The Bureau of Labor Statistics of the U.S. Department of Labor today released revised productivity data for the third quarter of 2006, showing that productivity edged up faster than previously reported and wages, more slowly.
The seasonally adjusted annual rates of productivity growth were 0.4 percent in the business sector and 0.2 percent in the nonfarm business sector. In both sectors, changes in productivity (as measured by output per hour of all persons) are higher than in the preliminary estimates the BLS published Nov.2, as output was revised further upward than hours.
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In manufacturing, the revised productivity increase was 6.7 percent, with durable goods manufacturing rising 9.0 percent and nondurable goods 3.1 percent. Productivity growth in the manufacturing sector also was revised up, as output was revised upward and the previously-reported decrease in hours remained unchanged.
(Output and hours in manufacturing, which includes about 13 percent of U.S. business sector employment, tend to vary more from quarter to quarter than data for the aggregate business and nonfarm business sectors.)
In the business sector productivity grew at an annual rate of 0.4 percent in the third quarter, after gaining 1.1 percent in the previous quarter, as output increased 2.2 percent and hours worked rose 1.8 percent. Labor productivity was up 1.5 percent from the year-ago period, the smallest four-quarter increase since the second quarter of 1997.
Hourly compensation in the sector increased 2.9 percent, after dipping 1.4 percent in the second quarter. Hourly compensation includes wages and salaries, supplements, employer contributions to employee benefit plans, and taxes. But real hourly compensation, which slso takes into account changes in consumer prices, edged down 0.1 percent in the third quarter after falling 6.1 percent in the second.
Unit labor costs rose 2.5 percent in the third quarter, after falling 2.5 percent in the previous quarter.
For the nonfarm business sector, output per hour rose 0.2 percent inthe third quarter, as output rose 2.3 percent and hours 2.1 percent. The year-over-year gain of 1.4 percent was the smallest four-quarter gain in nonfarm productivity since the second quarter of 1997 (1.3 percent). In the second quarter of 2006, productivity had increased 1.2 percent as output grew 2.7 percent and hours 1.5 percent.
Hourly compensation grew 2.6 percent, after declining 1.2 percent in the second quarter. Real hourly compensation declined 0.4 percent in the third quarter, and 5.9 percent in the second.
Unit labor costs in the nonfarm sector rose 2.3 percent, after dropping 2.4 percent in the second quarter.
In manufacturing, productivity increased 6.7 percent in the third quarter as output increased at a seasonally adjusted annual rate of 5.1 percent and hours worked fell at a rate of 1.6 percent. The quarter saw the largest gain in productivity since the third quarter of 2003, when manufacturing output per hour grew 8.6 percent.
In durable goods industries, productivity increased 9.0 percent in as output rose 5.9 percent at hours dipped 2.9 percent. In nondurable goods, the increase was a slower 3.1 percent, reflecting gains of 3.9 percent in output and 0.8 percent in hours.
Average hourly compensation formanufacturing workers rose 2.4 percent in the third quarter of 2006. Hourly compensation for the second quarter was revised substantially downward, from the 4.0-percent increase previously reported to a 5.8-percent decrease. In durable goods industries, hourly compensation increased 4.1 percent in the third quarter, while the nondurable goods sector saw a 0.5-percent decline. When the increase in consumer prices is taken into account, real hourly compensation for all
manufacturing workers declined 0.5 percent in the third quarter.
Unit labor costs in manufacturing fell 4.1 percent in the third quarter and 8.3 percent in the previous quarter, as revised. Unit labor costs declined 4.5 percent in durable goods industries and 3.5 percent in nondurable goods manufacturing.
Among nonfinancial corporations, output per hour grew at a 5.6 percent annual rate, a reversal of the previous quarter’s 4.3-percent decline (as revised). Output rose at a seasonally adjusted annual rate of 7.3 percent and hours worked, at 1.6 percent.
(The nonfinancial corporate sector includes all companies doing business in the United States, except those classified as depository institutions, nondepository institutions, security and commodity brokers, insurance carriers, regulated investment offices, small business investment offices, and real estate investment trusts.)
Additional information, including the full revised productivity and costs report, is available at www.bls.gov.
