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Media contact: (202) 691-5902 THURSDAY, JUNE 4, 2009.
PRODUCTIVITY AND COSTS
First Quarter 2009, 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 first quarter of 2009.
The revised seasonally adjusted annual rates of productivity
change in the first quarter were:
1.8 percent in the business sector and
1.6 percent in the nonfarm business sector.
In both sectors, the first-quarter productivity gains were greater
than the preliminary estimates reported on May 7, due solely to
revisions to output growth.
In manufacturing, the revised productivity changes in the
first quarter were:
-2.7 percent in manufacturing,
-10.4 percent in durable goods manufacturing, and
1.9 percent in nondurable goods manufacturing.
Manufacturing productivity in the first quarter of 2009 fell
at a slower rate than was reported on May 7. 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.
First-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 prepared by the Board of
Governors of the Federal Reserve System. See Technical Notes for
further information on data sources.
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Table A. Productivity and costs: Revised first-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 1.8 -7.2 -8.8 4.5 7.0 2.7
Nonfarm business 1.6 -7.6 -9.0 4.6 7.1 3.0
Manufacturing -2.7 -21.7 -19.5 13.4 16.1 16.6
Durable -10.4 -31.0 -23.0 15.8 18.6 29.3
Nondurable 1.9 -11.6 -13.2 10.1 12.8 8.1
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Percent change from same quarter a year ago
Business 2.0 -3.8 -5.7 4.1 4.3 2.0
Nonfarm business 1.9 -4.0 -5.8 4.1 4.3 2.2
Manufacturing -3.2 -13.9 -11.0 8.4 8.7 12.0
Durable -6.9 -18.8 -12.8 9.5 9.7 17.6
Nondurable -0.8 -8.8 -8.0 6.9 7.1 7.8
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Business
Business sector productivity grew 1.8 percent in the first
quarter of 2009 as output decreased 7.2 percent and hours worked
by all persons--employees, proprietors, and unpaid family workers-
-decreased 8.8 percent (seasonally adjusted annual rates). The
decrease in hours was the largest since a decline of 12.1 percent
in the first quarter of 1975. From the first quarter of 2008 to
the first quarter of 2009, productivity has increased 2.0 percent,
with output and hours falling 3.8 percent and 5.7 percent,
respectively (tables A and 1). This productivity growth rate was
lower than the 2.5 percent average annual rate from 2000 to 2007.
Hourly compensation increased at a 4.5 percent annual rate in
the first quarter of 2009. This measure of 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, rose 7.0
percent in the first quarter of 2009.
The change in unit labor costs approximates the change in
hourly compensation less the change in productivity. In the first
quarter of 2009 these costs grew at a 2.7 percent annual rate,
higher than the 2.0 percent rate from the first quarter of 2008 to
the first quarter of 2009 and the 1.4 percent average annual rate
from 2000 to 2007. The implicit price deflator for business
output, which reflects changes in both unit labor costs and unit
nonlabor payments, grew 2.2 percent in the first quarter of 2009.
Nonfarm Business
During the first quarter of 2009, productivity rose 1.6
percent in the nonfarm business sector; output fell 7.6 percent
and hours of all persons fell 9.0 percent (seasonally-adjusted
annual rates). The decrease in hours, 9.0 percent, was the
largest since the first quarter of 1975, when hours fell 12.0
percent. Over the last four quarters, productivity in the nonfarm
business sector grew 1.9 percent (tables A and 2). This growth
rate was lower than the 2.5 percent average rate of growth from
2000 to 2007.
Hourly compensation increased at a 4.6 percent annual rate in
the nonfarm business sector in the first quarter of 2009. The
measure increased 4.5 percent in the fourth quarter, as revised.
When hourly compensation is adjusted for the fall in consumer
prices, real hourly compensation grew 7.1 percent in the first
quarter of 2009.
Unit labor costs rose 3.0 percent in the first quarter of
2009. The percent change from the same quarter a year ago was 2.2
percent. The implicit price deflator for nonfarm business output
increased 2.8 percent in the first quarter of 2009.
Manufacturing
Productivity decreased at a 2.7 percent annual rate in the
manufacturing sector during the first quarter of 2009, reflecting
a 21.7 percent decrease in output and a 19.5 percent decrease in
hours (tables A and 3). These were the largest-ever declines in
the output and hours series, which begin with data for the second
quarter of 1987. Over the last four quarters, manufacturing
productivity fell 3.2 percent, the largest four-quarter decline in
the series (tables A and 3). This contrasts with the 3.7 percent
average annual increase from 2000 to 2007. In the durable goods
manufacturing subsector, output declined 31.0 percent and hours
fell 23.0 percent, yielding a productivity decline of 10.4
percent. In nondurable goods industries, productivity rose 1.9
percent as the decline in output of 11.6 percent was less than the
13.2 percent decline in hours.
Hourly compensation in manufacturing grew 13.4 percent during
the first quarter of 2009, reflecting a 15.8 percent rise in
durable goods industries and a 10.1 percent rise in the nondurable
goods industries (seasonally-adjusted annual rates). Real hourly
compensation, which takes into account changes in consumer prices,
increased 16.1 percent for all manufacturing workers.
Unit labor costs rose 16.6 percent in manufacturing during
the first quarter of 2009, after increasing 17.1 percent in the
fourth quarter of 2008. Over the last four quarters total
manufacturing unit labor costs increased 12.0 percent, the largest
increase in the series.
Nonfinancial Corporations
Preliminary first-quarter 2009 measures of productivity and
costs for nonfinancial corporations also were announced today
(tables B and 6). Productivity decreased 2.1 percent in the first
quarter as output fell 12.3 percent and hours fell 10.4 percent
(seasonally adjusted annual rates). The decline in output was the
largest in the series, which begins in the second quarter of 1958.
