2024 Total Factor Productivity — 2025-03-21

Total factor productivity (TFP) in the private nonfarm business sector increased 1.3 percent in 2024, the U.S. Bureau of Labor Statistics reported today. (See table A.) The 2024 increase in TFP reflects a 2.9-percent increase in output and a 1.6-percent increase in the combined inputs of capital and labor. Capital input grew 2.9 percent and labor input�which is the combined effect of hours worked and labor composition�increased 0.7 percent. The 2024 growth in TFP, output, and combined inputs shows a similar pattern as 2023 and represents 2 years of growth consistent with the pre-COVID-19 year of 2019. Total factor productivity is calculated by dividing an index of real output by an index of combined units of labor input and capital input. Total factor productivity annual measures differ from BLS quarterly labor productivity (output per hour worked) measures because TFP includes the influences of capital input and shifts in the composition of workers.