Full text of Productivity and Costs : First Quarter 1971

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v
U. S.
NEWS W

DEPARTMENT OF LABOR

OFFICE OF INFORMATION, WASHINGTON, O. C. 20210

FOR RELEASE:

A.M. Editions
Friday, April 23, 1971

USDL - 71- 232
Bureau of Labor Statistics
961-2431 or 961-3349

Productivity and Costs
First Quarter 1971
Productivity rose substantially in the first quarter in line with a
very sharp rise in output, the U.S. Department of Labor's Bureau of Labor
Statistics announced today.

For the private economy, output per man-hour

increased at an annual rate of 5.3 percent, while, for the nonfarm sector,
the advance was even 1arger--5.9 percent.
Since the automobile strike had a dampening effect on productivity
growth in the fourth quarter, the sharp rise this quarter in part
reflected recovery in production after the settlement of this strike.
Throughout the strike, large numbers of salaried workers in the auto
industry and other industries supplying parts to auto producers were
retained on the payroll.

With the renewal of activity following the

strike, production and sales accelerated,
only moderately.

whi~e

employment increased

Productivity in the nation's factories advanced by

8.7 percent, stimulated by a jump of 11 percent in production.
Compared with the first quarter of last year, output per man-hour
in the private economy advanced by 3.3 percent--about the same as the
average annual rate of increase experienced over the past two decades.

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The large increases in output per man-hour tended to hold down
advances in unit labor costs despite a very sharp rise ,:in hourly compensation.

Unit labor costs in the private economy rose at an annual rate of

3.9 percent.

Hourly compensation, however, increased at an unusually

large rate of 9.4 percent, reflecting in part the recovery from the
dampening effect of the auto strike on hourly compensation in the fourth
quarter.

This part of the increase came about because the weight of the

high-wage auto industry in the index was reduced in the fourth quarter
and increased in the first quarter.

In addition, the auto wage settlement

as well as other settlements raised compensation in the first quarter.
Real compensation per man-hour (hourly compensation adjusted for
changes in the consumer price index) also increased substantially at an
annual rate of 6.3 percent.
While unit labor costs slowed down, unit nonlabor payments (such as
depreciation,profits, interest, etc.) changed only moderately,

incre~sing

slightly faster in the private economy and slightly slower in the nonfarm
sector.

The implicit price deflator, which represents the weighted sum

-of all unit costs, slowed down to an anntlalrate of 4.5 in the private
sect-or and 4.1 percent in the nonfarm sector.

(The full quarterly report relating productivity to wages and prices
will

beavail~ble

about May 4.)

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Table 1.

Year and
quarter

Output per Man-Hour, Hourly Compensation, Unit Costs, and Prices in the Private Economy,
Seasonally Adjusted, (Indexes 1967=100)

Compensation per
man-hour 1./

Real
c omp ens ation per
man-hour '.!:../

costs

Unit nonlabor payments 1/

Implicit
price
deflator !!./

106.0
105.7
106.5
106.9

116.9
117.3
118.3
120.2

102.9
105.1
107.0
10B.1

111.5
112.6
113.9
115.5

123 .. 6

106.2

11B.2

105.B

113.4

129.6

10B.5

121.4

109.5

116.8

Output

Man-hours

Output per
man-hour

107.4
107.6
108.0
106.B

103 . 9
103.1
102.5
101. 3

103.3
104.3
105.4
105.4

120.8
122.4
124.7
126.7

Annual Ave.

107.4

102.7

104.6-

1971
1st

10B.6

101.7

106.8

1970
1st
2nd
3rd
4th

", ,:\ ~ ,,,,,,

•
.
•
•

Unit labor

Percent Change Over Previous Quarter at Annual Rate 5/
1970
1st
2nd
3rd
4th

- 3.0
0.7
1.6
- 4.4

- 0.5
3.0
- 2.6
- 4.4

- 2.5
3.7
4.3
0.1

6.B
5.3
7.7
6.7

0.5
1.1
3.1
1.3

9.6
1.5
3.3
6.7

- 2.0
8.6
7.3
4.3

5.3
4.1
4.7
5.8

Annual Ave.E../

- 0.5

- 1. 3

0. 9

7.1

1.1

6.2

2.3

4.7

6.8

1.5

5. 3

9.4

6.3

3.9

5.4

4.5

3.8

6.4

4.8

1971
1st

-

Percent Change Over Previous Year
1971
1st quarter J.j

---

1.1

- 2.1

See footnotes at end of table 3 .


