Economic News Release

Productivity and Costs by Industry: Wholesale and Retail Trade, Food Services and Drinking Places News Release


Internet: http://www.bls.gov/lpc/home.htm	USDL 08-1184
Technical information: (202) 691-5618		For release: 10:00 a.m.  EDT
Media contact: (202) 691-5902			Thursday, August 21, 2008


		       PRODUCTIVITY AND COSTS BY INDUSTRY:
			WHOLESALE TRADE, RETAIL TRADE, AND
		 FOOD SERVICES AND DRINKING PLACES INDUSTRIES, 2007

	Labor productivity - defined as output per hour - increased in wholesale trade and retail 
trade, and fell in food services and drinking places in 2007 as follows:

       2.1 percent in wholesale trade
       3.7 percent in retail trade and  
      -0.5 percent in food services and drinking places.

Output grew in each of these sectors in 2007.  Hours increased in wholesale trade and in food 
services and drinking places, and declined in retail trade.  Productivity rose in 34 of the 50 detailed 
industries studied. (See table 1.)  Unit labor costs declined in 22 of these industries, were unchanged 
in the retail trade sector, and increased in the wholesale trade and food services and drinking places 
sectors. 

	From a longer term perspective, labor productivity increased at the following average annual 
rates between 1987 and 2007:

       3.3 percent in wholesale trade
       3.3 percent in retail trade and
       0.6 percent in food services and drinking places.

Output and hours increased in all of these sectors over the period.  Productivity rose in 48 of the 50 
detailed industries. (See table 2.)  Unit labor costs fell in 17 industries and in the retail trade sector, 
but grew in the wholesale trade and food services and drinking places sectors during the period.

2006-2007 change

	Wholesale trade:  Labor productivity increased 2.1 percent, as output grew 3.8 percent and 
hours rose 1.7 percent.  Output per hour grew in 12 of the 19 detailed wholesale trade industries in 
2007.  Commercial equipment wholesalers (NAICS 4234) experienced the largest productivity gain, 
13.7 percent.  Unit labor costs fell in seven of the 19 detailed industries, but rose 1.9 percent in 
wholesale trade overall.

	Retail trade:  Labor productivity grew 3.7 percent as output increased 3.0 percent while 
hours fell 0.6 percent.  Output per hour rose in 20 of the 27 detailed retail trade industries in 2007.  
The largest increases in productivity occurred in lawn and garden equipment and supplies stores 
(NAICS 4442) and electronics and appliance stores (NAICS 4431), 17.3 percent and 14.3 percent, 
respectively.  Although unit labor costs fell in 14 of the 27 industries studied, unit labor costs in the 
retail sector as a whole were unchanged.
 
	Food services and drinking places:  Labor productivity fell 0.5 percent as output increased 
1.7 percent and hours grew 2.2 percent.  Two of the four industries in food services and drinking 
places registered productivity gains in 2007.  The largest increase in productivity, 7.0 percent, 
occurred in drinking places (NAICS 7224).  Unit labor costs grew in three of the four detailed 
industries and increased 4.6 percent in food services and drinking places overall.

Long-term trends

	Wholesale trade:  Labor productivity rose 3.3 percent per year, on average, between 1987 
and 2007.  Output increased 4.1 percent per year and hours grew 0.7 percent per year.  Labor 
productivity rose in 17 of the 19 detailed industries.  The fastest growth in output per hour occurred 
in commercial equipment wholesalers (NAICS 4234) and electric goods wholesalers (NAICS 
4236), 15.6 percent and 8.9 percent per year, respectively.  Unit labor costs rose in all but two of the 
wholesale trade industries over the period, and increased 0.9 percent per year overall in the 
wholesale trade sector.

	Retail trade:  Labor productivity increased an average 3.3 percent per year from 1987 to 
2007, while output rose 4.1 percent per year and hours grew 0.7 percent.  Output per hour increased 
in all 27 detailed industries.  Labor productivity rose the fastest in electronics and appliance stores 
(NAICS 4431), 13.4 percent per year, followed by electronic shopping and mail-order houses 
(NAICS 4541) at 12.2 percent per year.  Unit labor costs declined in 15 of the 27 industries in this 
sector during the time period and declined 0.2 percent per year in retail trade overall.

