2020 Multifactor Productivity Trends — 2021-03-23

Private nonfarm business sector multifactor productivity decreased 1.7 percent in 2020, the U.S. Bureau of Labor Statistics reported today. (See table A.) This 2020 decrease reflects a 4.2-percent decrease in output and a 2.5-percent decrease in the combined inputs of capital and labor. Capital services grew by 2.4 percent and labor input�which is the combined effect of hours worked and labor composition�decreased by 5.2 percent. (See table 1.) Multifactor productivity (MFP) 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 workers. Measures for the most recent year of this release are preliminary estimates. See the Technical Notes for additional information.