U.S. Labor Productivity Fell in Q1

Washington, DC, June 7, 2016—Nonfarm business sector labor productivity decreased at a 0.6% annual rate during the first quarter of 2016, the U.S. Bureau of Labor Statistics has reported, as output increased 0.9% and hours worked increased 1.5%.

From the first quarter of 2015 to the first quarter of 2016, productivity increased 0.7%. Unit labor costs in the nonfarm business sector increased 4.5% in the first quarter of 2016, reflecting a 3.9% increase in hourly compensation and a 0.6% decline in productivity.

Unit labor costs increased 3.0% over the last four quarters.

Manufacturing sector labor productivity increased 1.3% in the first quarter of 2016, as output increased 0.6% and hours worked decreased 0.7%. Productivity decreased 0.6% in the durable goods manufacturing sector and increased 4.2% in the nondurable goods sector.

Over the last four quarters, manufacturing productivity increased 1.3%, as output increased 0.6% and hours declined 0.7%. Unit labor costs in manufacturing increased 1.1% in the first quarter of 2016 and rose 3.6% from the same quarter a year ago.

Hourly compensation increased 2.5% in the first quarter of 2016, and 5.0% since the same quarter a year ago—the largest four-quarter gain since a 5.8% increase from the first quarter of 2004 to the first quarter of 2005.