Last Modified Date: May 31, 2012
Labor Productivity: The industry labor productivity measures describe the relationship between
industry output and the labor time involved in its production. They show the changes from period to
period in the amount of goods and services produced per hour. Although the labor productivity measures
relate output to hours of all persons in an industry, they do not measure the specific contribution of labor
or any other factor of production. Rather, they reflect the joint effects of many influences, including
changes in technology; capital investment; utilization of capacity, energy, and materials; the use of
purchased services inputs, including contract employment services; the organization of production;
managerial skill; and the characteristics and effort of the workforce.
Output: Industry output is measured as an annual-weighted index of the changes in the various products
(in real terms) provided for sale outside the industry. Real industry output is usually derived by deflating
nominal sales or values of production using BLS price indexes, but for some industries it is measured by
physical quantities of output.
Industry output measures are constructed primarily using data from the economic censuses and annual
surveys of the U.S. Census Bureau, U.S. Department of Commerce, together with information on price
changes primarily from BLS. Output measures for some mining and utilities industries are based on
physical quantity data from the Energy Information Administration, U.S. Department of Energy, while
output measures for some transportation industries are based on physical quantity data from the Bureau
of Transportation Statistics, U.S. Department of Transportation. Other data sources for some industries
include the U.S. Geological Survey, U.S. Department of the Interior; the U.S. Postal Service; the Postal
Rate Commission; and the Federal Deposit Insurance Corporation.
Labor Hours: The primary source of industry employment and hours data is the BLS Current
Employment Statistics (CES) survey. The CES provides monthly data on the number of total and
nonsupervisory worker jobs held by wage and salary workers in nonfarm establishments, as well as data
on the average weekly hours of nonsupervisory workers in those establishments. CES data are
supplemented with data from the Current Population Survey (CPS) to estimate employment and hours
of self-employed and unpaid family workers in each industry. Data from the CPS, together with CES
data, are also used to estimate the historical average weekly hours of supervisory workers for each
industry. CES and CPS data are supplemented or further disaggregated for some industries using data
from the BLS Quarterly Census of Employment and Wages (QCEW), the Census Bureau, or other
sources. Other sources of employment and hours data for some service industries include the Association
of American Railroads, the U.S. Department of Transportation, and the U.S. Postal Service. Hours of all
persons in an industry are treated as homogeneous and are directly aggregated.
Unit Labor Costs: Unit labor costs represent the cost of labor required to produce one unit of output.
The unit labor cost indexes are computed by dividing an index of industry labor compensation by an
index of real industry output. Unit labor costs also describe the relationship between compensation per
hour and real output per hour (labor productivity). Increases in hourly compensation increase unit labor
costs; increases in labor productivity offset compensation increases and lower unit labor costs.
Compensation, defined as payroll plus supplemental payments, is a measure of the cost to the employer
of securing the services of labor. Payroll includes salaries, wages, commissions, dismissal pay, bonuses,
vacation and sick leave pay, and compensation in kind. Supplemental payments include legally required
expenditures and payments for voluntary programs. The legally required portion consists primarily of
Federal old age and survivors’ insurance, unemployment compensation, and workers’ compensation.
Payments for voluntary programs include all programs not specifically required by legislation, such as the
employer portion of private health insurance and pension plans.
Revisions: The measures in this news release incorporate data from the 2010 Service Annual Survey
published by the Census Bureau. The labor productivity and output series for all industries have been
revised for 2009 and earlier years as a result. This news release also incorporates the annual benchmark
revision of the BLS Current Employment Statistics (CES) survey published in February 2012. All of the
measures for 2010 in this release are preliminary and subject to revision.
Additional Information: The industries included in this release are classified according to the 2007
NAICS. While the rates of change reported by BLS in this news release are rounded to one decimal
place, all industry productivity percent changes are calculated using index numbers rounded to three
Year-to-year movements in industry productivity may be erratic, particularly in smaller industries. The
annual measures based on sample data may differ from measures generated by a census of
establishments in the industry. Annual changes in an industry’s output and use of labor may reflect
cyclical changes in the economy as well as long-term trends. As a result, long-term productivity trends
tend to be more reliable indicators of industry performance than year-to-year changes.
Industry productivity and related indexes; rates of change; and levels of industry employment, hours,
nominal value of production and labor compensation can be accessed online by visiting the Labor
Productivity and Costs web site at www.bls.gov/lpc. Additional information is available by calling the
Division of Industry Productivity Studies (202-691-5618) or by sending an e-mail to email@example.com.
Information in this report will be made available to sensory-impaired individuals upon request. Voice
phone: 202-691-5618; TDD message referral phone number: 1-800-877-8339.
To subscribe to the industry productivity program’s news releases, customers can register on the BLS
website at https://subscriptions.bls.gov/accounts/USDOLBLS/subscriber/new.