BLS Report: Productivity increases 7.3% in Q2 2020; unit labor costs rise 12.2% (annual rates)

[mahatmakanejeeves]

Hat tip, progree, for reminding me that the BLS released the report today

Here we go again with idiots from Reuters leaving out the "rate", this time Q2 productivity

Productivity increases 7.3% in Q2 2020; unit labor costs rise 12.2% (annual rates)

Economic News Release USDL 20-1555


Productivity and Costs, Second Quarter 2020, Preliminary


Transmission of material in this release is embargoed until 8:30 a.m. (ET) Friday, August 14, 2020

Technical information: [phone] • [e-mail] • www.bls.gov/lpc
Media contact: [phone] • [e-mail]


PRODUCTIVITY AND COSTS
Second Quarter 2020, Preliminary

Nonfarm business sector labor productivity increased 7.3 percent in the second quarter of 2020, the U.S. Bureau of Labor Statistics reported today, as output decreased 38.9 percent and hours worked decreased 43.0 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates, and show what the percent change would be if the quarterly rate continued for four quarters.) In the four quarters from the second quarter of 2019 to the second quarter of 2020, productivity increased 2.2 percent, reflecting an 11.8-percent decrease in output and a 13.7-percent decrease in hours worked. (See table A1.)

Unit labor costs in the nonfarm business sector increased at an annual rate of 12.2 percent in the second quarter of 2020, following an increase of 9.8 percent in the first quarter. Unit labor costs increased 5.7 percent over the last four quarters.

=========================================================================
Historical Revisions to Productivity and Costs Data

Data in this release reflect the 2020 Annual Update of the National Income and Product Accounts
(NIPA) released by the Bureau of Economic Analysis of the U.S. Department of Commerce on July 30,
2020, and revised measures of output for the manufacturing sectors released by BLS on July 21, 2020.
See “Revised measures” section.
=========================================================================

Labor 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. The 7.3-percent increase in nonfarm business sector labor productivity in the second quarter of 2020 was the largest quarterly increase since the second quarter of 2009, when output per hour increased 8.5 percent. The declines in both output and hours worked in the second quarter of 2020 were the largest in these series, which begin with data for first-quarter 1947.

BLS calculates 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 labor productivity tend to reduce unit labor costs. The 12.2-percent increase in unit labor costs in second-quarter 2020 was the largest increase in this measure since the first quarter of 2014 (12.4 percent), and reflects a 20.4-percent increase in hourly compensation and a 7.3-percent increase in productivity. (See tables A1 and 2.)

Manufacturing sector labor productivity decreased at a 15.5 percent annual rate in the second quarter of 2020, as output fell 47.0 percent and hours worked dropped 37.3 percent. These were the largest quarterly declines in each of these series, which begin with data for 1987. Total manufacturing sector productivity declined 4.1 percent over the last four quarters, as output decreased 15.8 percent and hours worked decreased 12.2 percent. Productivity decreased 28.4 percent in the durable manufacturing sector in the second quarter of 2020, reflecting a 58.1-percent decrease in output and a 41.5-percent decrease in hours worked. Productivity decreased 4.9 percent in the nondurable manufacturing sector, as output decreased 33.2 percent and hours worked decreased 29.8 percent. (See tables A1, 3, 4 and 5.)

Unit labor costs in the total manufacturing sector increased 31.1 percent in the second quarter of 2020, and increased 9.4 percent from the same quarter a year ago. The increase in unit labor costs in the second quarter of 2020 was the largest in the series for total manufacturing, as were unit labor cost increases in the durable manufacturing and nondurable manufacturing sectors. (See table A1.)

The concepts, sources, and methods used for the manufacturing output series differ from those used in the business and nonfarm business output series; these output measures are not directly comparable. See the Technical Notes for a more detailed explanation.

Revised measures

{snip}

______________
The revised Productivity and Costs news release for second-quarter 2020 is scheduled to be released on Thursday, September 3, 2020 at 8:30 a.m. (ET).

* * * * *

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[progree]

1. Here's Table A1 - a great summary of all of the above

Last edited Fri Aug 14, 2020, 04:18 PM - Edit history (1)

I decided to go ahead and Imgur it. I suppose I ought to dump it in a spreadsheet and calculate the corresponding actual (i.e. non-annualized) numbers (or dig in the report for them, they might be somewhere in some far-below table), but anyway, the productivity report has a lot of stats that are a perfect complement to the Q2 GDP report that came out July 30 (after all it's the same quarter that is being talked about)

Q2 GDP report:

https://www.bea.gov/data/gdp/gross-domestic-product
https://www.democraticunderground.com/10142549435

That GDP report featured a 32.9% drop in Q2 GDP on an annualized basis that works out to be a 9.5% actual drop

Back to the productivity report and Table A1

https://www.bls.gov/news.release/prod2.nr0.htm (link is in the OP), Table A1

I left out the last part of Table A1 - which is the breakdown of manufacturing into durable manufacturing and non-durable manufacturing)

Sorry about the fine print. Importantly, in the line below the title, it says,
"percent change from previous quarter at annual rate and from same quarter a year ago"