s

Bureau of Labor Statistics

United States

Department

of Labor

Washington, D.C. 20212

•

Historical, technical

information: (202) 606-5606

Media contact: (202) 606-5902

USDL 94-327

For Release: 10:00 AM EDT

Monday, July 11, 1994

MUL TIF ACTOR PRODU~TIVITY MEASURES. 1991 and 1992

Private Business and Private Nonfarm Business

The Bureau of Labor Statistics of the U.S. Department of Labor today reported

multifactor productivity measures--output per unit of combined labor and capital inputs--for

1991 and 1992. Multifactor productivity differs from the labor productivity (output per hour)

measures, which are published quarterly.

In the most recent years available, multifactor productivity changed at the following

percentage rates:

Private business

Private nonfarm business

1990-91

-1.1

-1.0

1991-92

1.9

1.5

The gains in multifactor productivity were the largest since 1984 and followed 3 years of

declines. The 1991 and 1992 annual changes are summarized in table A; further detail and

historical measures are shown in tables 1 through 7.

A change in multifactor productivity reflects the difference between the change in output

(production of goods and services) and the change in labor and capital inputs engaged in the

production of the output. Multifactor productivity does not measure the specific contributions of

labor, capital, or any other factor of production. Instead, it reflects the joint effects of many

factors, including new technology, economies of scale, managerial skill, and change in the

organization of production.

A change in multifactor productivity reflects the change in output that cannot be

accounted for by the change in combined inputs of labor and capital. In contrast, a change in

labor productivity reflects the change in output that cannot be accounted for by the change in

hours of all persons.

Two major improvements have been incorporated into these multifactor productivity

measures. Real output is now measured using a chain weighted "superlative" index number

formula. Also, labor inputs now reflect an adjustment for changes in the education and work

experience of the work force. These improvements are discussed on page 3.
2

Table A. Productivity and related measures; percentage changes, 1990-91 and 1991-92

1990-91 1991-92

Private Private

Private nonfarm Private nonfarm

Item business 11 business 11 business 11 business 11

Productivity:

Multifactor productivity 2/.................. -1.1 -1.0 1.9 1.5

Output per hour of all ~rsons ............. 0.8 1.0 3.3 3.0

Output per unit of capItal services ....... -3.0 -3.1 1.6 1.2

.Output .................................................. -1.5 -1.5 3.0 2.7

Inputs:

Labor input ......................................... -1.2 -1.4 1.0 1.1

Capital services .................................. 1.5 1.7 1.4 1.5

Combined units of labor and

capital inputs 3/................................ -0.4 -0.5 1.1 1.2

C:sital services per hour of

persons (capital-labor ratio) ............ 3.9 4.2 1.7 1.8

11Excludes government enterprises.

2/ Output per unit of combined labor and capital inputs.

3/ Labor input index combined with capital service input index, weighted

by labor's and capital's shares of nominal output

Chanees in 1990-92

A discussion of long term trends begins on page 6, following the section on

improvements to the measures.

Private business sector

Multifactor productivity in private business increased 1.9 percent in 1992, following

declines in the 3 previous years (tables 1 and 3). The productivity gain in 1992 resulted from

comparatively small gains of 3.0 percent in output and 1.1 percent in combined inputs of capital

and labor. While output grew faster than in any year since 1988, the gain was less than the

average gain of the previous economic expansion (3.9 percent per year). Excluding 1991, input

growth in 1992 was the slowest since 1982. The 1.0 percent increase in labor input was due to

strong shifts in the composition of labor (1.2 percent) which offset a decline in the hours of all

persons (-0.3 percent). The 1.4 percent advance in capital services was the slowest of the entire

1948-92 period. All forms of capital increased slowly in 1992, but the slow growth rates of

equipment and structures were unprecedented (table 5).

