1.1 percent in the business sector and
0.8 percent in the nonfarm business sector.
Productivity gains in both sectors were due to hours declining faster than output.
In manufacturing, productivity changes in the first quarter were:
-3.4 percent in manufacturing,
-10.0 percent in durable goods manufacturing, and
-0.1 percent in nondurable goods manufacturing.
Manufacturing sector productivity fell for the fourth consecutive quarter. First quarter declines in output and hours in total manufacturing were the largest in these series, which begin with data for the second quarter of 1987; output dropped 22.4 percent and hours fell 19.7 percent (seasonally adjusted annual rates). Output and hours in manufacturing, which includes about 11 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.
Business
Productivity in the business sector rose 1.1 percent in the first quarter of 2009, as output decreased 7.8 percent and hours of all persons at work in the sector - employees, proprietors, and unpaid family workers - fell 8.8 percent (seasonally adjusted annual rates). The decrease in hours was the largest since a decline of 12.1 percent in the first quarter of 1975. When measured from the first quarter of 2008 to the first quarter of 2009, output per hour increased 1.9 percent. This growth rate is lower than the 2.5 percent average annual rate from 2000 to 2007.
Hourly compensation increased 4.1 percent during the first quarter of 2009. Hourly compensation includes wage and salary accruals, supplements, employer contributions to employee benefit plans, and taxes. Real hourly compensation, which takes into account changes in consumer prices, increased 6.6 percent in the first quarter of 2009.
Unit labor costs in the business sector rose 2.9 percent in the first quarter of 2009. Growth in unit labor costs is roughly equal to the change in hourly compensation minus the change in output per hour. Compared to the same quarter a year ago, unit labor costs increased 2.2 percent, more than the 1.4 percent average annual growth that occurred from 2000 to 2007. The implicit price deflator for the business sector, which reflects changes in both unit labor costs and unit nonlabor payments, grew at a 2.4 percent rate in the first quarter.
Nonfarm Business
Productivity in the nonfarm business sector increased 0.8 percent in the first quarter of 2009, as output declined 8.2 percent and hours
of all persons dropped 9.0 percent (seasonally adjusted annual rates). The decrease in hours, 9.0 percent, was the largest since the first
quarter of 1975, when hours fell 12.0 percent. Over the last four quarters, productivity in the nonfarm business sector grew 1.8 percent. This was lower than the 2.5 percent average rate of
growth from 2000 to 2007.
Hourly compensation in the nonfarm business sector grew at a 4.1 percent annual rate in the first quarter of 2009. Real hourly compensation increased 6.6 percent - due to a 2.3 percent decline in consumer prices (seasonally adjusted annual rates).
Unit labor costs grew 3.3 percent in the first quarter of 2009 and the implicit price deflator for nonfarm business increased 2.9 percent. Over the last four quarters, unit labor costs rose 2.4 percent, greater than the 1.4 percent average annual growth rate from 2000 to 2007.
Manufacturing
Productivity decreased 3.4 percent in the manufacturing sector during the first quarter of 2009, as output dropped 22.4 percent and hours fell 19.7 percent (seasonally adjusted annual rates). These were the largest-ever declines in the output and hours series, which begin with data for the second quarter of 1987. Over the last four quarters total manufacturing productivity decreased 3.3 percent. By contrast, output per hour increased at a 3.7 percent average annual rate during the 2000-2007 period.
In the durable goods manufacturing subsector, output plummeted at a 31.0 percent annual rate while hours dropped 23.4 percent, yielding a productivity decline of 10.0 percent. In the nondurable goods producing industries productivity edged down 0.1 percent as a 13.1 percent decline in output was offset by a 13.0 percent decline in hours worked.
The hourly compensation of all manufacturing workers increased 12.8 percent during the first quarter of 2009 and real hourly compensation rose 15.5 percent (seasonally adjusted annual rates). Unit labor costs increased 16.7 percent in the first quarter of 2009, the largest increase in this series since the first quarter of 2000 when this measure increased at the same 16.7 percent rate. From the first quarter of 2008 to the first quarter of 2009, unit labor costs rose 11.5 percent. This was a considerable increase compared to the average annual rate of growth of 0.3 percent from 2000 to 2007.
Fourth quarter and annual measures for nonfinancial corporations
Fourth quarter and annual 2008 measures of productivity and costs were announced for the nonfinancial corporate sector. Output per employee hour fell 3.9 percent for the fourth quarter of 2008 as output and hours fell 10.5 percent and 6.9 percent, respectively. The productivity decline was the largest since the first quarter of 1993 when output per hour fell 5.0 percent. Hourly compensation increased 5.4 percent in the fourth quarter of 2008. Real hourly compensation rose steeply, 15.0 percent, when the 8.4 percent decrease in consumer prices was taken into account. Unit labor costs increased 9.6 percent and unit profits fell 28.8 percent in the fourth quarter of 2008. Productivity for nonfinancial corporations increased 2.5 percent from the same quarter a year ago, slightly lower than the 2.7 percent annual growth rate from 2000 to 2007.
