Productivity up 2.4% in first quarter

The U.S. Department of Labor Bureau of Labor Statistics today reported that productivity — as measured by output per hour of all persons — increased in the first quarter at an annual rate of 2.4 percent in the business sector and 2.6 percent in the nonfarm business sector.

In both sectors, the first-quarter productivity gains were greater than the preliminary estimates reported on May 7, due primarily to upward revisions to output growth.

In manufacturing, the revised productivity changes in the first quarter were 3.6 percent in manufacturing, 2.6 percent in durable goods manufacturing, and 5.7 percent in nondurable goods manufacturing.

The manufacturing productivity growth reflects a 1.2 percent decrease in output and a 4.7 percent decrease in hours. This was the largest decline in hours since a 6.3 percent drop in the third quarter of 2003. Output per hour rose at the highest rate in three years, 5.7 percent, in nondurable goods industries during the first quarter; hours fell by 6.9 percent and output declined 1.6 percent. Total manufacturing productivity grew 4.0 percent from the first quarter of 2007 to the first quarter of 2008, similar to the 3.8 percent average annual increase from 2000 to 2006.

Nonfinancial corporate productivity rose 4.6 percent in the first quarter as output rose 3.2 percent and employee-hours declined 1.4 percent (seasonally adjusted annual rates). From the first quarter of 2007 to the first quarter of 2008 productivity grew 3.0 percent; it had grown 2.6 percent per year from 2000 to 2006. The nonfinancial corporate sector includes all corporations doing business in the United States, except those classified as depository institutions, nondepository institutions, security and commodity brokers, insurance carriers, regulated investment offices, small business investment offices, and real estate investment trusts.