2023 Second Quarter (Preliminary) Productivity and Costs — 2023-08-03

Nonfarm business sector labor productivity increased 3.7 percent in the second quarter of 2023, the U.S. Bureau of Labor Statistics reported today, as output increased 2.4 percent and hours worked decreased 1.3 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The decline in hours worked is the first decline since the second quarter of 2020 and was the result of a 1.3-percent decline in average weekly hours; employment was unchanged. From the same quarter a year ago, nonfarm business sector labor productivity increased 1.3 percent, reflecting a 2.6- percent increase in output and a 1.2-percent increase in hours worked; this is the first increase in the four-quarter productivity measure since the fourth quarter of 2021. (See table A1.) Unit labor costs in the nonfarm business sector increased 1.6 percent in the second quarter of 2023, reflecting a 5.5-percent increase in hourly compensation and a 3.7-percent increase in productivity.