	Food services and drinking places:  Labor productivity grew 0.6 percent per year on 
average, as output increased 2.4 percent per year and hours grew 1.8 percent per year.  Productivity 
increased in all of the food services and drinking places industries from 1987-2007.  Unit labor 
costs also increased in each of the detailed industries, and rose 3.2 per year in food services and 
drinking places overall.

Additional Information

	The measures in this news release incorporate current data from the Census Bureau’s 
Monthly Wholesale Trade Survey (May 2008) and Monthly Retail Trade Survey (April 2008).  Also 
included in this release are BLS employment and hours from the March 2008 Current Employment 
Statistics (CES) survey and wages from the July 2008 Quarterly Census of Employment and Wages.  
The measures replace the wholesale trade, retail trade, and food services and drinking places series 
published on the BLS website, in the news release Productivity and Costs by Industry: Wholesale 
Trade, Retail Trade, and Food Services and Drinking Places, 2006 (released August 28, 2007) and 
in table 50 of the Monthly Labor Review.  All of the measures for 2007 in this release are 
preliminary and subject to revision.

       While the index numbers and rates of change reported by BLS in this news release are 
rounded to one decimal place, all industry productivity percent changes are calculated using index 
numbers to three decimal places.
       
       Industry productivity and cost measures are produced as data become available.  Measures 
for industries in other sectors have been published in separate releases that can be accessed online 
at: http://www.bls.gov/schedule/archives/prin_nr.htm.  Indexes and rates of change for all covered 
industries can be accessed electronically by visiting the Labor Productivity and Costs web site at 
http://www.bls.gov/lpc/#tables.  Data on industry employment, hours, labor compensation, value of 
production, and the implicit price deflator for output for these industries are available upon request 
by calling the Division of Industry Productivity Studies (202-691-5618) or by sending a request by 
e-mail to dipsweb@bls.gov.  
	
       Information in this report will be made available to sensory-impaired individuals upon 
request.  Voice phone: 202-691-5618; TDD message referral phone number:
1-800-877-8339.



			     Technical Note

Labor Productivity

	Industry labor productivity measures describe the relationship 
between industry output and the labor time involved in its production.  They show the 
changes from period to period in the amount of goods and services produced per hour.  
Although labor productivity measures relate output to the hours of all persons in an 
industry, they do not measure the specific contribution of labor or any other factor of 
production.  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 service inputs, including contract employment services; the organization of 
production; managerial skill; and the characteristics and effort of the workforce.
       Long-term productivity trends tend to be more reliable indicators of industry 
performance than are year-to-year changes.  The annual changes in an industry’s output 
and use of labor may reflect cyclical changes in the economy as well as long-term trends.  

Output

	Industry output is measured as sectoral output, the value, in real terms, of goods 
and services produced for sale outside the industry.  Industry output measures for the 
trade and food services and drinking places industries are constructed by deflating 
nominal dollar revenues from the Bureau of the Census, U.S. Department of Commerce, 
with price indexes primarily from BLS.
 
Labor Hours

	The primary source of industry employment and hours data is the BLS 
Current Employment Statistics (CES) survey.  The CES provides monthly data on the 
number of total and nonsupervisory worker jobs held by wage and salary workers in 
nonfarm establishments, as well as data on the average weekly hours of nonsupervisory 
workers in those establishments.  Data from the Current Population Survey (CPS) are 
used to supplement the CES data.  The industry productivity program estimates the 
average weekly hours of supervisory workers for each industry using data from the CPS 
together with the CES data.  Data from the CPS are also used to estimate the employment 
and hours of self-employed and unpaid family workers in each industry.  Hours of all 
workers in an industry are treated as homogeneous and are directly aggregated.

Unit Labor Costs

	Unit labor costs represent the cost of labor required to produce one 
unit of output.  Indexes of unit labor costs are computed by dividing an index of industry 
labor compensation by an index of real industry output.  Unit labor costs also describe the 
relationship between compensation per hour and real output per hour (labor productivity).  
Increases in hourly compensation increase unit labor costs; increases in labor productivity 
offset compensation increases and lower unit labor costs.
	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 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.



