Description of Measures
BLS publishes three sets of productivity measures for the major sectors and subsectors of the U.S. economy, each using a distinct methodology. One measure includes labor productivity for the major sectors of business, nonfarm business, and nonfinancial corporations and for the subsectors of total, durable, and nondurable manufacturing. The second set includes multifactor productivity for major sectors; and the third measures multifactor productivity for total manufacturing and 20 2-digit Standard Industrial Classification manufacturing industries. Each set of measures involves a comparison of output and input measures.
The traditional measure of labor productivity — output per hour — was first published in 1959, and represents the culmination of a long series of developments in productivity measurement in the Bureau.1 Output, measured net of price change and inter-industry transactions2, is compared to labor input, measured as hours at work in the corresponding sector. These measures are prepared for the business sector, the nonfarm business sector, nonfinancial corporations, and manufacturing, along with subsectors of durable and nondurable goods manufacturing. These measures are available quarterly and are updated and revised eight times a year.
The second set of measures covers multifactor productivity for major U.S. sectors.3 In these measures, output is again measured net of price changes and inter-industry transactions, but the input measure is an aggregate of hours at work and capital service flows. These measures have been developed in recognition of the role capital growth plays in output growth. They are updated annually.
Comparisons of output with a broader set of inputs constitute the third set of measures.4 Because the scope of industries within manufacturing is narrower than that of the nonfarm business sector, output in manufacturing industries includes shipments to both other producers and final consumers.5 Consistent with such an output concept is an input measure which includes intermediate inputs. Accordingly, input includes labor and capital, and also energy, nonenergy materials, and purchased business services. These measures are available for a comprehensive set of 20 manufacturing industries (corresponding to the 2-digit Standard Industrial Classification (SIC) level) as well as for total manufacturing. As the focus narrows to more specific industries, intermediate inputs take on an increasingly important role in productivity measurement and analysis. This set of measures consists of annual data and is updated approximately every 2 years.