Productivity and Costs, First Quarter, 2000, revised
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PRODUCTIVITY AND COSTS
First Quarter 2000
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 2000. The revised seasonally adjusted
annual rates of productivity change in the first quarter were:
1.8 percent in the business sector, and
2.4 percent in the nonfarm business sector.
In both sectors, the first-quarter productivity gains were the same as those
reported initially on May 4. (These data do not reflect the employment
benchmark of the BLS Current Employment Statistics released on June 2.)
In manufacturing, the revised productivity changes in the first quarter
were:
7.3 percent in manufacturing,
11.3 percent in durable goods manufacturing, and
1.9 percent in nondurable goods manufacturing.
The increase in manufacturing productivity reflected a 6.8-percent rise
in output and a drop of 0.5 percent in hours worked. The first-quarter
productivity increase was smaller than the 10.8-percent increase recorded in
the fourth quarter of 1999. Output and hours in manufacturing, which
includes about 17 percent of U.S. business-sector employment, tend to vary
more from quarter to quarter than data for the more 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 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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Table A. Productivity and costs: Revised first-quarter 2000 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 6.1 4.2 3.5 -0.3 1.7
Nonfarm business 2.4 6.1 3.6 4.1 0.2 1.6
Manufacturing 7.3 6.8 -0.5 3.6 -0.3 -3.4
Durable 11.3 11.1 -0.1 2.9 -0.9 -7.5
Nondurable 1.9 0.9 -0.9 4.7 0.8 2.8
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Percent change from same quarter a year ago
Business 3.5 5.7 2.2 4.1 1.0 0.6
Nonfarm business 3.7 5.8 2.0 4.3 1.1 0.6
Manufacturing 6.9 5.8 -1.0 4.8 1.6 -1.9
Durable 9.4 9.0 -0.4 4.9 1.8 -4.1
Nondurable 3.7 1.7 -1.9 4.5 1.4 0.8
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Business
From the fourth quarter of 1999 to the first quarter of 2000, business
productivity increased 1.8 percent, reflecting increases of 6.1 percent in
output and 4.2 percent in hours of all persons (seasonally adjusted annual
rates). The increase in productivity was smaller than the 6.6 percent rise
recorded in the previous quarter, when output rose 8.6 percent and hours grew
1.9 percent (table 1).
Hourly compensation increased 3.5 percent during the first quarter of
2000. 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, declined
0.3 percent in the first quarter. This was the first decline in real hourly
compensation since the first quarter of 1996, when it fell 0.6 percent.
Unit labor costs, which reflect changes in both hourly compensation and
productivity, increased 1.7 percent during the first quarter, after declining
3.1 percent during the fourth quarter of 1999. The implicit price deflator
for business output, which reflects changes in both unit labor costs and unit
nonlabor payments, increased 2.2 percent in the first quarter of 2000. This
increase was the largest posted since the first quarter of 1997, when the
implicit price deflator rose 2.8 percent.
Nonfarm business
Productivity rose 2.4 percent in nonfarm business during the first
quarter of 2000, reflecting an increase of 6.1 percent in output and a 3.6
percent rise in hours of all persons. In the fourth quarter of 1999, nonfarm
business productivity rose 6.9 percent, as output increased 8.5 percent and
hours grew 1.5 percent (table 2).
The first-quarter increase in hourly compensation, 4.1 percent, was
similar to the 3.8 percent rise reported for the fourth quarter. When the
rise in consumer prices is taken into account, the 0.2 percent gain in real
hourly compensation in the first quarter was the smallest since the first
quarter of 1996, when it fell 0.5 percent.
The 1.6-percent increase in unit labor costs in the first quarter
followed declines of 2.9 percent in the fourth quarter of 1999 and 0.3
percent in the third quarter. The implicit price deflator for nonfarm
business output rose 2.4 percent in the first quarter of 2000.
Manufacturing
Productivity increased 7.3 percent in manufacturing in the first
quarter, as output rose 6.8 percent and hours of all persons edged down 0.5
percent (seasonally adjusted annual rates). In durable goods industries,
productivity rose sharply, 11.3 percent, during the first quarter. This
reflected a large increase in output, 11.1 percent, and a slight decline, 0.1
percent, in hours of all persons. In nondurable goods industries,
productivity rose 1.9 percent as output rose 0.9 percent and hours fell 0.9
percent (tables 3, 4, and 5).