Labor productivity or output per hour advanced 3.3 percent in 1992, its strongest gain

since 1976. Capital productivity (the ratio of output to capital services) increased 1.6 percent.
3

The trend in multifactor productivity in 1991 reflects the impact of the recession which

ended in the frrst quarter of 1991. The 1.1 percent decline in multifactor productivity was the

result of a 1.5 percent decline in output and a 0.4 percent decline in combined capital and labor

inputs. The decline in multifactor productivity was the largest since 1982 an~ the drop in

combined inputs was the fIrSt since 1975. Labor input fell 1.2 percent reflectmg unusually

strong gains in labor composition (1.1 percent) and a sharp drop in hours·of all persons. The 2.3

percent decline in hours was the largest since 1982. Capital services grew 1.5 percent, slower

. than in any year except 1992. As in 1992, the services of equipment and structures made

comparatively small gains. The sharp decline in the growth rate of hours led to the largest

increase in the ratio of capital services to hours at work since 1986.

Unlike multifactor productivity, labor productivity advanced 0.8 percent in 1991. Capital

productivity followed the pattern of multifactor productivity; the 3.0 percent decline was the

steepest decline since 1982.

Private nonfarm business

Multifactor productivity in private nonfarm business grew 1.5 percent in 1992 (tables 2

and 4). Output increased 2.7 percent in output and combined units of capital and labor inputs

rose 1.2 percent. Capital services increased only 1.5 percent, the slowest growth since the series

began in 1948; most components of capital services (equipment, structures, and land) grew at

historically slo~ rates (table 5). Labor input J;><?steda sluggish 1.1 percent gain; hours dropped in

1992, falling 0.3 percent, while labor composItion jumped 1.3 percent

In 1992, labor productivity grew faster than in any year since 1983, advancing 3.0

percent. Capital productivity increased for the fIrSt time since 1988, posting a gain of 1.2

percent. GrOwth in capital services per hour slowed in 1992 to a 1.8 percent rate.

In the recession year of 1991, multifactor productivity dropped 1.0 percent. The decline

reflected a 1.5 percent reduction in output and a 0.5 percent loss in combined capital and labor

inputs. The decline in output was the largest since 1982. The drop in labor input of 1.4 percent

was the sharpest decline SInce 1982. Hours plunged 2.4 percent, also the largest decline since

1982; this loss was partially offset by rapid sl1ifts in the composition of labor, which posted a 1.2

percent gain. The growth in capital services of 1.7 percent was less than half its average growth

rate over the 1948-92 period. Most forms of capital increased slowly while inventories fell 1.0

percent.

Output per hour advanced 1.0 percent in 1991 as the decline in hours was greater than the

decline in output. Capital productivity fell 3.1 percent, the largest decline since 1982.

Improvements to Measures

In 1983, the Bureau of Labor Statistics introduced multifactorproductivity (MFP)

measures dating back to 1948 for private business and private nonfarm business. Since that

time, the MFP measures have been useful in identifying the sources of trends in output per hour

worked. BLS has made improvements to the measures as better data and methods have become

available.
4

The BLS bases its output measures for private business and private nonfarm business on

measures ofIeal product furnished by the Bureau of Economic Analysis (BEA) of the U.S.

Department of Commerce. The BEA has recently developed "alternative" measures for various

aggregate sectors which use superlative index number formulas rather than the traditional

constant dollar formulas. BEA has furnished BLS with superlative index series which the BLS

has now adopted as its preferred measures of output for the MFP work. The measures aggregate

components of real output based on the product side of the national income and product

accounts. As a result, the BLS output measures used in this MFP work have switched from the

income to the product side of the national accounts. BLS has long used superlative index

formulas for aggregating inputs in its MFP work. This issue has become important in recent

years because of rapid and divergent changes in the prices of some goods and services. An

important example is computers. Computer prices have declined dramatically while other prices

have risen. Because of this, computers receive a significantly different weight in aggregates

based on different index number formulas.

BLS has now developed a measure of the effects of changes in the composition of the

work force which, when combined with the hours worked by all persons, becomes the new

measure of labor input. Analogous to the treatment of capital, the index of labor input was

computed from a weighted average of the changes in hours of each type of worker, classified by

education, work experience, and gender. Labor composition change, or the difference between

the growth rates of labor input and hours of all persons, indicates how changes in the education

and experience of the work force have altered the effective amount of labor. The effect of labor

composition change on multifactor productivity is measured as the product of the change in labor

composition and labor's share of total costs. Details on this work can be found in BLS Bulletin

2426, "Labor Composition and U.S. Productivity Growth, 1948-90," which was published in

December 1993. Further improvements to the weighted labor input, especially in the

measurement of work experience, are anticipated. Since labor input now includes labor

composition, multifactor productivity, which is output per combined units of capital and labor,

no longer includes output changes resulting from shifts in labor composition.

