Economic News Release

First Quarter 2014, Revised



Transmission of material in this release is embargoed until     USDL 14-0986
8:30 a.m. (EDT) Wednesday, June 4, 2014

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




                        PRODUCTIVITY AND COSTS
                     First Quarter 2014, Revised
                     
                     
Nonfarm business sector labor productivity decreased at a 3.2 percent annual 
rate during the first quarter of 2014, the U.S. Bureau of Labor Statistics 
reported today, as hours increased 2.2 percent and output decreased 1.1 
percent. (All quarterly percent changes in this release are seasonally 
adjusted annual rates.) The decrease in productivity was the largest since 
the first quarter of 2008 (-3.9 percent). From the first quarter of 2013 to 
the first quarter of 2014, productivity increased 1.0 percent as output and 
hours worked rose 2.8 percent and 1.7 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.  The measures released today are 
based on more recent source data than were available for the preliminary 
report.

Unit labor costs in nonfarm businesses increased 5.7 percent in the first 
quarter of 2014, due to both the decline in productivity and a 2.3 percent 
increase in hourly compensation. Unit labor costs increased 1.2 percent over 
the last four quarters. (See tables A and 2.) 

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.

Manufacturing sector productivity increased 3.8 percent in the first quarter 
of 2014, as output increased 2.2 percent and hours worked decreased 1.6 
percent. Productivity increased 4.1 percent in the durable goods sector and 
increased 3.3 percent in the nondurable goods sector. Over the last four 
quarters, manufacturing productivity increased 2.3 percent, as output 
increased 2.5 percent and hours increased 0.2 percent. Unit labor costs in 
manufacturing decreased 0.4 percent in the first quarter of 2014 and declined 
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 first-quarter 2014 measures were announced today for the 
nonfinancial corporate sector. Productivity decreased 3.9 percent in the 
first quarter of 2014 and increased 0.1 percent over the last four quarters. 
(See tables C and 6.) 

Revised measures                

Table B presents previous and revised productivity and related measures 
for the business, nonfarm business, and manufacturing sectors, for the 
first quarter of 2014 and the fourth quarter of 2013. 

In the first quarter of 2014, nonfarm business productivity fell 3.2 
percent, a greater decline than was reported in the preliminary estimate. 
The revised figure reflects a 1.4 percentage point downward revision to 
output and a 0.2 percentage point upward revision to hours. Unit labor costs 
were revised up due to the downward revision to productivity, and grew 5.7 
percent in the first quarter of 2014. In the manufacturing sector, 
productivity growth in the first quarter was revised up to 3.8 percent, due 
to an upward revision to output and a downward revision to hours worked. 
Unit labor costs declined 0.4 percent, rather than increasing 0.1 percent as 
previously reported.
 
In the fourth quarter of 2013, nonfarm business and manufacturing 
productivity were unrevised from the May 7 release. For both sectors, a 
downward revision in hourly compensation accounted for the similar downward 
revision to unit labor costs. 

In the nonfinancial corporate sector, fourth-quarter productivity growth was 
unrevised. (See table C.)
______________  




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






======================================================================================================
Table A. Revised first-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            -3.2      1.0    -3.5     0.9     3.8     2.3     4.1     3.4     3.3     1.2
Output                  -1.1      2.8    -1.7     2.7     2.2     2.5     2.3     3.9     2.1     1.0
Hours                    2.2      1.7     1.8     1.7    -1.6     0.2    -1.7     0.4    -1.2    -0.3
Hourly 
 compensation            2.3      2.3     2.6     2.2     3.4     1.9     2.5     1.0     5.0     3.4
Real hourly 
 compensation            0.4      0.9     0.7     0.8     1.5     0.4     0.6    -0.4     3.1     2.0
Unit labor costs         5.7      1.2     6.3     1.3    -0.4    -0.5    -1.5    -2.3     1.7     2.1
======================================================================================================
Table B. Revised and previous measures: first quarter 2014 and fourth 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, first quarter 2014

Productivity   -3.2     -1.7     -3.5     -1.8      3.8      3.3      4.1      3.6      3.3      2.5
Output         -1.1      0.3     -1.7     -0.2      2.2      1.8      2.3      1.6      2.1      2.0
Hours           2.2      2.0      1.8      1.6     -1.6     -1.4     -1.7     -1.9     -1.2     -0.5
Hourly
 compensation   2.3      2.4      2.6      2.7      3.4      3.3      2.5      3.6      5.0      2.9
Real hourly
 compensation   0.4      0.5      0.7      0.8      1.5      1.4      0.6      1.6      3.1      1.0
Unit labor
 costs          5.7      4.2      6.3      4.7     -0.4      0.1     -1.5     -0.1      1.7      0.4
------------------------------------------------------------------------------------------------------
                        Percent change, annual rate, fourth quarter 2013

Productivity    2.3      2.3      2.1      2.1      1.3      1.3      2.6      2.6      0.3      0.3
Output          3.8      3.8      3.5      3.5      4.7      4.7      6.9      6.9      2.3      2.3
Hours           1.4      1.4      1.5      1.5      3.4      3.4      4.2      4.2      2.0      2.0
Hourly
 compensation   1.7      1.9      1.5      1.7      0.7      1.3     -1.8      1.7      5.4      0.6
Real hourly
 compensation   0.5      0.6      0.3      0.5     -0.5      0.1     -3.0      0.5      4.2     -0.6
Unit labor
 costs         -0.6     -0.4     -0.6     -0.4     -0.6      0.1     -4.3     -0.9      5.1      0.3
======================================================================================================
Table C. Nonfinancial corporations: preliminary first-quarter 2014 and revised fourth-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, first quarter 2014

Q to Q       -3.9       -2.2       1.8      2.1          0.2           6.3        -27.2         0.3
Y to Y        0.1        2.1       2.0      2.0          0.6           1.9         -4.8         0.6

                        Percent change, annual rate, fourth quarter 2013

Revised       2.1        4.3       2.1      1.7          0.5          -0.4          1.6         0.4
Previous      2.1        4.3       2.1      1.8          0.5          -0.4          1.6         0.4
====================================================================================================== 


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Last Modified Date: June 04, 2014
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