Posted December 7, 2021

Manufacturing labor productivity declined 1.8 percent in Q3

Manufacturing sector labor productivity decreased 1.8 percent in the third quarter of 2021, as output increased 5.1 percent and hours worked increased 7.0 percent, the U.S. Bureau of Labor Statistics reported.

In the durable manufacturing sector, productivity increased 0.7 percent, with a 9.7-percent increase in output and an 8.9-percent increase in hours worked. Nondurable manufacturing sector productivity decreased 3.6 percent, as 0.3-percent growth in output was outpaced by 4.0-percent growth in hours worked. Total manufacturing sector productivity increased 2.2 percent from the same quarter a year ago.

Manufacturing sector output is now 1.0 percent above its level in the fourth quarter of 2019, the last quarter not affected by the COVID-19 pandemic. Hours worked in manufacturing remain 3.2 percent below the fourth-quarter 2019 level. The manufacturing labor productivity index was 4.4 percent higher in third-quarter 2021 than in fourth-quarter 2019, corresponding to an annualized labor productivity growth rate of 2.5 percent during that period. This rate is much higher than the 0.2-percent average annual growth rate during the previous business cycle—from 2007 to 2019—and is just above the longterm rate of 2.3 percent per year from 1987 to 2020.

Nonfarm business sector labor productivity decreased 5.2 percent in the third quarter of 2021, as output increased 1.8 percent and hours worked increased 7.4 percent.

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