For release 10:00 a.m. (ET) Thursday, July 29, 2021                                            USDL-21-1389

Technical Information:  (202) 691-5606  •  productivity@bls.gov  •  www.bls.gov/lpc 
Media Contact:          (202) 691-5902  •  PressOffice@bls.gov


                                   PRODUCTIVITY AND COSTS BY INDUSTRY 
                           WHOLESALE TRADE AND RETAIL TRADE INDUSTRIES - 2020


Labor productivity rose 7.7 percent in retail trade and 3.6 percent in wholesale trade in 2020, the U.S. 
Bureau of Labor Statistics reported today. Unit labor costs, which reflect the total labor costs required 
to produce a unit of output, rose in wholesale trade and fell in retail trade.

Annual productivity growth for retail trade in 2020 was the highest since measurement began in 1987. In 
2020 for retail trade and wholesale trade, hours worked fell at the fastest rates since 2009. Output 
increased at an accelerating rate for retail trade in 2020 while it decreased for the first time since 2010 
for wholesale trade.
	
Among the six NAICS 4-digit industries with the highest productivity growth, five reported growth in 
output while all six showed declines in hours worked. Productivity growth was greatest in book stores 
and news dealers (+58.1 percent) where there was a moderate growth in output and a substantial decline 
in hours worked. All six industries were in the bottom third of trade employment.

Of the six NAICS 4-digit industries with the largest declines in productivity, hours worked, and output 
decreased in all but one, building material and supplies dealers. The two industries with the greatest 
decreases in productivity were gasoline stations (-5.0 percent) and wholesale electronic markets and 
agents and brokers (-4.7 percent). Five of these six industries were in the top third of trade employment.

Labor Productivity Rose in Majority of Industries in 2020

Productivity increased in 11 of the 15 NAICS 3-digit industries studied in 2020. (See table 1.) Seven 
industries had productivity gains of at least 7.0 percent; among these, the largest changes occurred in 
nonstore retailers (+19.6 percent) and sports, hobby, music instrument, and book stores (+19.5 percent). 
Nonstore retailers also had the largest increase in output (+22.6 percent). Of the four industries with 
productivity declines, gasoline stations experienced the largest drop (-5.0 percent).

In wholesale trade, productivity rose 3.6 percent as output fell 2.6 percent and hours worked decreased 
6.0 percent. 
    •  Productivity rose in both durable goods wholesalers and nondurable goods wholesalers at 1.6 
       percent and 8.3 percent, respectively. 
    •  Productivity increased in 15 of the 19 NAICS 4-digit wholesale trade industries while output 
       rose in 7 industries and hours worked fell in 18. 
    •  The highest increase in productivity occurred in paper and paper product merchant wholesalers 
       (+17.7 percent) because hours worked declined at a much faster rate (-15.6 percent) than output 
       (-0.7 percent).

In retail trade, productivity increased by 7.7 percent as output grew 3.9 percent and hours worked fell 
3.6 percent.
    •  Productivity increased in 20 of the 27 NAICS 4-digit retail trade industries while output grew in 
       13 industries and hours worked fell in 22. 
    •  The largest productivity increase (+58.1 percent) occurred in book stores and news dealers as 
       hours fell 32.8 percent while output increased 6.2 percent.
    •  In the largest retail employer, grocery stores, productivity increased 7.6 percent as output 
       increased 8.5 percent and hours worked rose by 0.8 percent.

Unit Labor Costs Decline in 37 Percent of NAICS 4-Digit Industries in 2020

When productivity gains outpace hourly compensation, unit labor costs decline. 
    •  Unit labor costs fell in 4 out of 15 NAICS 3-digit wholesale and retail trade industries in 2020. 
       All unit labor cost declines occurred in industries where productivity rose.
    •  Unit labor costs declined in 5 of 19 NAICS 4-digit wholesale trade industries. In retail trade, 12 
       of 27 NAICS 4-digit industries had declines in unit labor costs.
    •  Hourly compensation, defined as labor compensation per hour worked, rose in 43 of the 46 
       NAICS 4-digit industries.
 
Long-term Labor Productivity Increases for All but One Industry

From 1987 to 2020, labor productivity increased at an average annual rate of 2.8 percent in wholesale 
trade and 3.0 percent in retail trade. (See table 2.)
    •  Among the NAICS 4-digit industries, productivity rose from 1987 to 2020 in 45 industries and 
       declined in only 1 industry, metal and mineral merchant wholesalers. 
    •  Of the 45 NAICS 4-digit industries with increasing productivity growth, 38 experienced rising 
       output while 20 had an increase in hours worked.
    •  Median productivity among NAICS 4-digit industries grew at an average annual rate of 2.2 
       percent.
    •  The 2007 to 2020 productivity growth in durable wholesale, nondurable wholesale, and retail 
       trade industries was slower than during the 1987-2007 period. 
    •  The number of NAICS 4-digit industries with increasing productivity dropped from 43 out of 46 
       during the 1987-2007 period to 37 during the 2007-2020 period.
 
