2008 Multifactor Productivity Trends — 2010-08-24

Private nonfarm business sector multifactor productivity increased at a 0.1 percent annual rate in 2008, the U.S. Bureau of Labor Statistics reported today. (See chart 1, table A.) This was the slowest gain in multifactor productivity since 1995. (See table 1.) Multifactor productivity measures the change in output per unit of combined inputs of labor and capital. Multifactor productivity is designed to measure the joint influences on economic growth of technological change, efficiency improvements, returns to scale, reallocation of resources, and other factors, allowing for the effects of capital and labor. Multifactor productivity, therefore, differs from labor productivity (output per hour worked) measures that are published quarterly by BLS since it includes information on capital services and other data that are not available on a quarterly basis. Additionally, multifactor productivity measures for the private business and private nonfarm business sectors account for shifts in the composition of labor. Estimates of labor composition are not included in the quarterly labor productivity measures.