Productivity and Costs, Second Quarter, 2000 (revised)
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PRODUCTIVITY AND COSTS
Second 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 second quarter of 2000. The seasonally adjusted annual
rates of productivity change in the second quarter were:
6.5 percent in the business sector and
5.7 percent in the nonfarm business sector.
In both sectors, increases in productivity were larger than reported on
Aug. 8, reflecting both upward revisions in output and downward revisions in
hours of all persons. (See table C.)
In manufacturing, the revised productivity changes in the second quarter
were:
5.4 percent in manufacturing,
10.6 percent in durable goods manufacturing, and
-0.8 percent in nondurable goods manufacturing.
In total manufacturing, the change in productivity was revised upward
compared with the preliminary estimate. 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; the differences between
these measures and the preliminary second-quarter figures issued on Aug. 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.
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Table A. Productivity and costs: Revised 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 6.5 5.9 -0.6 6.4 2.7 -0.1
Nonfarm business 5.7 6.1 0.4 5.3 1.7 -0.4
Manufacturing 5.4 7.3 1.9 3.3 -0.3 -2.0
Durable 10.6 14.4 3.4 2.9 -0.7 -7.0
Nondurable -0.8 -1.3 -0.5 3.7 0.1 4.5
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Percent change from same quarter a year ago
Business 5.1 6.9 1.7 4.7 1.5 -0.4
Nonfarm business 5.2 7.0 1.8 4.7 1.5 -0.4
Manufacturing 7.0 6.5 -0.4 4.6 1.3 -2.2
Durable 9.7 10.5 0.7 4.7 1.4 -4.6
Nondurable 3.6 1.5 -2.0 4.3 1.0 0.6
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Business
From the first to the second quarter of 2000, business sector
productivity rose at a 6.5 percent annual rate, as output increased 5.9
percent and hours of all persons engaged in the sector decreased 0.6 percent
(table A). In the previous quarter, productivity had increased 1.6 percent,
reflecting a 5.3-percent increase in output and a 3.7-percent increase in
hours (table 1).
A rise in hourly compensation of 6.4 percent in the second quarter was
the largest increase in that measure since the fourth quarter of 1997, when
it rose 6.5 percent (seasonally adjusted annual rates). 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, increased at a 2.7 percent annual rate in the
second quarter of 2000, after falling at a 0.4 percent annual rate in the
first quarter.
Changes in unit labor costs reflect changes in both hourly compensation
and productivity. Unit labor costs decreased 0.1 percent in the second
quarter of 2000, after rising 1.9 percent in the first quarter (seasonally
adjusted annual rates). The implicit price deflator for the business sector
rose 2.6 percent in the second quarter due to a 7.1-percent rise in unit
nonlabor payments, which was more than enough to offset the slight drop in
unit labor costs.
Nonfarm business
Productivity in the nonfarm business sector increased 5.7 percent during
the second quarter of 2000, as output increased 6.1 percent and hours of all
persons rose 0.4 percent (table A). The increase in hours was the smallest
since the first quarter of 1996, when hours decreased 0.1 percent. In the
first quarter of 2000, nonfarm productivity had increased 1.9 percent, as
output and hours grew 5.2 percent and 3.2 percent, respectively (table 2).
Hourly compensation grew at a 5.3 percent annual rate in the second
quarter of 2000, following a 3.9 percent increase in the first quarter. When
the rise in consumer prices is taken into account, real hourly compensation
increased 1.7 percent in the second quarter of 2000.
In the second quarter of 2000, unit labor costs decreased 0.4 percent in
the nonfarm business sector. This measure had increased 1.9 percent in the
first quarter. Unit nonlabor payments grew 6.6 percent in the second quarter
of 2000, and the implicit price deflator for nonfarm business output rose 2.3
percent (seasonally adjusted annual rates).
Manufacturing
In the second quarter of 2000, productivity increased 5.4 percent in
manufacturing, as output grew 7.3 percent and hours of all persons rose 1.9
percent (seasonally adjusted annual rates). The second-quarter increase in
output per hour was due entirely to a 10.6 percent productivity gain in the
durable goods sector, as output per hour dropped 0.8 percent in the
nondurable goods sector (tables 3, 4, and 5). In durable goods, output grew
14.4 percent, and hours rose 3.4 percent. In contrast, nondurable goods
output and hours both fell--1.3 and 0.5 percent, respectively.
Hourly compensation of all manufacturing workers increased 3.3 percent
during the second quarter of 2000, reflecting a 2.9 percent rise in hourly
compensation in durable goods industries and a 3.7 percent increase in the
nondurable goods sector. Real hourly compensation in the total manufacturing
sector fell off slightly, by 0.3 percent in the second quarter, reflecting a
decline of 0.7 percent in durable goods and a 0.1-percent rise in nondurable
goods. The decline in real hourly compensation in manufacturing was the
first in this series since a 0.8-percent drop in the second quarter of 1997.
Unit labor costs in manufacturing dropped 2.0 percent in the second
quarter of 2000. Trends in the two subsectors differed; unit labor costs
fell 7.0 percent in durable goods and rose 4.5 percent in nondurable goods.
The decline in unit labor costs in the durable goods manufacturing sector was
the third consecutive drop in this series.
Nonfinancial corporations
Preliminary second-quarter 2000 measures of productivity and costs also
were announced today for nonfinancial corporations (tables B and 6).
Productivity increased 5.0 percent during the second quarter, as output rose
5.9 percent and hours increased 0.9 percent (seasonally adjusted annual
rates). 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.
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Table B. Nonfinancial corporations: Preliminary second-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 II 5.0 5.9 0.9 5.6 1.9 0.6 13.5 2.4
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Percent change from same quarter a year ago
2000 II 4.8 7.1 2.2 4.5 1.2 -0.3 5.6 1.0
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Hourly compensation rose 5.6 percent in the second quarter, the
largest rise since a 5.7-percent increase in the fourth quarter of 1997.
When the rise in consumer prices is taken into account, real hourly
compensation increased 1.9 percent in the second quarter of 2000 (table 6).
Unit labor costs for nonfinancial corporations increased 0.6 percent
in the second quarter of 2000, after declining in the two previous
quarters. Unit profits rose 13.5 percent in the second quarter, marking
the second consecutive quarter with a two-digit increase. The implicit
price deflator for nonfinancial corporate output rose 2.4 percent in the
second quarter of 2000.
Revised Measures
Current and previous measures for the second quarter of 2000 for the
business, nonfarm business, and manufacturing sectors are compared in table C.
The quarterly movements differ from those reported on Aug. 8 based on
information then available. In the business and nonfarm business sectors,
upward changes in output and downward revisions to hours led to larger
increases in productivity than previously reported. In the manufacturing
sector, productivity also was revised up, as an upward revision to output
more than offset an upward revision to hours.
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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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Second quarter 2000
Business:
Previous 6.2 5.7 -0.4 6.3 2.6 0.1
Current 6.5 5.9 -0.6 6.4 2.7 -0.1
Nonfarm business:
Previous 5.3 5.9 0.5 5.3 1.6 -0.1
Current 5.7 6.1 0.4 5.3 1.7 -0.4
Manufacturing:
Previous 5.1 7.0 1.7 4.4 0.8 -0.7
Current 5.4 7.3 1.9 3.3 -0.3 -2.0
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Next release date
The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Thursday, Nov. 2, 2000. Preliminary third-quarter measures for business,
nonfarm business, and manufacturing will be released at that time.
- 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:
Wednesday, September 06, 2000
URL: /news.release/prod2.nr0.htm
Table of Contents 
Quarterly Labor Productivity