Unit labor costs in nonfarm businesses rose 2.2 percent in the second quarter of 2011, because hourly compensation increased 1.9 percent while productivity decreased 0.3 percent. Over the last four quarters, hourly compensation increased more than output per hour, and unit labor costs rose 1.3 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.
Manufacturing sector productivity fell 2.0 percent in the second quarter of 2011, as output rose 0.6 percent and hours increased 2.6 percent. Over the last four quarters, manufacturing productivity increased 2.3 percent. Unit labor costs in manufacturing increased 4.4 percent in the second quarter of 2011 and were unchanged (0.0 percent) over the last four quarters.
Productivity fell 3.5 percent in the durable goods sector in the second quarter of 2011 as a 5.1 percent increase in hours outpaced a 1.4 percent increase in output. In contrast, nondurable goods manufacturing productivity increased 1.2 percent as hours decreased faster than output.
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.
Nonfinancial corporate sector productivity increased 1.4 percent in the first quarter of 2011 as output and hours rose 3.6 percent and 2.1 percent, respectively.
