2020 First Quarter (Revised) Productivity and Costs — 2020-06-04

Nonfarm business sector labor productivity decreased 0.9 percent in the first quarter of 2020, the U.S. Bureau of Labor Statistics reported today, as output decreased 6.5 percent and hours worked decreased 5.6 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2019 to the first quarter of 2020, productivity increased 0.7 percent, reflecting no change in output and a 0.7-percent decrease in hours worked. (See table A1.) Unit labor costs in the nonfarm business sector increased 5.1 percent in the first quarter of 2020, as hourly compensation increased 4.2 percent and productivity decreased 0.9 percent. Unit labor costs increased 1.9 percent over the last four quarters. (See table 2.) BLS calculates 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.