Unit labor costs in nonfarm businesses decreased 0.1 percent in the third quarter of 2010, because productivity grew 2.3 percent while hourly compensation increased 2.2 percent. Over the last four quarters, unit labor costs declined 1.1 percent. BLS defines unit labor costs as the ratio of hourly compensation to labor productivity; increases in hourly compensation tend to increase unit labor costs and increases in output per hour tend to reduce them.
Business sector productivity increased 2.5 percent in the third quarter of 2010, as output increased 3.7 percent and hours increased 1.2 percent. Over the last four quarters, business sector productivity increased 2.6 percent.
Manufacturing sector productivity rose 0.6 percent in the third quarter of 2010, as output and hours grew 4.2 percent and 3.6 percent, respectively. In the durable manufacturing subsector, output per hour declined 0.5 percent as output grew 6.0 percent but hours grew faster, 6.5 percent. In nondurable goods industries productivity increased 3.2 percent, due both to an increase in output and a decline in hours. Over the last four quarters, total manufacturing productivity increased 4.0 percent as output rose 7.1 percent and hours increased 3.0 percent Manufacturing unit labor costs increased 1.0 percent in the third quarter of 2010, but fell 2.9 percent over the last four quarters.
The data sources and methods used in the preparation of the manufacturing output series differ from those used in preparing the business and nonfarm business output series, and these measures are not directly comparable.
Preliminary third-quarter 2010 data for the nonfinancial corporate sector also were released today. Output per hour fell 2.4 percent as output declined 0.2 percent and hours rose 2.3 percent.
