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Thomas StorringDirector – Economics and Statistics
Tel: 902-424-2410Email:

May 07, 2020

The US Bureau of Labor Statistics (BLS) has released preliminary productivity estimates for the first quarter of 2020.  All figures are reported as growth from the previous quarter at seasonally adjusted annualized rates.

BLS quarterly estimates of labor productivity combine output data with hours worked data based primarily on the Current Employment Statistics (CES) survey. The reference period for the CES largely predated many of the COVID-19-related job losses that occurred in the latter part of March. To capture these job losses, adjustments were made to March employment, based on the Department of Labor’s Employment and Training Administration weekly reports of the number of initial claims for unemployment insurance benefits. Hours and related measures--including labor productivity--for the first quarter of 2020 reflect these adjustments.

Nonfarm business sector labour productivity in the US declined 2.5 per cent in the first quarter of 2020, following an increase of 1.2 per cent in the fourth quarter of 2019. Output declined 6.2 per cent while hours worked also down 3.8 per cent.  

US unit labour costs increased 4.8 per cent as the increase in hourly compensation (+2.2%) occurred along with the decline in labour productivity (-2.5%).

Manufacturing sector labour productivity declined 3.3 per cent in the first quarter as output decreased 7.1 percent and hours worked decreased 3.9 percent. Productivity decreased 8.3 percent for durable goods in the first quarter of 2020 and increased 2.1 percent for non-durable goods. Unit labor costs in the total manufacturing sector increased 3.6 percent in the first quarter of 2020.

Notes: labour productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers.  Unit labour costs are calculated as the ratio of hourly compensation to labour productivity; increases in hourly compensation increase unit labour costs while increases in productivity (output per hour) reduce unit labour costs.  US manufacturing output is calculated on a different basis than for all nonfarm businesses, so these series are not directly comparable.

Source: US Bureau of Labor Statistics

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