2021 Total Factor Productivity — 2022-03-24

Private nonfarm business sector total factor productivity (TFP) increased 3.2 percent in 2021, the U.S. Bureau of Labor Statistics reported today. (See table A.) The 2021 increase in TFP reflects a 7.4-percent increase in output and a 4.1-percent increase in the combined inputs of capital and labor. Capital input grew by 2.0 percent and labor input�which is the combined effect of hours worked and labor composition�increased by 5.3 percent. Total factor productivity (TFP) is calculated by dividing an index of real output by an index of combined inputs of labor and capital. Total factor productivity annual measures differ from BLS quarterly labor productivity (output per hour worked) measures because the former also includes the influences of capital input 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.