Table 1.   Percent change in output per hour, output, hours, compensation, and unit labor costs, 2006-2007

                                                                                      Percent change, 2006-2007
                                                                2007     ---------------------------------------------------
 NAICS                        Industry                       Employment   Output                        Labor     Unit labor
 code                                                       (thousands)  per hour   Output    Hours  compensation   costs

                          Wholesale Trade

42       Wholesale trade                                         6227       2.1       3.8       1.7       5.8        1.9

423          Durable goods                                       3232       2.2       3.8       1.5       5.0        1.2
4231             Motor vehicles and parts                         369      -0.5       1.1       1.7       4.2        3.0
4232             Furniture and furnishings                        120       0.4       3.2       2.8       2.1       -1.1
4233             Lumber and construction supplies                 266      -8.0     -11.4      -3.7      -3.0        9.5
4234             Commercial equipment                             674      13.7      13.2      -0.4       7.5       -5.1
4235             Metals and minerals                              134      -5.5      -3.5       2.2       5.1        8.9
4236             Electric goods                                   364       5.8       9.0       3.0       6.2       -2.6
4237             Hardware and plumbing                            265       0.2      -1.4      -1.6       3.8        5.2
4238             Machinery and supplies                           709       0.3       4.1       3.8       4.5        0.3
4239             Miscellaneous durable goods                      332      -3.2       2.0       5.3       6.1        4.1

424          Nondurable goods                                    2160       1.7       3.6       1.9       4.6        1.0
4241             Paper and paper products                         145       6.9      -1.8      -8.1      -3.1       -1.3
4242             Druggists' goods                                 224      -4.9       0.5       5.7       6.5        6.0
4243             Apparel and piece goods                          163       1.2       3.8       2.6       0.3       -3.4
4244             Grocery and related products                     760       5.7       6.6       0.9       5.2       -1.3
4245             Farm product raw materials                        76       6.0       3.6      -2.3       1.9       -1.6
4246             Chemicals                                        140       1.5       4.1       2.6       5.5        1.3
4247             Petroleum                                        103      -0.2       5.0       5.2       7.6        2.5
4248             Alcoholic beverages                              158       1.0       4.9       3.8       5.1        0.2
4249             Miscellaneous nondurable goods                   391      -3.9      -0.1       4.0       6.1        6.2

425          Electronic markets and agents and brokers            835       3.5       5.1       1.6      11.8        6.3
4251             Electronic markets and agents and brokers        835       3.5       5.1       1.6      11.8        6.3

                            Retail Trade

44-45    Retail trade                                           16547       3.7       3.0      -0.6       3.0        0.0

441          Motor vehicle and parts dealers                     2007       2.2       3.1       0.9       1.2       -1.8
4411             Automobile dealers                              1307       3.2       3.4       0.2       0.8       -2.5
4412             Other motor vehicle dealers                      181       3.0       4.7       1.6       3.2       -1.4
4413             Auto parts, accessories, and tire stores         519      -3.3      -1.1       2.3       1.9        3.0

442          Furniture and home furnishings stores                633       6.6       2.3      -4.0      -2.1       -4.3
4421             Furniture stores                                 309       3.7       2.5      -1.1      -2.7       -5.1
4422             Home furnishings stores                          325       9.7       2.1      -6.9      -1.4       -3.4

443          Electronics and appliance stores                     580      14.3      12.2      -1.9       5.4       -6.1
4431             Electronics and appliance stores                 580      14.3      12.2      -1.9       5.4       -6.1

444          Building material and garden supply stores          1358       3.1      -2.1      -5.1      -1.2        0.9
4441             Building material and supplies dealers          1193       1.4      -3.5      -4.8      -1.1        2.5
4442             Lawn and garden equipment and supplies stor      165      17.3       8.9      -7.1      -2.1      -10.1

445          Food and beverage stores                            2957       2.6       1.3      -1.3       3.7        2.4
4451             Grocery stores                                  2550       2.0       1.0      -1.0       3.8        2.7
4452             Specialty food stores                            252       4.3      -0.4      -4.5       3.3        3.6
4453             Beer, wine and liquor stores                     155       7.3       5.4      -1.7       3.5       -1.9

446          Health and personal care stores                     1031      -0.3       4.1       4.4       7.6        3.4
4461             Health and personal care stores                 1031      -0.3       4.1       4.4       7.6        3.4

447          Gasoline stations                                    876       3.5       0.0      -3.4       2.9        2.9
4471             Gasoline stations                                876       3.5       0.0      -3.4       2.9        2.9

