Economic News Release

Productivity and Costs, Third Quarter 2014, Revised


Transmission of material in this release is embargoed until       USDL 14-2182
8:30 a.m. (EST) Wednesday, December 3, 2014

Technical information: (202) 691-5606    dprweb@bls.gov   www.bls.gov/lpc
Media contact          (202) 691-5902    PressOffice@bls.gov




                          PRODUCTIVITY AND COSTS
                       Third Quarter 2014, Revised


Nonfarm business sector labor productivity increased at a 2.3 percent annual 
rate during the third quarter of 2014, the U.S. Bureau of Labor Statistics 
reported today, as output increased 4.9 percent and hours worked increased 
2.5 percent. (All quarterly percent changes in this release are seasonally 
adjusted annual rates.) From the third quarter of 2013 to the third quarter 
of 2014, productivity rose 1.0 percent as output and hours worked increased 
3.1 percent and 2.1 percent, respectively. (See table A.)

Labor productivity, or output per hour, is calculated by dividing an index of 
real output by an index of hours worked of all persons, including employees, 
proprietors, and unpaid family workers. Measures released today are based on 
more recent source data than were available for the preliminary report.

Unit labor costs in the nonfarm business sector fell 1.0 percent in the third 
quarter of 2014, as a 1.3 percent increase in hourly compensation was smaller 
than the 2.3 percent gain in productivity. Unit labor costs increased 1.2 
percent over the last four quarters. (See tables A and 2.)

BLS calculates unit labor costs as the ratio of hourly compensation to labor 
productivity; increases in hourly compensation tend to increase unit labor 
costs and increases in output per hour tend to reduce them.

Manufacturing sector productivity increased 2.9 percent in the third quarter 
of 2014, as output increased 4.2 percent and hours worked increased 1.3 
percent. Productivity increased 3.2 percent in the durable goods sector and 
increased 3.5 percent in the nondurable goods sector. (See tables A, 3, 4, 
and 5.) Over the last four quarters, manufacturing productivity increased 2.7 
percent, as output increased 4.4 percent and hours increased 1.6 percent. 
Unit labor costs in manufacturing fell 1.3 percent in the third quarter of 
2014 and decreased 0.5 percent from the same quarter a year ago. (See tables 
A and 3.)

The concepts, sources, and methods used for the manufacturing output series 
differ from those used in the business and nonfarm business output series; 
these output measures are not directly comparable. See Technical Notes for a 
more detailed explanation.

Preliminary third-quarter 2014 measures were announced today for the 
nonfinancial corporate sector. Productivity increased 1.1 percent as output 
and hours rose 4.0 percent and 2.9 percent, respectively. (See tables C and 
6.)

Revised measures

The measures released today are based on more recent source data than were 
available for the preliminary report. Table B presents previous and revised 
productivity and related measures for the business, nonfarm business, and 
manufacturing sectors, for the second and third quarters of 2014.

In the third quarter of 2014, nonfarm business productivity increased 2.3 
percent, rather than 2.0 percent as reported November 6. The revised figure 
reflects an upward revision to output that was partially offset by a small 
upward revision to hours. Unit labor costs were revised down, and decreased 
1.0 percent rather than increasing 0.3 percent, reflecting both the upward 
revision to productivity and a 1.0 percentage point downward revision to 
hourly compensation growth. In the manufacturing sector, productivity 
increased 2.9 percent rather than increasing 3.2 percent as previously 
reported, as the upward revision to hours was larger than a small upward 
revision to output. Unit labor costs decreased 1.3 percent, a larger 
decrease than the preliminary estimate.

In the second quarter of 2014, nonfarm business productivity, output, and 
hours were unrevised. Unit labor costs fell 3.7 percent, rather than 0.5 
percent as previously reported, the result of a large downward revision to 
hourly compensation. In the manufacturing sector, output and productivity 
growth were both revised up by 0.1 percentage point. Unit labor costs 
decreased 5.4 percent, a larger decrease than previously reported, due 
primarily to a downward revision to hourly compensation.  

Second-quarter 2014 measures of productivity and costs were revised for the 
nonfinancial corporate sector. Productivity increased 2.0 percent rather 
than 4.0 percent as reported November 6. (See table C.)

Complete annual and quarterly data series can be found on the Productivity 
and Costs home page: www.bls.gov/lpc/#data.
______________







The preliminary Productivity and Costs news release for fourth-quarter 2014 
is scheduled to be released on Thursday, February 5, 2015 at 8:30 a.m. (EST).


