2017 Multifactor Productivity Trends — 2018-03-21

Private nonfarm business sector multifactor productivity increased 0.9 percent in 2017, the U.S. Bureau of Labor Statistics reported today. (See chart 1, table A.) This 2017 increase reflects a 2.9-percent increase in output and a 2.0-percent increase in the combined inputs of capital and labor. Capital services grew by 2.2 percent and labor input�which is the combined effect of hours worked and labor composition�grew by 1.9 percent. The increase in multifactor productivity followed a 0.6-percent decrease in 2016. (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. Multifactor productivity annual measures differ from BLS quarterly labor productivity (output per hour worked) measures because the former also includes the influences of capital services and shifts in the composition of the workforce. Measures for the most recent year of this release are preliminary estimates. See the Technical Notes for additional information.