448          Clothing and clothing accessories stores            1595       8.7       4.5      -3.9       3.0       -1.4
4481             Clothing stores                                 1199      10.4       6.5      -3.5       4.9       -1.5
4482             Shoe stores                                      193      -2.5       0.4       2.9       2.6        2.2
4483             Jewelry, luggage, and leather goods stores       204       9.8      -1.6     -10.4      -2.9       -1.3

451          Sporting goods, hobby, book, and music stores        750      -1.6       4.5       6.3       4.1       -0.4
4511             Sporting goods and musical instrument store      546      -1.1       7.3       8.5       6.4       -0.8
4512             Book, periodical, and music stores               204      -3.1      -2.2       0.9      -1.7        0.5

452          General merchandise stores                          3005       1.8       4.0       2.1       5.1        1.1
4521             Department stores                               1587      -5.0      -0.6       4.7       3.4        4.0
4529             Other general merchandise stores                1419       7.1       6.8      -0.3       7.0        0.2

453          Miscellaneous store retailers                       1058       3.8       2.1      -1.6       1.3       -0.7
4531             Florists                                         123      -8.4       0.5       9.7      10.8       10.2
4532             Office supplies, stationery and gift stores      407       9.6       5.2      -4.0      -0.8       -5.7
4533             Used merchandise stores                          177       8.6       5.2      -3.1      -8.4      -12.9
4539             Other miscellaneous store retailers              351       1.2      -0.8      -1.9       5.1        5.9

454          Nonstore retailers                                   697      11.1       9.8      -1.1       5.8       -3.6
4541             Electronic shopping and mail-order houses        299      11.6      11.7       0.1       6.7       -4.5
4542             Vending machine operators                         69       5.3       5.4       0.1       7.7        2.2
4543             Direct selling establishments                    329       8.6       5.6      -2.7       4.5       -1.1

                 Food Services and Drinking Places

722          Food services and drinking places                   9909      -0.5       1.7       2.2       6.4        4.6
7221             Full-service restaurants                        4634      -0.9       1.7       2.6       7.2        5.4
7222             Limited-service eating places                   4199      -1.1       1.1       2.2       6.3        5.2
7223             Special food services                            699       1.2       2.3       1.1       5.3        2.9
7224             Drinking places, alcoholic beverages             377       7.0       6.6      -0.4       0.6       -5.6




Table 2.  Average annual percent change in output per hour, output, hours, compensation, and unit labor costs, 1987-2007

                                                                   Average annual percent change, 1987-2007
                                                             ----------------------------------------------------
 NAICS                        Industry                         Output                        Labor     Unit labor
  code                                                        per hour   Output    Hours  compensation   costs

                           Wholesale Trade

42       Wholesale trade                                         3.3       4.1       0.7       5.0       0.9

423          Durable goods                                       5.4       6.0       0.6       5.1      -0.9
4231             Motor vehicles and parts                        4.0       4.0       0.0       4.3       0.3
4232             Furniture and furnishings                       2.5       2.7       0.3       5.0       2.2
4233             Lumber and construction supplies                0.7       2.4       1.7       4.3       1.8
4234             Commercial equipment                           15.6      16.3       0.6       5.4      -9.3
4235             Metals and minerals                            -0.4       0.2       0.6       4.9       4.7
4236             Electric goods                                  8.9       8.9       0.0       5.3      -3.3
4237             Hardware and plumbing                           1.3       2.5       1.3       5.3       2.7
4238             Machinery and supplies                          2.5       2.8       0.3       4.7       1.9
4239             Miscellaneous durable goods                     1.4       2.8       1.4       5.8       2.9

424          Nondurable goods                                    1.2       1.6       0.4       5.1       3.4
4241             Paper and paper products                        2.7       1.8      -0.9       3.9       2.1
4242             Druggists' goods                                2.0       4.6       2.6      10.4       5.6
4243             Apparel and piece goods                         2.7       2.8       0.0       4.3       1.5
4244             Grocery and related products                    1.1       2.1       1.0       5.0       2.9
4245             Farm product raw materials                      2.2      -0.5      -2.6       3.4       3.9
4246             Chemicals                                      -0.2       0.7       1.0       5.0       4.2
4247             Petroleum                                       2.9       0.3      -2.5       3.3       3.0
4248             Alcoholic beverages                             0.4       2.1       1.6       5.0       2.9
4249             Miscellaneous nondurable goods                  0.3       0.5       0.3       3.8       3.2

