Last Modified Date: May 20, 2021
Labor Productivity: Labor productivity describes the relationship between real output and the labor
hours involved in its production. These measures show the changes from period to period in the amount
of goods and services produced per hour worked. Although the labor productivity measures relate output
in a state to hours worked of all persons in that state, they do not measure the specific contribution of labor
to growth in output. 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; the characteristics and
effort of the workforce; and managerial skill.
Output: BLS state-level measures of output for the private nonfarm sector are created using GDP by state
and industry data published by the Bureau of Economic Analysis (BEA). BEA does not produce a private
nonfarm sector measure of real output by state. To create the necessary output series, BLS subtracts
several industry components — the farm sector, private households, and owner-occupied housing — from
GDP by state using a Fisher ideal index formula.
Labor Hours: Hours are the number of hours worked by all employed persons, including wage and salary
workers, self-employed persons, and unpaid family workers. Hours for wage and salary workers are
primarily from BLS Current Employment Statistics (CES) and hours for self-employed and unpaid family
workers are from the BLS Current Population Survey (CPS). The hours are adjusted from an hours paid
basis to an hours worked basis using data from the BLS National Compensation Survey (NCS).