Long-term Trends in Unit Labor Costs Vary by Sector

From 1987 to 2020, unit labor costs declined slightly at an average annual rate of 0.1 percent in 
wholesale durable goods, increased at an average annual rate of 2.7 percent in wholesale nondurable 
goods, and were unchanged in retail trade. (See table 2.)
    •  Among the NAICS 4-digit industries, unit labor costs rose in 16 out of 19 wholesale trade and 13 
       out of 27 retail trade industries from 1987 to 2020. 
    •  From 2007 to 2020, unit labor costs rose in 30 out of 46 industries. All industries with declines in 
       unit labor costs experienced increases in productivity.
    •  During the 1987 to 2007 period, electronics and appliance stores experienced the largest declines 
       in unit labor costs and the largest productivity gains among the NAICS 3-digit industries. 
       Although this industry continued to experience the largest declines in unit labor costs in the 2007 
       to 2020 period, nonstore retailers took the lead in productivity gains.

Additional Information

The trade measures in this release incorporate 2017 Economic Census data and benchmark data from the 
Census Bureau's Annual Wholesale Trade Report (January 2021), Monthly Wholesale Trade Survey 
(May 2021), Annual Retail Trade Survey (January 2021), and Annual Revision of the Monthly Retail 
and Food Services: Sales and Inventories (April 2021). Accordingly, the labor productivity and output 
series for all industries have been revised for 2019 and earlier years. Additionally, the unit labor cost 
measures incorporate preliminary data from the BLS Quarterly Census of Employment and Wages (June 
2021). 

The COVID-19 pandemic did not impact the availability of source data used to construct productivity 
measures in this release. Data source providers continued to collect and publish high quality industry 
data for 2020. Additional information can be found on the BLS website at www.bls.gov/covid19/effects-
of-covid-19-pandemic-on-productivity-and-costs-statistics.htm#Industry-Productivity.

More information about the North American Industry Classification System (NAICS) can be found at 
www.census.gov/naics/.

Access the productivity data dashboard at www.bls.gov/lpc/lpc_by_industry_dashboard.xlsx for
    •  Additional industries and sectors
    •  Detailed data series: indexes of productivity and related measures; rates of change; and levels of 
       industry employment, hours worked, nominal value of production, and labor compensation 
    •  Additional years and long-term data

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Information in this release will be made available to sensory impaired individuals upon request. Voice 
phone: (202) 691-5200; Federal Relay Service: (800) 877-8339.

                                       Technical Note

Labor Productivity: Labor productivity describes the relationship between real output and the labor 
hours involved in its production. These measures show the changes from period to period in the 
amount of goods and services produced per hour worked. Although the labor productivity measures 
relate output in an industry to hours worked of all persons in that industry, they do not measure 
the specific contribution of labor to growth in output. Rather, they reflect the joint effects of 
many influences, including: changes in technology; capital investment; utilization of capacity, 
energy, and materials; the use of purchased services inputs, including contract employment services; 
the organization of production; the characteristics and effort of the workforce; and managerial 
skill.

Unit Labor Costs: Unit labor costs represent the cost of labor required to produce one unit of 
output. The unit labor cost indexes are computed by dividing an index of nominal industry labor 
compensation by an index of real industry output. Unit labor costs also describe the relationship 
between compensation per hour worked (hourly compensation) and real output per hour worked (labor 
productivity). When hourly compensation growth outpaces productivity, unit labor costs increase. 
Alternatively, when productivity growth exceeds hourly compensation, unit labor costs decrease.

Output: Industry output is measured as an annual-weighted index of the changes in the various 
products (in real terms) provided for sale outside the industry. Real industry output for data in
this release is derived by deflating nominal sales or values of production using price indexes. 
Industry output measures are constructed primarily using data from the economic censuses and annual 
surveys of the U.S. Census Bureau, U.S. Department of Commerce, together with information on price 
changes from BLS.  

Labor Hours: Labor hours are measured as annual hours worked by all employed persons in an industry. 
Data on industry employment and hours come primarily from the BLS Current Employment Statistics (CES) 
survey and Current Population Survey (CPS). CES data on the number of total and production worker 
jobs held by wage and salary workers in nonfarm establishments are supplemented with CPS data on 
self-employed and unpaid family workers to estimate industry employment. Hours worked estimates are 
derived using CES and CPS employment, CES data on the average weekly hours paid of production workers, 
CPS data on hours of nonproduction, self-employed, and unpaid family workers, and ratios of hours 
worked to hours paid based on data from the National Compensation Survey (NCS). For some industries, 
employment and hours data are supplemented or further disaggregated using data from the BLS Quarterly 
Census of Employment and Wages (QCEW), the Census Bureau, or other sources. Hours worked are estimated 
separately for different types of workers and then are directly aggregated; no adjustments for labor 
composition are made.

Labor Compensation: Labor compensation, defined as payroll plus supplemental payments, is a measure 
of the cost to the employer of securing the services of labor. Payroll includes salaries, wages, 
commissions, dismissal pay, bonuses, vacation and sick leave pay, and compensation in kind. 
Supplemental payments include both legally required expenditures and payments for voluntary programs. 
The legally required portion consists primarily of federal old age and survivors’ insurance, 
unemployment compensation, and workers’ compensation. Payments for voluntary programs include all 
programs not specifically required by legislation, such as the employer portion of private health 
insurance and pension plans. Industry compensation measures are constructed primarily using data from 
the BLS QCEW and the economic censuses of the Census Bureau, U.S. Department of Commerce.