425          Electronic markets and agents and brokers           2.1       4.8       2.6       4.9       0.1
4251             Electronic markets and agents and brokers       2.1       4.8       2.6       4.9       0.1

                            Retail Trade

44-45    Retail trade                                            3.3       4.1       0.7       3.9      -0.2

441          Motor vehicle and parts dealers                     2.6       3.7       1.1       4.2       0.4
4411             Automobile dealers                              2.5       3.7       1.1       4.3       0.6
4412             Other motor vehicle dealers                     3.5       5.9       2.3       6.3       0.4
4413             Auto parts, accessories, and tire stores        2.2       2.8       0.6       3.2       0.4

442          Furniture and home furnishings stores               4.1       5.1       0.9       4.2      -0.8
4421             Furniture stores                                3.6       4.4       0.8       3.7      -0.6
4422             Home furnishings stores                         4.9       6.0       1.1       4.7      -1.2

443          Electronics and appliance stores                   13.4      15.4       1.7       4.9      -9.1
4431             Electronics and appliance stores               13.4      15.4       1.7       4.9      -9.1

444          Building material and garden supply stores          3.2       4.9       1.6       4.4      -0.5
4441             Building material and supplies dealers          3.0       5.0       2.0       4.6      -0.3
4442             Lawn and garden equipment and supplies store    4.5       4.1      -0.4       2.6      -1.4

445          Food and beverage stores                            0.6       0.4      -0.1       3.3       2.9
4451             Grocery stores                                  0.4       0.4       0.0       3.5       3.1
4452             Specialty food stores                           0.2      -0.2      -0.4       2.4       2.5
4453             Beer, wine and liquor stores                    2.6       1.0      -1.6       2.4       1.4

446          Health and personal care stores                     2.5       3.9       1.4       5.3       1.3
4461             Health and personal care stores                 2.5       3.9       1.4       5.3       1.3

447          Gasoline stations                                   2.2       1.6      -0.6       2.5       0.9
4471             Gasoline stations                               2.2       1.6      -0.6       2.5       0.9

448          Clothing and clothing accessories stores            5.0       5.0       0.0       3.3      -1.6
4481             Clothing stores                                 5.3       5.6       0.3       3.7      -1.8
4482             Shoe stores                                     3.9       2.7      -1.2       1.9      -0.8
4483             Jewelry, luggage, and leather goods stores      4.7       4.4      -0.3       3.1      -1.3

451          Sporting goods, hobby, book, and music stores       4.1       4.9       0.8       4.1      -0.7
4511             Sporting goods and musical instrument stores    4.9       5.7       0.8       4.4      -1.2
4512             Book, periodical, and music stores              2.5       3.2       0.7       3.5       0.3

452          General merchandise stores                          3.7       5.5       1.7       4.1      -1.3
4521             Department stores                               1.0       2.4       1.4       3.0       0.6
4529             Other general merchandise stores                7.2       9.4       2.1       5.6      -3.4

453          Miscellaneous store retailers                       4.6       4.9       0.3       2.9      -1.9
4531             Florists                                        2.7       0.9      -1.7       1.1       0.2
4532             Office supplies, stationery and gift stores     6.7       6.7       0.0       3.3      -3.2
4533             Used merchandise stores                         5.3       6.5       1.1       3.7      -2.6
4539             Other miscellaneous store retailers             2.7       4.0       1.3       2.9      -1.1

454          Nonstore retailers                                  9.1       9.5       0.3       4.1      -4.9
4541             Electronic shopping and mail-order houses      12.2      16.1       3.4       7.9      -7.1
4542             Vending machine operators                       1.6      -0.5      -2.1       1.9       2.3
4543             Direct selling establishments                   3.4       2.2      -1.2       1.9      -0.3

                 Food Services and Drinking Places

722          Food services and drinking places                   0.6       2.4       1.8       5.7       3.2
7221             Full-service restaurants                        0.7       2.5       1.8       6.7       4.0
7222             Limited-service eating places                   0.6       2.6       2.0       5.4       2.8
7223             Special food services                           1.5       2.6       1.1       4.0       1.4
7224             Drinking places, alcoholic beverages            0.3       0.3       0.0       2.4       2.1



Last Modified Date: August 21, 2008
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