2010 Multifactor Productivity Trends — 2012-03-21

Private nonfarm business sector multifactor productivity increased at a 3.5 percent annual rate in 2010, the U.S. Bureau of Labor Statistics reported today. This was the largest increase recorded in the series, which began in 1987. (See chart 1, table A.) The multifactor productivity gain in 2010 reflected a 4.0 percent increase in output and 0.5 percent increase in the combined inputs of capital and labor. Capital services grew by 0.4 percent, and labor input � which is the combined effect of hours worked and labor composition � grew 0.5 percent. (See table A, table 1.) The combination of fast-rising output and a modest increase in capital services caused output per unit of capital services to rise 3.6 percent, the largest gain since the series began in 1987. Multifactor productivity measures the change in output per unit of combined capital and labor input.