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2.4

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Table 2.

Year and
quarter

Output

Output per Man-Hour, Hourly Compensation, Unit Costs, and Prices in the
Private Nonfarm Sector, Seasonally Adjusted, (Indexes 1967=100)

Man-hours

Output per
man-hour

Compensa"';
tion per
man-hour )j
-- -

1970
1st
-- 2nd
3rd •
4th •

--~--~--

-

Real
compensa-'
tion per .
man-hour ...2.:/

Unit labor
costs

Unit nonlabor payments II

Implicit
price
deflator !if

107.9
108.0
108.5
107.0

105.2
104.3
103.6
102.6

102.6
103.6
104.7
104.3

119.4
121. 2
123.5
125.3

104.8
104.7
105.5
105.7

116.4
117.0
117.9
120.1

102.2
104.6
106.7
108.4

111.0
112.3
11'3.7
115.7

Annual Ave.

107.9

103.9

103.8

122.3

105.1

117.8

105.5

113.2

1971
1st • '. •

109.0

103.0

105.8

128.1

107.3

121.1

109.9

116.8

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Percent Change Over Previous Quarter at Annual Rate ~I '
1970
1st
2nd
3rd
4th

.. 2.9
0.4
1.7
- 5.2

-

0.1
3.3
2.7
3.9

- 2.9
3.9
4.5
- 1. 4

6.6
5.9
7.9
6.1

0.3
- 0.6
3.2
0.7

9.8
1.9
3.2
7.7

- 3.8
9.8
8.5
6.5

4.8
4.6
5.0
7.2

.
6/
Annual Ave.-

- 0.4

- 1.0

0.6

6.8

0.8

6.2

2.3

4.8

7.6

1.6

5.9

9.3

6.2

3.3

5.7

4.1

4.0

7.6

5.2

1971
1st

Percent Change Over Previous Year
1971
1st quarter

1/

1.0

- 2.1

See footnotes at end of table 3.




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Table 3.

Output per Man-Hour, Hourly Compensation and Unit Labor Costs in the Manufacturing
Sector, Seasonally Adjusted, (Indexes 1967=100)
.... ""

Year and
quarter
1910
1st
2nd
3rd
4th

Output

~I

Man-hours

•
••.
.
.

10S.S
107.7
106.4
102.3

101.S
99.6
9S.0
94.4

Annual Ave.

106.4

9S.4

1971
1st

I "~ Y o I •

105.0

Output per
man-hour

Compensation per
man-hour 1/

Real compensation
per man-hour ]j

Unit labor
costs

106.S
10S.2
10S.6
10S.4 .-

11S.5
120.6
122.9
124.7

104.0
104.2
105 . 1
105.2

110.9
111.4
113.0
115.0

10S.1

121.6

104.6

112.5

.

94.9

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110.7

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127.9

107.1

115.6

Percent Change Over Previous Quarter at Annual Rate 11
1970
1st
2nd
3rd
4th

- 4.4
- 4.0
- 4.7
- 14.6

- 6.0
- S.5
- 6.4
-13.9

1.4
5.2
1.7
- 0.8

6.5
7.1
8.2
6.0

0.2
0.5
3.5
0. 6

4.8
1.7
6.2
7.1

Annual Ave. 2..1

.... 4.0

- 5.1

1.2

6.7

0.7

5.5

10.6

7.5

s, c, ...
2.0

1971
1st

--I. f; ,

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11.0

2.2

-&.7--

Percent ChangeOver Previous Year
1971
1st quarter

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- 3.5

1

- 6.8

See footnotes at end of table.




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FOOTNOTES, TABLES I TO 3
Source: Output data from the Office of Business Economics,
U.S. Department of Commerce and the Federal Reserve Board. Compensation and man-hours data from the Bureau of Labor Statistics,
U.S. Department of Labor and the Office of Business Economics.

11 Wages and salaries of employees plus employers' contributions for social insurance and private benefits plans. Also
includes an estimate of wages, salaries, and supplemental payments
for the self-employed.
11

Compensation per man-hour adjusted for changes in the
Consumer Price Index.

11 Nonlabor payments include profits, depreciation, interest,
rental income and indirect taxes.

il Current dollar gross product divided by constant dollar
gross product.
11 Percent change compounded at annual rate from original
data.

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Percentage change of annual average.

II

Current quarter divided by comparable quarter a year ago.

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Quarterly measures adjusted to annual estimates of output
(gross product originating) from the Office of Business Economics,
U.S. Department of Commerce.

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