The Bureau of Labor Statistics of the U.S. Department of Labor today reported revised productivity data--as measured by output per hour of all persons--for the third quarter of 2004. The seasonally adjusted annual rates of productivity growth in the third quarter were:
2.4 percent in the business sector, and
1.8 percent in the nonfarm business sector.
In both sectors, changes in productivity are similar to the preliminary estimates published November 4. Output and hours were revised upwards in both sectors.
In manufacturing, revised productivity increases in the third quarter were:
4.6 percent in manufacturing,
4.8 percent in durable goods manufacturing, and
5.4 percent in nondurable goods manufacturing.
productivity in the manufacturing sector rose more rapidly than was reported on Nov. 4. Both output and hours were revised up with the revisions to output larger than those to hours. Output and hours in manufacturing, which includes about 13 percent of U.S. business sector employment, tend to vary more from quarter to quarter than data for the aggregate business and nonfarm business sectors.
Business
From the second quarter to the third quarter of 2004, business sector productivity rose at an annual rate of 2.4 percent, as output increased 4.5 percent and hours of all persons engaged in the sector rose 2.0 percent. The hours increase was the largest since a 2.4-percent rise in the third quarter of 1999. Output per hour had increased 2.9 percent in the second quarter.Business sector hourly compensation increased 4.0 percent during the third quarter of 2004, following a 5.2-percent increase in the second quarter (as revised). Hourly compensation includes wages and salaries, supplements, employer contributions to employee benefit plans, and taxes. Real hourly compensation, which takes into account changes in consumer prices, rose 2.1 percent in the third quarter of 2004.
Unit labor costs increased 1.5 percent in the third quarter of 2004, less than the 2.3-percent rise in the second quarter. The implicit price deflator for the business sector, which reflects changes both in unit labor costs and in unit nonlabor payments, rose at a 0.9 percent annual rate in the third quarter of 2004.
Nonfarm business
Output per hour of all persons in the nonfarm business sector rose 1.8 percent during the third quarter of 2004, as output grew 4.2 percent and hours of all persons increased 2.4 percent. Output had also increased 4.2 percent in the second quarter, but because hours rose less, 0.3 percent, nonfarm productivity increased more, 3.9 percent. The 2.4-percent increase in hours was the largest since the third quarter of 1999, when they increased 2.6 percent.Hourly compensation grew 3.6 percent in the third quarter of 2004, less than the 5.9-percent increase in the previous quarter. When the rise in consumer prices is taken into account, real hourly compensation rose 1.8 percent in the third quarter of 2004.
Unit labor costs rose 1.8 percent in the third quarter, similar to the previous quarter, when they rose 1.9 percent. The implicit price deflator for nonfarm business increased 1.6 percent in the third quarter of 2004.
Manufacturing
productivity increased 4.6 percent in manufacturing in the third quarter of 2004, as output increased 4.5 percent and hours of all persons edged down 0.1 percent (seasonally adjusted annual rates). In durable goods industries, productivity increased 4.8 percent, reflecting increases of 6.4 percent in output and 1.6 percent in hours. productivity increased slightly more in the nondurable goods industries, 5.4 percent, as output rose 2.4 percent and hours fell 2.8 percent.The hourly compensation of all manufacturing workers rose 4.6 percent during the third quarter of 2004. In durable goods manufacturing, hourly compensation increased 4.0 percent and in nondurable goods manufacturing it grew 5.4 percent. When the increase in consumer prices is taken into account, real hourly compensation for all manufacturing workers rose 2.7 percent in the third quarter.
Unit labor costs in manufacturing remained unchanged in the third quarter after falling 1.4 percent in the previous quarter. Unit labor costs declined 0.8 percent in durable goods manufacturing in the third quarter, and were unchanged in nondurable goods manufacturing.
