Productivity and Costs, Second Quarter, 2000
USDL 00-225
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TUESDAY, AUGUST 8, 2000.
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PRODUCTIVITY AND COSTS
Second Quarter 2000
The Bureau of Labor Statistics of the U.S. Department of Labor reported
preliminary productivity data--as measured by output per hour of all persons--
for the second quarter of 2000. The preliminary seasonally adjusted annual
rates of productivity change in the second quarter were:
6.2 percent in the business sector and
5.3 percent in the nonfarm business sector.
In both the business and nonfarm business sectors, productivity grew more
rapidly in the second quarter than in the first quarter, when output per hour
of all persons (as revised) rose 1.6 percent in the business sector and 1.9
percent in the nonfarm business sector.
In manufacturing, productivity changes in the second quarter were:
5.1 percent in manufacturing,
9.6 percent in durable goods manufacturing, and
0.0 percent in nondurable goods manufacturing.
Productivity rose 5.1 percent in the manufacturing sector in the second
quarter as output and hours of all persons increased 7.0 percent and 1.7
percent, respectively. In the first quarter, manufacturing productivity rose
7.9 percent (as revised). 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. Second-quarter measures are summarized in table A and
appear in detail in tables 1 through 5.
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The data in this release reflect the regular multi-year GDP revisions
released by the Bureau of Economic Analysis of the U.S. Department of
Commerce on July 28. They also reflect the annual benchmark revision to the
BLS establishment survey data and revisions to hours series released by BLS
on June 2. All employment and hours series incorporate new information on
seasonal patterns. In addition, measures of output for the manufacturing
sectors were revised. See Revised Measures. Appendix tables 1-6 show
revised historical series.
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Table A. Productivity and costs: Preliminary second-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 6.2 5.7 -0.4 6.3 2.6 0.1
Nonfarm business 5.3 5.9 0.5 5.3 1.6 -0.1
Manufacturing 5.1 7.0 1.7 4.4 0.8 -0.7
Durable 9.6 13.3 3.4 3.8 0.2 -5.3
Nondurable 0.0 -0.8 -0.8 5.1 1.5 5.1
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Percent change from same quarter a year ago
Business 5.0 6.9 1.7 4.7 1.4 -0.3
Nonfarm business 5.1 7.0 1.8 4.7 1.4 -0.4
Manufacturing 6.9 6.4 -0.4 4.9 1.6 -1.9
Durable 9.5 10.2 0.7 4.9 1.6 -4.2
Nondurable 3.8 1.6 -2.1 4.6 1.3 0.8
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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.
Business
From the first to the second quarter of 2000, business sector
productivity increased at a 6.2-percent annual rate, as output rose 5.7
percent and hours of all persons engaged in the sector fell at a 0.4-percent
annual rate. As revised, labor productivity rose 1.6 percent in the first
quarter as output and hours increased 5.3 and 3.7 percent, respectively
(table 1).
Hourly compensation increased 6.3 percent in the second quarter and 3.5
percent in the first quarter of 2000 (seasonally adjusted annual rates).
This measure includes wages and salaries, supplements, employer contributions
to employee benefit plans, and taxes. Unit labor costs, which reflect
changes in both hourly compensation and productivity, edged up 0.1 percent
during the second quarter, following a 1.9-percent rise in the first quarter
of 2000.
Real hourly compensation, which takes into account changes in consumer
prices, rose at a 2.6 percent annual rate during the second quarter of 2000
after declining 0.4 percent in the previous quarter.
The implicit price deflator for the business sector, which reflects
changes in unit labor costs and unit nonlabor payments, increased 2.5 percent
in the second quarter and 3.0 percent in the first quarter of 2000.
Nonfarm business
Productivity increased 5.3 percent in the nonfarm business sector during
the second quarter of 2000, after rising 1.9 percent in the first quarter
(table 2). Output rose 5.9 percent in the second quarter, after increasing
5.2 percent during the first quarter of 2000. Hours of all persons working
in the sector increased 0.5 percent in the second quarter. This was the
smallest increase in hours since the first quarter of 1996 (when they fell
0.1 percent) and followed a 3.2 percent rise in the first quarter of 2000.
Hourly compensation increased 5.3 percent in the second quarter, after
posting a 3.9-percent gain in the first quarter of 2000. When the rise in
consumer prices is taken into account, real hourly compensation for the second
quarter of 2000 rose 1.6 percent.
Unit labor costs decreased 0.1 percent in the second quarter of 2000,
after rising 1.9 percent one quarter earlier. The implicit price deflator for
nonfarm business output grew 2.2 percent in the second quarter and 3.2 percent
in the first quarter of 2000.
