Economic News Release

Productivity and Costs, Third Quarter 2014, Preliminary


Transmission of material in this release is embargoed until       USDL 14-2036
8:30 a.m. (EST) Thursday, November 6, 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, Preliminary
                        

Nonfarm business sector labor productivity increased at a 2.0 percent annual 
rate during the third quarter of 2014, the U.S. Bureau of Labor Statistics 
reported today, as output increased 4.4 percent and hours worked increased 
2.3 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 0.9 percent as output and hours worked increased 
3.0 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.       

Unit labor costs in the nonfarm business sector rose 0.3 percent in the 
third quarter of 2014, as a 2.3 percent increase in hourly compensation was 
larger than the 2.0 percent increase in productivity. Unit labor costs 
increased 2.4 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 3.2 percent in the third quarter 
of 2014, as output increased 4.1 percent and hours worked increased 0.8 
percent. In the durable goods manufacturing sector, productivity grew 4.2 
percent, reflecting a 6.6 percent increase in output and a 2.3 percent 
increase in hours. In nondurable goods industries, productivity grew 3.0 
percent, as output increased 1.2 percent and hours worked fell 1.8 percent. 
(See tables A, 3, 4, and 5.) Over the last four quarters, manufacturing 
productivity increased 2.8 percent, as output increased 4.4 percent and 
hours increased 1.5 percent. Unit labor costs in manufacturing decreased 0.7 
percent in the third quarter of 2014 and increased 0.6 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. 

Revised measures

Revised and previous measures for the second quarter of 2014 are shown in 
tables B and C, and cover the following major sectors: nonfarm business, 
business, manufacturing, and nonfinancial corporations.

In the second quarter of 2014, nonfarm business sector productivity 
increased 2.9 percent, rather than 2.3 percent as reported September 4. The 
revised figure reflects an upward revision to output and a small downward 
revision to hours worked. Unit labor costs decreased 0.5 percent during the 
second quarter--rather than decreasing 0.1 percent as previously reported--
due to the upward revision to productivity. In the manufacturing sector, 
productivity growth was revised up to 3.5 percent due to both an upward 
revision to output and a small downward revision to hours. Unit labor costs 
decreased 1.8 percent, a larger decrease than previously reported.

Second-quarter 2014 measures of productivity and costs were revised for the 
nonfinancial corporate sector. Productivity increased 4.0 percent rather 
than the preliminary estimate of 3.1 percent. (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 revised Productivity and Costs news release for third-quarter 2014 is 
scheduled to be released on Wednesday, December 3, 2014 at 8:30 a.m. (EST).



======================================================================================================
Table A. Preliminary 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             2.0      0.9     1.5     0.6     3.2     2.8     4.2     3.5     3.0     2.7
Output                   4.4      3.0     4.5     2.8     4.1     4.4     6.6     6.3     1.2     2.2
Hours                    2.3      2.1     2.9     2.2     0.8     1.5     2.3     2.7    -1.8    -0.5
Hourly 
 compensation            2.3      3.3     1.6     3.0     2.5     3.4     1.8     2.7     3.5     4.6
Real hourly
 compensation            1.2      1.4     0.5     1.2     1.4     1.6     0.7     0.9     2.4     2.7
Unit labor
 costs                   0.3      2.4     0.0     2.4    -0.7     0.6    -2.2    -0.8     0.4     1.8
======================================================================================================
Table B. Revised and previous measures: 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, second quarter 2014 
Productivity    2.9     2.3       2.9     2.3       3.5     3.3       3.8      3.4     4.6       4.7
Output          5.5     5.0       5.7     5.1       7.1     6.9       9.9      9.6     4.0       4.0
Hours           2.5     2.6       2.7     2.8       3.4     3.5       5.9      6.0    -0.6      -0.7
Hourly 
 compensation   2.3     2.3       2.1     2.1       1.6     1.6       1.0      0.9     2.4       2.5
Real hourly 
 compensation  -0.7    -0.7      -0.9    -0.9      -1.4    -1.4      -2.0     -2.0    -0.6      -0.5
Unit labor 
 costs         -0.5    -0.1      -0.7    -0.2      -1.8    -1.6      -2.7     -2.3    -2.2      -2.2
======================================================================================================
Table C. Nonfinancial corporations: revised and previous second-quarter 2014 measures
                                                        Real 
                                           Hourly       hourly        Unit                    Implicit
             Produc-                       compen-      compen-       labor       Unit        price
             tivity    Output     Hours    sation       sation        costs       profits     deflator
------------------------------------------------------------------------------------------------------ 
                                Percent change, annual rate, second quarter 2014
Revised        4.0      8.6        4.5      1.8         -1.2          -2.0         44.5         1.7
Previous       3.1      7.8        4.5      1.8         -1.2          -1.2         38.8         1.7
====================================================================================================== 

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Last Modified Date: November 06, 2014
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