The hours decline was the largest since a 13.9 percent decline in
the first quarter of 1975. From the first quarter of 2008 to the
first quarter of 2009 productivity grew 2.0 percent; it had grown
at a 2.7 percent annual rate from 2000 to 2007. The nonfinancial
corporate sector includes 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.
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Table B. Nonfinancial corporations: Preliminary first-quarter 2009
productivity and costs measures
(Seasonally adjusted annual rates)
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Real
Hourly hourly Unit Implicit
Produc- compen- compen- labor Unit price
Period tivity Output Hours sation sation costs profits deflator
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Percent change from preceding quarter
2009 I -2.1 -12.3 -10.4 6.3 8.8 8.5 -20.5 6.4
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Percent change from same quarter a year ago
2009 I 2.0 -4.1 -5.9 5.0 5.2 3.0 -9.7 2.8
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Hourly compensation increased 6.3 percent during the first
quarter of 2009; real hourly compensation increased 8.8 percent,
after accounting for the decline in prices. Unit labor costs in
nonfinancial corporations rose 8.5 percent in the first quarter of
2009, and 3.0 percent over the last four quarters.
Revised Measures
Previous and revised measures for the first quarter of 2009
in the business, nonfarm business, and manufacturing sectors are
compared in table C. In the business, nonfarm business, and
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Table C. Previous and revised productivity and related measures
(Quarterly percent changes at 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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First quarter 2009
Business:
Previous 1.1 -7.8 -8.8 4.1 6.6 2.9
Revised 1.8 -7.2 -8.8 4.5 7.0 2.7
Nonfarm business:
Previous 0.8 -8.2 -9.0 4.1 6.6 3.3
Revised 1.6 -7.6 -9.0 4.6 7.1 3.0
Manufacturing:
Previous -3.4 -22.4 -19.7 12.8 15.5 16.7
Revised -2.7 -21.7 -19.5 13.4 16.1 16.6
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Fourth quarter 2008
Business:
Previous -0.5 -8.5 -8.0 4.9 14.4 5.4
Revised -0.5 -8.5 -8.0 4.2 13.7 4.8
Nonfarm business:
Previous -0.6 -8.8 -8.3 5.2 14.8 5.7
Revised -0.6 -8.8 -8.3 4.5 14.0 5.1
Manufacturing:
Previous -4.2 -18.0 -14.4 10.1 20.2 15.0
Revised -4.6 -18.3 -14.4 11.8 22.0 17.1
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Annual average 2008
Business:
Previous 2.7 0.8 -1.9 3.6 -0.2 0.9
Revised 2.7 0.8 -1.9 3.6 -0.2 0.9
Nonfarm business:
Previous 2.8 0.8 -1.9 3.7 -0.1 0.9
Revised 2.8 0.8 -1.9 3.7 -0.2 0.9
Manufacturing:
Previous 0.9 -3.0 -3.9 4.0 0.2 3.1
Revised 0.9 -3.1 -3.9 4.1 0.3 3.2
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manufacturing sectors productivity was revised up along with
output; hours were also revised up slightly in the manufacturing
sector. Upward revisions to hourly compensation were less than
the revisions to productivity, so unit labor costs increased less
than was reported on May 7 for each of the three sectors.
Table C also presents preliminary and revised results for the
fourth quarter and annual average of 2008. In the business and
nonfarm business sectors, revised employee compensation data from
the Bureau of Economic Analysis (BEA) of the Department of
Commerce resulted in downward revisions to hourly compensation,
real hourly compensation, and unit labor costs. In the
manufacturing sector, fourth quarter productivity was revised down
due to a downward revision to output. Unit labor costs were
revised up due both to the downward revision to productivity and
an upward revision to hourly compensation. Annual measures for
all sectors were mostly unaffected by the fourth-quarter
revisions.
Revised Measures Nonfinancial Corporations
Fourth quarter and annual average 2008 measures were revised
for the nonfinancial corporate sector. As revised, productivity
decreased at a 4.3 percent annual rate in the fourth quarter of
2008, reflecting a 0.4 percentage point downward revision to
output and unchanged employee hours. A downward revision to
hourly compensation was larger than the downward revision to
productivity; as a result, unit labor costs rose slightly less
than reported on May 7. Annual measures were virtually the same
as the preliminary estimates.
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Table D. Nonfinancial corporations: Previous and revised productivity and
costs measures
(Quarterly percent changes at seasonally adjusted annual rates)
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Real
Hourly hourly Unit Implicit
Produc- compen- compen- labor Unit price
tivity Output Hours sation sation costs profits deflator
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Fourth quarter 2008
Previous -3.9 -10.5 -6.9 5.4 15.0 9.6 -28.8 5.0
Revised -4.3 -10.9 -6.9 4.7 14.2 9.4 -28.5 5.0
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Annual average 2008
Previous 2.8 1.3 -1.5 3.9 0.1 1.1 -10.4 0.0
Revised 2.8 1.3 -1.5 3.9 0.0 1.1 -10.4 0.0
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Next release date
The next release of Productivity and Costs is scheduled for
8:30 AM EDT, Tuesday, August 11, 2009. Preliminary second-quarter
measures for business, nonfarm business, and manufacturing will be
released at that time. The August 11 release also will
incorporate the three-year revision of the National Income and
Product Accounts.
Upcoming change to the Productivity and Costs news release
Beginning with the Productivity and Costs news release
scheduled for publication on Wednesday, September 2, 2009, the
Bureau of Labor Statistics will introduce changes to the format of
the text section, including text tables. All data series will
continue to be provided. For further information, see the note
under "Latest Announcements" on http://www.bls.gov/newsroom/.
