2020 Fourth Quarter (Revised) Productivity and Costs — 2021-03-04

Nonfarm business sector labor productivity decreased 4.2 percent in the fourth quarter of 2020, the U.S. Bureau of Labor Statistics reported today, as output increased 5.5 percent and hours worked increased 10.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the fourth quarter of 2019 to the fourth quarter of 2020, nonfarm business sector labor productivity increased 2.4 percent, reflecting a 2.6-percent decline in output and a 4.9-percent decline in hours worked. (See table A1.) Unit labor costs in the nonfarm business sector increased at an annual rate of 6.0 percent in the fourth quarter of 2020, the combined effect of a 1.5-percent increase in hourly compensation and a 4.2-percent decline in productivity. Unit labor costs increased 4.2 percent over the last four quarters, as hourly compensation increased 6.7 percent and productivity increased 2.4 percent. (See table A1.) BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity.