Labor productivity climbed 2.2 percent in third quarter 2015, as output increased 1.8 percent and hours worked declined 0.3 percent. The Bureau of Labor Statistics (BLS) calculated nonfarm business sector labor productivity by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers.

The decline in hours worked was the first decrease since a 4.8-percent decline in the third quarter of 2009. From the third quarter of 2014 to the third quarter of 2015, productivity increased 0.6 percent, reflecting increases in output and hours worked of 2.5 percent and 1.9 percent, respectively.

Unit labor costs—the ratio of hourly compensation to labor productivity in the nonfarm business sector—also increased in third quarter 2015, rising by 1.8 percent. The uptick reflects a 4-percent increase in hourly compensation and a 2.2-percent increase in productivity. Unit labor costs increased 3.0 percent over the last four quarters.

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