For the entire period 1948-92, the net effect of these two improvements was to leave

multifactor productivity unchanged in the private business sector and to raise productivity

growth by an average annual rate of 0.1 percent in private nonfarm business (table B). The

effects of adopting superlative index number formulas for real output were to increase

m?ltifactor productivity 0.2 percent annually in private business and 0.3 percent per year in

pnvate nonfarm business over the entire period. The superlative chained output index grows

faster than constant dollar output early in the period, but more slowly during the 1979-92 period,

especially after 1987. The effect of labor composition growth on multifactor productivity is

similar in magnitude, but its effect is more co~sistent throughout the period. The introduction of

labor composition reduced multifactor productivity 0.2 percent per year between 1948-92,

largely offsetting the revision in the output measure.

The improvements in output and labor indexes do not substantially change the trends in

mu~tifactor productivity growth except for the period 1990-92. Multifactor productivity grows

rapIdly before 1973 and very slowly between 1973-90. For 1990-92, the revisions in both output

and labor substantially reduce productivity growth showing a trend of continued slow growth.

BLS is working on several improvements to its multifactor productivity measures in

manufacturing. This work is, as yet, incomplete. Data on capital inputs, capital costs and hours

in manufacturing are available upon request. '
5

Table B. Effects of alternative output index and weighted labor input on computed annual rates

of growth in multifactor productivity, by major sector, 1948 to 1992

1948- 1948- 1973- 1979- 1990-

Measure 1992 1973 1979 1990 1992

Private business 11

Multifactor productivity 2/ 1.3 2.2 0.5 0.1 0.4

Multifactor productivity 1.3 2.1 -0.1 0.4 1.7

without improvements JI

Effect of improvements 0.0 0.1 0.6 -0.3 -1.3

Effect of iIllProvement to:

Output ~ 0.2 0.3 0.6 0.0 -0.5

Labor Input 'jj -0.2 -0.2 0.0 -0.3 -0.8

Private nonfarm business 1I

Multifactor productivity 2/ 1.1 1.9 0.3 -0.1 0.2

Multifactor productivity

without improvements JI 1.0 1.7 -0.2 0.3 1.5

Effect of Improvements 0.1 0.2 0.5 -0.4 -1.3

Effect of iIllProvement to:

Output ~ 0.3 0.4 0.5 0.0 -0.5

Labor Input 'jj -0.2 -0.2 0.0 -0.3 -0.8

11Excludes government enterprises.

2/ Fisher output index per unit of combined capital and labor.

3/ Constant dollar output (using 1987 price weights in all years)

per unit of combined capital and hours inputs.

4/ Growth rate of the Fisher output index less the growth rate of

constant dollar output.

5/ The product of labor's share of total costs and the growth

rate of hours of all persons less the growth rate of weighted labor input.

Note: The sum of the output and labor input effects may not equal the total effect due to

independent rounding.
6

Lone-term trends

Labor productivity growth (output per hour) differs from multifactor productivity (output

per unit of combined capital and labor inputs) in its treatment of capital and hours. Since labor

productivity measures do not explicitly account for the effects of capital or shifts in the

composition of labor on output growth, changes in capital intensity (the capital-hours ratio) and

labor composition influence labor productivity growth. However, multifactor productivity

(MFP) treats capital as an explicit factor of production and shifts in the composition of labor are

included in the measures of labor input Therefore, changes in capital intensity and labor

composition do not affect measures of MFP. Long-term labor productivity growth can be

viewed as the sum of three components: Multifactor productivity growth, the contribution of

increased capital intensity, and the contribution of shifts in the composition of the work force.

From 1948 to 1992, output per hour grew at an annual rate of 2.5 percent in private

business and 2.1 percent in private nonfarm business (table C). Of the 2.1 percent growth rate in

labor productivity in private nonfarm business, 1.1 percent can be attributed to increases in

multifactor productivity, 0.8 percent to the contribution of capital intensity, and 0.2 percent to .

increases in labor composition; The contribution of capital intensity equals the change in the

capital-hours ratio multiplied by capital's share of total costs. The contribution of labor

composition equals the difference between the growth rate of labor input and the growth rate of

hours multiplied by labor's share of total costs; historically, capital's share has been less than

one-third of total costs.

