U.S. nonfarm labor productivity grew at a 3.3 percent annual rate during the second quarter of 2015, the U.S. Bureau of Labor Statistics has reported, as output increased 4.7 percent and hours worked increased 1.4 percent.

From the second quarter of 2014 to the second quarter of 2015, productivity increased 0.7 percent, reflecting increases in output and hours worked of 3.3 percent and 2.6 percent, respectively. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors and unpaid family workers.

The BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs, and increases in output per hour tend to reduce them. Unit labor costs in the nonfarm business sector decreased 1.4 percent in the second quarter of 2015, reflecting a 1.8-percent increase in hourly compensation and a 3.3-percent increase in productivity. Unit labor costs increased 1.7 percent over the last four quarters.

Manufacturing sector labor productivity increased 2.3 percent in 2015’s second quarter, as output increased 1.3 percent, and hours worked decreased 0.9 percent. Productivity increased 2.8 percent in the durable manufacturing sector and 1.2 percent in the nondurable goods sector. Over the past four quarters, manufacturing productivity increased one percent, as output increased 2.3 percent, and hours increased 1.2 percent. Unit labor costs in manufacturing decreased 2.2 percent in the second quarter of 2015 and increased 0.2 percent from the same quarter a year ago.