2017 First Quarter (Preliminary) Productivity and Costs — 2017-05-04

Nonfarm business sector labor productivity decreased at a 0.6-percent annual rate during the first quarter of 2017, the U.S. Bureau of Labor Statistics reported today, as output increased 1.0 percent and hours worked increased 1.6 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the first quarter of 2016 to the first quarter of 2017, productivity increased 1.1 percent, reflecting increases in output and hours worked of 2.4 percent and 1.3 percent, respectively. (See table A1.) Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers. Unit labor costs in the nonfarm business sector increased 3.0 percent in the first quarter of 2017, reflecting a 2.4-percent increase in hourly compensation and a 0.6-percent decline in productivity. Unit labor costs increased 2.8 percent over the last four quarters.