Economic News Release

Fourth Quarter and Annual Averages 2013, Revised



Transmission of material in this release is embargoed until     USDL 14-0353
8:30 a.m. (EST) Thursday, March 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
           Fourth Quarter and Annual Averages 2013, Revised


Nonfarm business sector labor productivity increased at a 1.8 percent annual 
rate during the fourth quarter of 2013, the U.S. Bureau of Labor Statistics 
reported today. The increase in productivity reflects increases of 3.4 
percent in output and 1.6 percent in hours worked. (All quarterly percent 
changes in this release are seasonally adjusted annual rates.) From the 
fourth quarter of 2012 to the fourth quarter of 2013, productivity increased 
1.3 percent as output and hours worked rose 2.9 percent and 1.7 percent, 
respectively. (See table A.) Annual average productivity increased 0.5 
percent from 2012 to 2013. (See table C.)

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.  The measures released today are 
based on more recent source data than were available for the preliminary 
report.

Unit labor costs in nonfarm businesses decreased 0.1 percent in the fourth 
quarter of 2013, while hourly compensation increased 1.7 percent. Unit labor 
costs fell 0.9 percent over the last four quarters. (See table A.) 

BLS defines 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.

==============================================================================
Data in this release reflect the annual benchmark revision of BLS Current 
Employment Statistics program data on nonfarm employment and hours, and the 
revised seasonal adjustment of those data. More detail can be found in tables 
1 through 6 and appendix tables 1 through 6. See Revised measures.
==============================================================================

Manufacturing sector productivity increased 1.3 percent in the fourth quarter 
of 2013, as output increased 5.0 percent and hours worked increased 3.6 
percent. Productivity increased 3.0 percent in the durable goods sector and 
decreased 0.1 percent in the nondurable goods sector. Over the last four 
quarters, manufacturing productivity increased 1.9 percent, as output 
increased 3.0 percent and hours increased 1.1 percent. Unit labor costs in 
manufacturing decreased 0.1 percent in the fourth quarter of 2013 and 
declined 1.0 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

Quarterly and annual measures of hours and related series--including 
productivity-- were revised back to 1979 for the business, nonfarm business, 
and nonfinancial corporate sectors and back to 1990 for the manufacturing 
sector. The revisions incorporate revised Current Employment Statistics (CES) 
program data published February 7, 2014.  From 2009 forward the data were 
subject to revision as a result of annual benchmarking of CES data and 
revised seasonal adjustment of those data. Prior to 2009 there were small 
revisions due to the reclassification of some industries. Index measures 
related to hours show full historical revisions because the 2009 base year 
values were revised; resulting revisions to percent changes are small. Third 
quarter, fourth quarter, and annual average data for 2013 were also revised 
for regular updates of source data on output and compensation.

Revised and previous measures for the third and fourth quarters of 2013 are 
shown in table B for the business, nonfarm business, and manufacturing 
sectors. Revised annual average measures for 2009 to 2013 are shown in table 
C for the nonfarm business and manufacturing sectors. Revised third quarter 
measures for the nonfinancial corporate sector are shown in table D. 
Quarterly and annual data for all sectors appear in tables 1-6 for 2011 
through 2013 and in appendix tables 1-6 for 2008 through 2010. Full 
historical annual and quarterly measures can be found on the labor 
productivity and costs home page at http://www.bls.gov/lpc/#data. 

In the fourth quarter of 2013, nonfarm business productivity increased 1.8 
percent rather than 3.2 percent as reported February 6. The revised figure 
reflects a 1.5 percentage point downward revision to output and a 0.1 
percentage point downward revision to hours. Unit labor costs decreased 0.1 
percent, a smaller decline than was previously reported. Manufacturing 
productivity growth was revised downward, to 1.3 percent, reflecting a 
downward revision to output that was larger than a downward revision to 
hours.  Due to both the downward revision to productivity and an upward 
revision to hourly compensation, manufacturing unit labor costs decreased 0.1 
percent, rather than falling 1.0 percent as reported in the preliminary 
release. (See table B.) 

In the third quarter of 2013, nonfarm business productivity growth was little 
changed, at 3.5 percent, reflecting a slight upward revision to hours. Unit 
labor costs decreased 2.1 percent, as revised. In the manufacturing sector, 
productivity increased 0.2 percent rather than falling 0.1 percent as 
previously reported. The combination of the upward revision to productivity 
and a downward revision to compensation per hour resulted in a smaller 
increase in manufacturing unit labor costs than previously reported. (See 
table B.) Nonfinancial corporate sector productivity decreased 0.7 percent in 
the third quarter of 2013. (See table D.)

When the annual average indexes of output per hour are compared, nonfarm 
business sector productivity rose 0.5 percent from 2012 to 2013.  Since 2010, 
productivity has increased at an average annual rate of 0.8 percent, 
reflecting average annual growth rates of 2.8 percent in output and 2.0 
percent in hours worked.  In contrast, output per hour had increased 3.3 
percent in 2010 as output increased 3.2 percent and hours declined 0.1 
percent.  In 2009, marked by the trough of the most recent recession, 
productivity grew 3.1 percent as output fell 4.3 percent and hours fell 
faster, 7.2 percent. Unit labor costs rose 1.1 percent from 2012 to 2013, 
similar to the 1.2 percent increase in the previous year. 