==============================================================================
Calendar year 2015 release dates for Productivity and Costs news releases are 
now available at www.bls.gov/schedule/news_release/prod2.htm. 
==============================================================================






======================================================================================================
Table A. Revised third-quarter 2014 measures: percent change from previous quarter, at annual rate 
(Q to Q) and from same quarter a year ago (Y to Y)

Sector                    Nonfarm                                        Durable         Nondurable
                          Business         Business      Manufacturing   Manufacturing   Manufacturing
                       Q to Q   Y to Y  Q to Q  Y to Y  Q to Q  Y to Y  Q to Q  Y to Y  Q to Q  Y to Y
------------------------------------------------------------------------------------------------------
Productivity            2.3      1.0     1.8     0.7     2.9     2.7     3.2     3.3     3.5     2.8
Output                  4.9      3.1     4.9     2.9     4.2     4.4     6.3     6.2     2.0     2.4
Hours                   2.5      2.1     3.0     2.2     1.3     1.6     3.0     2.8    -1.5    -0.4
Hourly 
 compensation           1.3      2.2     0.6     2.0     1.6     2.3     0.8     1.4     2.7     3.7
Real hourly
 compensation           0.2      0.4    -0.5     0.2     0.5     0.4    -0.3    -0.4     1.6     1.9
Unit labor
 costs                 -1.0      1.2    -1.2     1.3    -1.3    -0.5    -2.3    -1.9    -0.7     0.9
======================================================================================================
Table B. Revised and previous measures: third quarter and second quarter 2014 

Sector            Nonfarm                                             Durable           Nondurable
                  Business         Business         Manufacturing     Manufacturing     Manufacturing
              Revised Previous  Revised Previous  Revised Previous  Revised Previous  Revised Previous
------------------------------------------------------------------------------------------------------
                                Percent change, annual rate, third quarter 2014

Productivity    2.3      2.0      1.8      1.5      2.9      3.2      3.2      4.2      3.5      3.0
Output          4.9      4.4      4.9      4.5      4.2      4.1      6.3      6.6      2.0      1.2
Hours           2.5      2.3      3.0      2.9      1.3      0.8      3.0      2.3     -1.5     -1.8
Hourly
 compensation   1.3      2.3      0.6      1.6      1.6      2.5      0.8      1.8      2.7      3.5
Real hourly
 compensation   0.2      1.2     -0.5      0.5      0.5      1.4     -0.3      0.7      1.6      2.4
Unit labor 
 costs         -1.0      0.3     -1.2      0.0     -1.3     -0.7     -2.3     -2.2     -0.7      0.4
------------------------------------------------------------------------------------------------------
                                Percent change, annual rate, second quarter 2014

Productivity    2.9      2.9      2.9      2.9      3.6      3.5      4.0      3.8      4.7      4.6
Output          5.5      5.5      5.7      5.7      7.2      7.1     10.1      9.9      4.0      4.0
Hours           2.5      2.5      2.7      2.7      3.4      3.4      5.9      5.9     -0.6     -0.6
Hourly
 compensation  -0.9      2.3     -1.1      2.1     -1.9      1.6     -3.1      1.0     -0.1      2.4
Real hourly
 compensation  -3.8     -0.7     -4.0     -0.9     -4.8     -1.4     -5.9     -2.0     -3.0     -0.6
Unit labor
 costs         -3.7     -0.5     -3.9     -0.7     -5.4     -1.8     -6.8     -2.7     -4.5     -2.2
======================================================================================================
Table C. Nonfinancial corporations: preliminary third quarter and revised second quarter 2014 

                                                          Real 
                                             Hourly       hourly       Unit                   Implicit
               Produc-                       compen-      compen-      labor      Unit        price
               tivity    Output    Hours     sation       sation       costs      profits     deflator
------------------------------------------------------------------------------------------------------
                                Percent change, annual rate, third quarter 2014

Q to Q           1.1       4.0      2.9       0.9         -0.2         -0.3         3.2         0.7
Y to Y           0.5       3.3      2.8       1.6         -0.2          1.1         1.7         0.7
                                        
                                Percent change, annual rate, second quarter 2014
                                        
Q to Q Revised   2.0       6.5      4.5      -1.5         -4.4         -3.4        47.3         1.7
Q to Q Previous  4.0       8.6      4.5       1.8         -1.2         -2.0        44.5         1.7
======================================================================================================


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