The BLS productivity release originally dated February 2, 2017, retained here in its February 8 reissue, puts fourth-quarter nonfarm-business productivity growth at 1.3 percent. Output rose 2.2 percent and hours rose 0.9 percent. All three are seasonally adjusted annual rates: they express the quarter’s pace on a yearly basis, not the actual percentage change during three months. [prod2_02022017]
For annual-average 2016 compared with annual-average 2015, the same document reports productivity up 0.2 percent, output up 1.7 percent and hours up 1.5 percent. A third comparison, fourth quarter against fourth quarter, puts productivity growth at 1.0 percent. Choosing among these measures changes the question being answered; the numbers are not competing estimates of one interval. [prod2_02022017]
The January 31 Employment Cost Index adds another distinction. Civilian compensation costs rose 0.5 percent in the three months ending December; wages rose 0.5 percent and benefits 0.4 percent. Those seasonally adjusted changes are not annualized. Civilian ECI covers private industry and state and local government, using fixed employment weights to control changes in occupational and industry mix. [eci_01312017]
Nonfarm-business unit labor costs instead relate hourly compensation to output per hour. They rose at a seasonally adjusted annual rate of 1.7 percent in the fourth quarter and 1.9 percent over four quarters. The ratio uses the productivity program’s own compensation measure, not ECI, and is not exact subtraction of rounded growth rates. A comparison sheet should therefore carry period, population and denominator beside each figure. Both releases originate at BLS; they are complementary measurements, not independent confirmation. [prod2_02022017][eci_01312017]
Source documents
- Productivity and Costs, fourth quarter 2016 preliminary; February 8 reissuehttps://www.bls.gov/news.release/archives/prod2_02022017.htm
- Employment Cost Index – December 2016https://www.bls.gov/news.release/archives/eci_01312017.htm