December 8, 2020
Nonfarm Business Sector
Nonfarm business sector labour productivity inched up 4.6% in the third quarter of 2020 as output rose 43.4% and hours worked climbed 37.1%. Bureau of Labour Statistics noted that, “the 4.6-percent gain in productivity in the third quarter follows an increase of 10.6% during the second quarter. Over the last four quarters, nonfarm business productivity increased 4.0 percent, reflecting a 3.4% decline in output and a 7.1% decline in hours worked.”
Moreover, in the nonfarm business sector, unit labor costs declined 6.6% in the third quarter of 2020, and increased 4.0% over the last four quarters. Also, the index levels for output and hours worked remain below their levels in the fourth quarter of 2019, the last quarter before the pandemic of the coronavirus (COVID-19) began. Output and hours worked remain 4.0% and 7.4% remain below their fourth-quarter 2019 levels, respectively.
In the third quarter of 2020, labor productivity for the Manufacturing sector rose 19.9%, as output climbed at a 56.2% annual rate while hours worked rose at an annual rate of 30.3%. BLS also highlighted that, “as of the third quarter of 2020, output remains 5.7 percent below its fourth-quarter 2019 index level, while hours worked is 6.8 percent lower.”
Furthermore, in the durable manufacturing sector, productivity went up 47.0%, reflecting a 99.8% increase in output and a 35.9% rise in hours worked. This sharp increase in durable manufacturing output in the third quarter was due to motor vehicle production. Also, productivity increased 0.7% in the nondurable manufacturing sector as output climbed 22.6% and hours worked went up 21.8%.
In the manufacturing sector, unit labor costs declined 12.2% in the third quarter of 2020, but increased 8.9% from the same quarter a year ago.
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