a
Standard Industrial Classification (SIC) System basis. The measures involving
compensation therefore contain a break in series at 2001. NIPA data on
employment in government enterprises and the proportion of total compensation
paid to employees of corporations and tax-exempt organizations also led to BLS
hours revisions back to 1998. Revised quarterly and annual series for recent
years appear in tables 1-6 and revised annual indexes are displayed in
appendix tables 1-3. Full historical annual and quarterly measures can be
found on the productivity and costs home page http://www.bls.gov/lpc/#data.
Table B presents previous and revised productivity and related measures
for the major sectors: business, nonfarm business and manufacturing, for the
first quarter of 2009 and for the years 2008 through 2006.
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Table B. Previous and revised productivity and related measures
Percent changes at annual rates
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Real
Hourly hourly Unit
Produc- compen- compen- labor
Sector tivity Output Hours sation sation costs
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First Quarter 2009
Business:
Previous 1.8 -7.2 -8.8 4.5 7.0 2.7
Revised 0.2 -8.7 -8.9 -2.5 -0.1 -2.7
Nonfarm business:
Previous 1.6 -7.6 -9.0 4.6 7.1 3.0
Revised 0.3 -8.8 -9.0 -2.4 -0.1 -2.7
Manufacturing:
Previous -2.7 -21.7 -19.5 13.4 16.1 16.6
Revised -2.6 -21.8 -19.8 2.2 4.6 4.9
Annual average 2008
Business:
Previous 2.7 0.8 -1.9 3.6 -0.2 0.9
Revised 1.9 0.0 -1.9 2.7 -1.1 0.8
Nonfarm business:
Previous 2.8 0.8 -1.9 3.7 -0.2 0.9
Revised 1.8 -0.1 -1.9 2.8 -1.0 1.0
Manufacturing:
Previous 0.9 -3.1 -3.9 4.1 0.3 3.2
Revised 0.8 -3.1 -3.9 3.0 -0.9 2.1
Annual average 2007
Business:
Previous 1.6 2.0 0.5 4.2 1.3 2.6
Revised 1.8 2.2 0.4 4.2 1.3 2.4
Nonfarm business:
Previous 1.4 2.0 0.5 4.1 1.3 2.7
Revised 1.8 2.3 0.5 4.2 1.3 2.3
Manufacturing:
Previous 3.2 1.3 -1.8 3.6 0.7 0.4
Revised 3.2 1.3 -1.8 4.3 1.4 1.1
Annual average 2006
Business:
Previous 0.9 3.0 2.1 3.8 0.5 2.9
Revised 1.0 3.1 2.1 3.8 0.5 2.8
Nonfarm business:
Previous 0.9 3.2 2.2 3.8 0.5 2.8
Revised 0.9 3.1 2.2 3.8 0.5 2.8
Manufacturing:
Previous 1.0 1.8 0.8 4.1 0.8 3.0
Revised 1.0 1.8 0.8 2.0 -1.3 0.9
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In the first quarter of 2009, for the business and nonfarm business
sectors, output was revised down and hours were virtually the same, resulting
in downward revisions to productivity. Hourly compensation was revised down
substantially in both sectors, leading to large downward revisions to unit
labor costs despite the downward revision to productivity.
In the manufacturing sector, productivity declined slightly less than
previously reported in the first quarter of 2009, and the full effect of a
large downward revision to hourly compensation is seen in a corresponding
downward revision to unit labor costs.
For the year 2008, output was revised down in the business and nonfarm
business sectors while hours were not revised, resulting in downward revisions
to productivity. Similar downward revisions to hourly compensation in these
sectors offset the productivity revisions, leaving unit labor costs little
changed. In manufacturing, productivity was little changed while hourly
compensation and unit labor costs were revised down 1.1 percentage points.
For 2007, output and productivity for the business and nonfarm
business sectors were revised up, therefore unit labor costs were revised
down. In manufacturing, hourly compensation and unit labor costs were
revised up in 2007, and in 2006 these same measures were revised down.
Revised Measures: Nonfinancial Corporations
All measures for nonfinancial corporations were revised historically
due to incorporation of the NIPA revision. Output, based on the income side
of the NIPA for nonfinancial corporations, was revised down in the first
quarter, leading to a corresponding downward revision to productivity
(table C). Unit labor costs were revised down as the magnitude of the
downward revision to productivity was less than a downward revision to hourly
compensation. Unit profits fell 20.5 percent, rather than 7.2 percent as
reported June 4. From the first quarter of 2008 through the first quarter of
2009, productivity increased 0.6 percent (table 6).
Output and productivity also were revised down for the year 2008, to
increases of 0.4 percent and 1.9 percent, respectively. Because hourly
compensation was revised down about the same, unit labor costs increased at
the same 1.1 percent rate reported previously. As revised, productivity
increased at an average annual rate of 2.3 percent in the nonfinancial
corporate sector from 2000 through 2008.
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Table C. Nonfinancial corporations: Previous and revised productivity and cost
measures
Percent changes at annual rates
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Real
Hourly hourly Unit Implicit
Produc- compen- compen- labor Unit price
Sector tivity Output Hours sation sation costs profits deflator
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First quarter 2009
Previous -2.1 -12.3 -10.4 6.3 8.8 8.5 -20.5 6.4
Revised. -6.0 -15.9 -10.5 -2.5 -0.2 3.7 -7.2 5.3
Annual average 2008
Previous 2.8 1.3 -1.5 3.9 0.0 1.1 -10.4 0.0
Revised. 1.9 0.4 -1.5 3.0 -0.8 1.1 -16.3 -0.4
Annual average 2007
Previous 0.7 1.4 0.7 4.1 1.2 3.4 -8.8 1.7
Revised. 1.0 1.7 0.7 3.6 0.8 2.6 -9.9 1.7
Annual average 2006
Previous 1.8 4.1 2.2 3.6 0.3 1.8 12.6 3.1
Revised. 1.4 3.7 2.3 2.9 -0.4 1.4 11.7 3.1
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Next release date
The next release of Productivity and Costs is scheduled for 8:30 a.m.
EDT, Wednesday, Sept. 2, 2009. Revised second-quarter measures for business,
nonfarm business, and manufacturing will be released at that time, along with
preliminary measures for nonfinancial corporations.
Changes in the presentation of the text sections will be incorporated
in the next press releases; there will be no changes to the format or content
of tables 1 through 6. An example of the new press release format can be
found at http://www.bls.gov/bls/changes_to_text_sections_of_nrs.htm
