Labor productivity increased 2.4 percent from the first quarter of 2018 to the first quarter of 2019

From the first quarter of 2018 to the first quarter of 2019, nonfarm business sector labor productivity increased 2.4 percent, reflecting a 3.9-percent increase in output and a 1.5-percent increase in hours worked. The four-quarter increase in productivity is the largest since a 2.7-percent gain in the third quarter of 2010.

Unit labor costs in the nonfarm business sector increased 0.1 percent over the last four quarters—the lowest four-quarter rate since a 1.7-percent decline in the fourth quarter of 2013. Real hourly compensation increased 0.8 percent from the first quarter of 2018 to the first quarter of 2019.

These data are from the Labor Productivity and Costs program and are seasonally adjusted. For more information, see “Labor Productivity and Costs — First Quarter 2019, Preliminary.” Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers. Unit labor costs describe the relationship between compensation per hour and labor productivity, or real output per hour; they can be used as an indicator of inflationary pressure on producers. Increases in hourly compensation increase unit labor costs, while labor productivity increases offset compensation increases and lower unit labor costs. More labor productivity charts can be found at Graphics for Economic News Releases: Productivity and Costs.