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Technical note

                                       Technical Note

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).

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Last Modified Date: May 20, 2021