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Overall Labor Productivity Down, but Manufacturing Productivity Up

Feb. 1, 2018
Manufacturing sector labor productivity increased 5.7% in the fourth quarter of 2017, as output increased 7.3% and hours worked rose 1.5%.

A new report issued by the U.S. Bureau of Labor Statistics on February 1 shows that nonfarm business sector labor productivity decreased 0.1% during the fourth quarter of 2017,  as output increased 3.2% and hours worked increased 3.3%.

Unit labor costs in the nonfarm business sector increased 2% in the fourth quarter of 2017, due primarily to a 1.8% increase in hourly compensation. Unit labor costs increased 1.3% over the last four quarters.

However, manufacturing sector labor productivity increased 5.7% in the fourth quarter of 2017, as output increased 7.3% and hours worked rose 1.5%.

These were the largest quarterly increases in manufacturing sector productivity and output since the second quarter of 2010, when output per hour increased 7% and output jumped 10.7%.

Productivity increased 6.7% in the durable goods manufacturing sector and 4.5% in the nondurable goods sector in the fourth quarter of 2017.

Over the last four quarters, total manufacturing sector productivity increased 1.1%, as output increased 2.7% and hours worked increased 1.6%. 

Unit labor costs in manufacturing decreased 3.7% in the fourth quarter of 2017 and increased 1.1% from the same quarter a year ago.

Overall Productivity

From the fourth quarter of 2016 to the fourth quarter of 2017, productivity increased 1.1%, reflecting a 3.2% increase in output and a 2.1% increase in hours worked.

Annual average productivity increased 1.2% from 2016 to 2017.

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