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.
Bureau of Labor Statistics
