2021 Third Quarter (Preliminary) Productivity and Costs — 2021-11-04

Nonfarm business sector labor productivity decreased 5.0 percent in the third quarter of 2021, the U.S. Bureau of Labor Statistics reported today, as output increased 1.7 percent and hours worked increased 7.0 percent. This is the lowest rate of quarterly productivity growth since the second quarter of 1981, when the measure decreased 5.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2020 to the third quarter of 2021, nonfarm business sector labor productivity decreased 0.5 percent. The four-quarter rate is the lowest rate since the third quarter of 2011, when the measure also declined 0.5 percent (See table A1.) Unit labor costs in the nonfarm business sector increased at an annual rate of 8.3 percent in the third quarter of 2021, reflecting a 2.9-percent increase in hourly compensation and a 5.0-percent decrease in productivity. Unit labor costs increased 4.8 percent over the last four quarters.