For additional information relating to this article, please contact:
March 05, 2015US PRODUCTIVITY AND COSTS, Q4 2014, REVISED
US nonfarm business sector labour productivity was revised down to a -2.2 percent annual rate from a -1.8 percent annual rate during the fourth quarter of 2014. Labour productivity measured as output per hour was down as output increased slower (+2.6%) than hours worked (+4.9%). From the fourth quarter 2013 to the fourth quarter 2014, productivity decreased 0.1 percent, reflecting slower increase in output (2.9%) than in hours worked (3.0%).
Unit labor costs in nonfarm business sector rose 4.1 percent in the fourth quarter of 2014, reflecting a 1.9 percent increase in hourly compensation and a 2.2 percent decline in labour productivity. Unit labor costs are the ratio of hourly compensation to labor productivity; increases in hourly compensation will increase unit labor costs and increases in output per hour will reduce unit labour costs. Unit labor costs increased 2.6 percent over the last four quarters.
When the annual average indexes of output per hour are compared, nonfarm business sector productivity rose 0.7 percent from 2013 to 2014, reflecting increases of 3.0 percent in output and 2.3 percent in hours worked. The increase in hours worked in 2014 was the largest increase in the annual measure since 1997.
Since 2010, productivity has increased at an average annual rate of 0.7 percent, reflecting average annual growth rates of 2.8 percent in output and 2.1 percent in hours worked. Output per hour has increased at an average annual rate of 2.1 percent since 1990 as output increased 2.8 percent and hours increased 0.7 percent. Unit labor costs rose 1.8 percent from 2013 to 2014 in the nonfarm business sector.
In the manufacturing sector, annual average productivity growth was revised down to 2.2 percent in 2014. Productivity growth over the last four years of 1.5 percent per year on average reflects annual average rates of growth in output and hours of 3.2 percent and 1.7 percent, respectively. Manufacturing unit labor costs increased 0.1 percent in 2014 as the 2.2 percent increase in productivity was outpaced by the 2.3 percent increase in compensation per hour. Real hourly compensation increased 0.6 percent in 2014, after four consecutive years of decreases.
US Bureau of Labor Statistics