Hourly compensation in manufacturing rose 3.6 percent during the first
quarter. This increase reflects a rise of 2.9 percent in the hourly
compensation of persons in durable goods industries and a larger increase,
4.7 percent, in the hourly compensation of workers in nondurable goods
industries. Real hourly compensation, which takes account of changes in
consumer prices, dropped 0.3 percent for all manufacturing workers.
The 7.3-percent gain in manufacturing productivity in the first quarter
of 2000 was more than enough to offset the 3.6-percent increase in hourly
compensation. As a result, unit labor costs fell 3.4 percent during the
quarter, after having declined 5.9 percent in the previous quarter. (The
fourth-quarter drop in unit labor costs was the largest in manufacturing
since a 6.9 percent drop in the second quarter of 1961.) The first-quarter
decline in unit labor costs can be attributed to the durable goods sector,
where these costs dropped 7.5 percent. In the smaller nondurable goods
sector, gains in hourly compensation exceeded those in labor productivity,
and unit labor costs rose 2.8 percent.
Nonfinancial corporations
Preliminary first-quarter 2000 measures of productivity and costs for
nonfinancial corporations also were announced today (tables B and 6).
Productivity grew 3.6 percent in the first quarter, as output increased 7.3
percent and employee-hours grew 3.6 percent (seasonally adjusted annual
rates). The growth in employee-hours is the largest since the second quarter
of 1997, when they increased 4.0 percent. In the fourth quarter of 1999,
productivity had increased 5.1 percent as output and hours grew 7.5 and 2.3
percent, respectively. Nonfinancial corporations include all corporations
doing business in the United States, except banks, stock and commodity
brokers, and finance and insurance agencies.
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Table B. Nonfinancial corporations: Preliminary first-quarter 2000
productivity and cost 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
2000 I 3.6 7.3 3.6 3.5 -0.4 -0.1 14.3 1.6
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Percent change from same quarter a year ago
2000 I 4.0 6.5 2.3 4.1 0.9 0.1 2.7 0.8
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Hourly compensation increased 3.5 percent during both the first quarter
of 2000 and the fourth quarter of 1999. However, when the rise in consumer
prices is taken into account, real hourly compensation fell 0.4 percent in
the first quarter after having risen slightly, 0.7 percent, in the previous
quarter. Unit labor costs in nonfinancial corporations declined 0.1 percent
in the first quarter, less than the 1.5-percent drop one quarter earlier.
Unit profits increased 14.3 percent in the first quarter, the largest
increase since the first quarter of 1996, when they increased 21.7 percent.
In the fourth quarter of 1999, unit profits had increased 10.7 percent. The
implicit price deflator for nonfinancial corporate output rose 1.6 percent
in the first quarter of 2000.
REVISED MEASURES
Current and previous measures for the first quarter of 2000 for
business, nonfarm business, and manufacturing are compared in table C. In
the business and nonfarm business sectors, productivity and cost measures
were similar to those reported on May 4, based on information then available.
In manufacturing, productivity and output grew more rapidly--and unit labor
costs fell further--than originally reported.
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Table C. Previous and revised productivity and related measures
Quarterly percent change at seasonally adjusted annual rate
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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 2000
Business:
Previous 1.8 6.0 4.2 3.7 -0.2 1.9
Current 1.8 6.1 4.2 3.5 -0.3 1.7
Nonfarm business:
Previous 2.4 6.0 3.6 4.2 0.3 1.8
Current 2.4 6.1 3.6 4.1 0.2 1.6
Manufacturing:
Previous 6.9 6.2 -0.6 3.8 -0.1 -2.9
Current 7.3 6.8 -0.5 3.6 -0.3 -3.4
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Next release date
The next release of Productivity and Costs is scheduled for 8:30 AM EDT,
Tuesday, Aug. 8, 2000. Preliminary second-quarter measures for business,
nonfarm business, and manufacturing will be released at that time. This
release will incorporate the annual benchmark revision to the BLS
establishment survey data. All employment and hours series will incorporate
new information on seasonal patterns. The release also will incorporate the
annual three-year revision of the National Income and Product Accounts.
- 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 corporations: Productivity, hourly compensation, unit labor
costs, unit profits, and prices, seasonally adjusted
- Sources and
footnotes for tables
- Text version of
entire news release
Bureau of Labor Statistics
mailto:DPRWEB@bls.gov
Last modified:
Tuesday, June 06, 2000
URL: /news.release/prod2.nr0.htm
Table of Contents 
Quarterly Labor Productivity