2015 (Preliminary) Multifactor Productivity Trends — 2016-05-05

Private nonfarm business sector multifactor productivity increased at a 0.2-percent annual rate in 2015, the U.S. Bureau of Labor Statistics reported today. (See chart 1, table A.) This 2015 gain reflected a 2.8-percent increase in output and a 2.6-percent increase in the combined inputs of capital and labor. Capital services grew by 2.6 percent and labor input�which is the combined effect of hours worked and labor composition�also grew by 2.6 percent. Capital intensity, defined as capital services per hour, increased at a 0.4-percent annual rate in 2015, which is the first increase in this measure since 2010. (See table 1.) Multifactor productivity is calculated by dividing an index of real output by an index of combined units of labor input and capital services. It is designed to measure the joint influences of technological change, efficiency improvements, returns to scale, reallocation of resources, and other factors of economic growth, accounting for the effects of capital and labor.