2016 Third Quarter (Preliminary) Productivity and Costs — 2016-11-03

Nonfarm business sector labor productivity increased at a 3.1-percent annual rate during the third quarter of 2016, the U.S. Bureau of Labor Statistics reported today, as output increased 3.4 percent and hours worked increased 0.3 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) The quarterly increase in nonfarm business sector labor productivity was the first increase after three consecutive declines in the measure. From the third quarter of 2015 to the third quarter of 2016, productivity was unchanged. (See table A.) Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers. Unit labor costs in the nonfarm business sector increased 0.3 percent in the third quarter of 2016, reflecting a 3.4-percent increase in hourly compensation and a 3.1-percent increase in productivity. Unit labor costs increased 2.3 percent over the last four quarters.