2014 First Quarter (Preliminary) Productivity and Costs — 2014-05-07

Nonfarm business sector labor productivity decreased at a 1.7 percent annual rate during the first quarter of 2014, the U.S. Bureau of Labor Statistics reported today. The decrease in productivity reflects increases of 0.3 percent in output and 2.0 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2013 to the first quarter of 2014, productivity increased 1.4 percent as output and hours worked rose 3.2 percent and 1.7 percent, respectively. (See table A.) Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers. Unit labor costs in nonfarm businesses increased 4.2 percent in the first quarter of 2014, due to both the decline in productivity and a 2.4 percent increase in hourly compensation. Unit labor costs increased 0.9 percent over the last four quarters.