Manufacturing
Productivity increased 5.1 percent in manufacturing, as output rose 7.0
percent and hours of all persons increased 1.7 percent (seasonally adjusted
annual rates). Growth in productivity, output, and hours was quite different
in the durable and nondurable goods subsectors. In durable goods,
productivity rose 9.6 percent, reflecting output growth of 13.3 percent and a
3.4-percent rise in hours of all persons. In nondurable goods, productivity
remained unchanged in the second quarter, as output and hours both fell 0.8
percent (tables 3, 4, and 5).
Hourly compensation of all manufacturing workers increased 4.4 percent
during the second quarter. This reflects growth of 3.8 percent in durable
goods and 5.1 percent in nondurable goods. When the increase in consumer
prices is taken into account, the real hourly compensation of all manu-
facturing workers rose 0.8 percent in the second quarter.
Unit labor costs in manufacturing dropped 0.7 percent in the second
quarter. This marked the third consecutive quarter of falling unit labor
costs for the total manufacturing sector; unit labor costs fell 3.0 percent
in the first quarter of 2000 and 5.1 percent in the fourth quarter of 1999.
In the second quarter of 2000, trends in unit labor costs in the two sub-
sectors were quite different, reflecting the very different growth rates in
productivity. Unit labor costs fell 5.3 percent in durable goods manu-
facturing and rose 5.1 percent in nondurable goods manufacturing. The
increase in unit labor costs in nondurable goods manufacturing was the largest
since a 5.8-percent rise was posted in the second quarter of 1993.
Revised Measures
Current and previous measures for the first quarter of 2000 for the
business, nonfarm business, and manufacturing sectors are compared in table B.
In the business and nonfarm business sectors, both the output and hours
measures grew less than reported on June 6, based on information then
available. Labor productivity growth was revised down. In manufacturing,
productivity growth was revised up to reflect higher output growth and a
larger drop in hours than originally reported.
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Table B. 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 6.1 4.2 3.5 -0.3 1.7
Current 1.6 5.3 3.7 3.5 -0.4 1.9
Nonfarm business:
Previous 2.4 6.1 3.6 4.1 0.2 1.6
Current 1.9 5.2 3.2 3.9 0.0 1.9
Manufacturing:
Previous 7.3 6.8 -0.5 3.6 -0.3 -3.4
Current 7.9 7.1 -0.7 4.6 0.7 -3.0
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Data on manufacturing output for 1997 and 1998 were revised to reflect
newly available data on shipments from the U.S. Census Bureau. There also
were small revisions to earlier years reflecting the incorporation of new
data associated with the 1999 comprehensive revisions to the National Income
and Product Accounts.
Output data for the business and nonfarm business sectors and
compensation series for all sectors incorporate the revisions of the national
income and product accounts produced by the Bureau of Economic Analysis, U.S.
Department of Commerce. In addition, small changes have been made to the
historical estimates of employment in for-profit organizations and
corporations. Labor input measures have been revised further to reflect the
annual benchmarking of employment levels derived from the monthly Current
Employment Statistics (CES) survey that occurred on June 2. Updated seasonal
adjustment factors also have been incorporated into the labor input measures.
These revisions extend back to the first quarter of 1995. Appendix tables
1-6 present quarterly and annual measures for all sectors for 1995-97.
Revised measures: Nonfinancial Corporations
Productivity and cost measures for the first quarter for nonfinancial
corporations also were revised to incorporate more recent information than
was available on June 6. Productivity, output, employee hours, and hourly
compensation grew more slowly than previously reported. Unit profits and the
implicit price deflator were revised up from the preliminary estimates
reported in June (table C).
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Table C. Nonfinancial corporations: Previous and revised productivity and
cost 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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First quarter 2000
Previous 3.6 7.3 3.6 3.5 -0.4 -0.1 14.3 1.6
Current 2.9 6.2 3.2 2.7 -1.1 -0.2 14.9 2.3
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Next release date
The next release of Productivity and Costs is scheduled for 8:30 a.m.
EDT, Wednesday, Sept. 6, 2000. Revised second-quarter measures for business,
nonfarm business, and manufacturing will be released at that time, along with
measures for nonfinancial corporations.
- 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
- Appendix table 1. Business sector: Revised productivity, hourly compensation, unit labor costs, and prices
- Appendix table 2. Nonfarm business sector: Revised productivity, hourly compensation, unit labor costs, and prices
- Appendix table 3. Manufacturing sector: Revised productivity, hourly compensation, and unit labor costs, seasonally adjusted
- Appendix table 4. Durable manufacturing sector: Revised productivity, hourly compensation, and unit labor costs, seasonally adjusted
- Appendix table 5. Nondurable manufacturing sector: Revised productivity, hourly compensation, and unit labor costs, seasonally adjusted
- Appendix table 6. Nonfinancial corporations: Revised productivity, hourly compensation, unit labor costs, unit profits, and prices
- Text version of entire news release
Bureau of Labor Statistics
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Last modified: Tuesday, August 08, 2000
URL: /news.release/prod2.nr0.htm
Table of Contents 
Quarterly Labor Productivity