Nonfarm business unit labor costs increase 2.8 percent from Q1 2016 to Q1 2017

From the first quarter of 2016 to the first quarter of 2017, unit labor costs for nonfarm business increased 2.8 percent. Hourly compensation for nonfarm business increased 3.9 percent over the year, outpacing the 1.1-percent over-the-year increase in nonfarm labor productivity. Unit labor costs and hourly compensation have increased compared to the same quarter in the previous year every quarter since the end of 2013. 

Output for nonfarm business increased 2.4 percent from the first quarter of 2016 to the first quarter of 2017. During this period, hours worked increased 1.3 percent. The last over-the-year decrease in output occurred from the fourth quarter of 2008 to the fourth quarter of 2009, while the last over-the-year decrease in hours worked for nonfarm business occurred from the second quarter of 2009 to the second quarter of 2010. 

These data are from the Labor Productivity and Costs program. All percent changes shown are subject to revision. To learn more, see "Productivity and Costs — First Quarter 2017, Preliminary" (HTML) (PDF). Also see Charts related to the latest "Productivity and Costs" news release. Unit labor costs are calculated as the ratio of hourly compensation to labor productivity. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked for all persons, including employees, proprietors, and unpaid family workers.