2009 Third Quarter (Revised) Productivity and Costs — 2009-12-03

Nonfarm business sector labor productivity increased at an 8.1 percent annual rate during the third quarter of 2009, the U.S. Bureau of Labor Statistics reported today (tables A and 2). This was the largest gain in productivity since the third quarter of 2003, and reflects a 2.9 percent increase in output and a 4.8 percent decline in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates.) Labor productivity is calculated by dividing an index of real output by an index of the combined hours worked of all persons, including employees, proprietors, and unpaid family workers. The productivity measures released today were based on more recent and more complete data than were available for the preliminary report issued last month (see Revised measures). Unit labor costs in nonfarm businesses fell 2.5 percent in the third quarter of 2009, as productivity grew at a faster rate (8.1 percent) than hourly compensation (5.4 percent).