In the manufacturing sector, annual average productivity growth was revised 
down to 1.8 percent in 2013, the same rate as in 2012.  Productivity growth 
over the last three years of 1.5 percent per year on average reflected annual 
average rates of growth in output and hours of 3.2 percent and 1.7 percent, 
respectively.  Manufacturing unit labor costs fell 0.9 percent in 2013 as the 
1.8 percent increase in productivity was greater than the 0.9 percent 
increase in compensation per hour. The gain in hourly compensation was the 
smallest in the annual series which extends back to 1988. (See table C.)
______________




The preliminary Productivity and Costs news release for first-quarter 2014 is 
scheduled to be released on Wednesday, May 7, 2014 at 8:30 a.m. (EDT).






======================================================================================================
Table A. Revised fourth-quarter 2013 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             1.8      1.3     1.5     1.7     1.3     1.9     3.0     2.9    -0.1     1.1
Output                   3.4      2.9     3.2     3.4     5.0     3.0     7.5     4.6     2.4     1.2
Hours                    1.6      1.7     1.7     1.6     3.6     1.1     4.4     1.6     2.4     0.1
Hourly
 compensation            1.7      0.3     1.5     0.4     1.2     0.9     1.7     0.9     0.2     0.9
Real hourly
 compensation            0.8     -0.9     0.6    -0.9     0.4    -0.3     0.8    -0.3    -0.6    -0.3
Unit labor costs        -0.1     -0.9    -0.1    -1.4    -0.1    -1.0    -1.3    -2.0     0.3    -0.2
======================================================================================================
Table B. Revised and previous measures: fourth quarter and third quarter 2013
Sector            Nonfarm                                             Durable           Nondurable
                  Business         Business         Manufacturing     Manufacturing     Manufacturing
              Revised Previous  Revised Previous  Revised Previous  Revised Previous  Revised Previous
------------------------------------------------------------------------------------------------------
                        Percent change, annual rate, fourth quarter 2013
                        
Productivity    1.8      3.2      1.5      2.6      1.3      2.0      3.0      3.4     -0.1      1.0
Output          3.4      4.9      3.2      4.4      5.0      6.6      7.5      8.8      2.4      4.1
Hours           1.6      1.7      1.7      1.7      3.6      4.4      4.4      5.2      2.4      3.1
Hourly
 compensation   1.7      1.5      1.5      1.3      1.2      1.0      1.7      0.7      0.2      1.7
Real hourly
 compensation   0.8      0.6      0.6      0.4      0.4      0.2      0.8     -0.2     -0.6      0.8
Unit labor
 costs         -0.1     -1.6     -0.1     -1.3     -0.1     -1.0     -1.3     -2.7      0.3      0.7
------------------------------------------------------------------------------------------------------
                        Percent change, annual rate, third quarter 2013
                        
Productivity    3.5      3.6      3.2      3.4      0.2     -0.1      1.6      1.0     -1.0     -0.8
Output          5.4      5.4      5.6      5.6      1.4      1.3      3.2      3.2     -0.6     -0.8
Hours           1.9      1.7      2.3      2.2      1.1      1.3      1.6      2.1      0.4      0.0
Hourly
 compensation   1.3      1.6      0.9      1.2      0.5      1.2      0.9      0.1     -0.5      3.2
Real hourly
 compensation  -1.2     -1.0     -1.7     -1.4     -2.1     -1.4     -1.6     -2.5     -3.0      0.5
Unit labor
 costs         -2.1     -2.0     -2.2     -2.1      0.2      1.2     -0.7     -0.9      0.6      4.0
======================================================================================================
Table C. Annual average changes in productivity and related measures: 2009-2013

Sector                            Nonfarm Business                         Manufacturing
                        2009    2010    2011    2012    2013  |  2009   2010    2011    2012     2013
--------------------------------------------------------------|---------------------------------------
                                                              | 
Productivity             3.1     3.3     0.5     1.5     0.5  |   0.0    6.3     1.0     1.8      1.8
Output                  -4.3     3.2     2.5     3.7     2.2  | -12.9    6.3     3.1     4.1      2.5
Hours                   -7.2    -0.1     2.0     2.2     1.7  | -12.9    0.0     2.1     2.3      0.7
Hourly                                                        |
 compensation            1.1     2.1     2.5     2.6     1.6  |   3.4    2.4     1.3     1.9      0.9
Real hourly                                                   |
 compensation            1.5     0.4    -0.7     0.5     0.1  |   3.8    0.7    -1.8    -0.2     -0.5
Unit labor costs        -2.0    -1.2     2.0     1.2     1.1  |   3.4   -3.7     0.4     0.1     -0.9
======================================================================================================
Table D.  Nonfinancial corporations: revised third-quarter 2013 productivity and cost measures
       
                                                        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 2013
Revised       -0.7       1.7       2.4       0.9        -1.7           1.6         2.4          2.1
Previous      -0.5       1.7       2.2       1.1        -1.5           1.6         2.4          2.1
======================================================================================================

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Last Modified Date: March 06, 2014
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