2023 First Quarter (Preliminary) Productivity and Costs — 2023-05-04

Nonfarm business sector labor productivity decreased 2.7 percent in the first quarter of 2023, the U.S. Bureau of Labor Statistics reported today, as output increased 0.2 percent and hours worked increased 3.0 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the same quarter a year ago, nonfarm business sector labor productivity decreased 0.9 percent, reflecting a 1.3-percent increase in output and a 2.3-percent increase in hours worked. (See table A1.) The 0.9- percent productivity decline is the first time the four-quarter change series has remained negative for five consecutive quarters; this series begins in the first quarter of 1948. Unit labor costs in the nonfarm business sector increased 6.3 percent in the first quarter of 2023, reflecting a 3.4-percent increase in hourly compensation and a 2.7-percent decrease in productivity. Unit labor costs increased 5.8 percent over the last four quarters.