The widely discussed post-1973 productivity slowdown is apparent from the data in table

C. From 1948 to 1973, multifactor productivity grew at an annual rate of 2.2 percent in private

business and 1.9 percent in private nonfarm business. These rates, combined with the growth

rates in the contributions of capital intensity and labor composition, resulted in labor productivity

growth rates of 3.4 percent and 2.9 percent, respectively, in private business and private nonfarm

business.

During the period 1973 to 1979, gains in multifactor productivity slowed to only 0.5

percent per year in private business. At the same time, the average annual contribution of capital

intensity decreased to 0.7 percent and the contribution of labor composition change was zero.

Labor productivity, therefore, increased only 1.2 percent per year from 1973 to 1979. A similar

slowdown occurred in private nonfarm business during the 1973-79 period.

Between 1979 and 1990, multifactor productivity was almost unchanged in private

business and private nonfarm business. Output per hour nevertheless continued to advance at the

same rates as in the 1973..79 period. The contribution of labor composition increased to 0.3

percent per year in both sectors essentially offsetting further declines in multifactor productivity

growth.

Labor productivity had relatively rapid gains of 2.0 percent per year during 1990-92 in

both sectors. The increase in labor productivity in private business was the result of a 0.4

perce~t per year growth rate in multifactor productivity, a 0.9 percent contribution of capital

mtenslty, and an unsually large 0..8 percent contribution of labor composition. Trends in private

nonfarm business were virtually identical. However, since productivity measures are strongly

cyclical, figures for this short period cannot be interpreted as indicative of new underlying

trends.
7

Table C. Compound average annual rates of growth in output per hour of all persons, the

contributions of capital intensity, labor composition, and multifactor productivity, by major

sector, 1948 to 1992

1948- 1948- 1973- 1979- 1990-

Measure 1992 1973 1979 1990 1992

Private business 11

Output per hour of all persons 2.5 3.4 1.2 1.2 2.0

Contribution of capital intensity 2/ 0.9 1.0 0.7 0.7 0.9

Contribution of labor composition 31 0.2 .0.2 0.0 0.3 0.8

Multifactor productivity ~ 1.3 2.2 0.5 0.1 0.4

.Private nonfarm business l/

Output per hour of all persons 2.1 2.9 1.0 1.0 2.0

Contribution of capital intensity 2/ 0.8 0.9 0.7 0.7 0.9

Contribution of labor composition 31 0.2 0.2 0.0 0.3 0.8

Multifactor productivity ~ 1.1 1.9 0.3 -0.1 0.2

Contribution of R&D to

multifactor productivity 0.2 0.2 0.1 0.2 0.2

11Excludes government enterprises.

21 Growth rate in capital services per hour times capital's share

of current dollar costs.

31 Growth rate of labor input less the growth rate of hours of

all persons times labor's share of current dollar costs.

41 Output per unit of combined labor and capital inputs.

Note: The sum of multifactor productivity and the contributions of capital intensity and labor

composition may not equal labor productivity due to independent rounding.

Source: Tables 1-2.
8

While MFP reflects many influences, it is generally believed that technological change is

one of the primary contributors. For private nonfarm business, BLS has now es~~d th~ direct

effects of rmns' spending on research and development (R&D) on MFP growth wlthm theIr own

industries. Because many people associate R&D spending and the resulting technology

improvements with productivity, BLS has not adjusted MFP to exclude .the ~ffects of R&D.

Instead, the estimated effects are shown separately (table C). The contnbutlon of R&D averaged

0.2 percent per year for the entire 1948-92 period. Its contribution slowed to 0.1 percent per year

during the 1973-79 period, but it has since returned to the 0.2 annual growth rate of the pre-1973

period.

Summary or Methods

The following note describes the major data sources and the procedures used in deriving

BLS multifactor productivity indexes. More detailed information on methods, limitations, and

data sources is provided in BLS Bulletin 2178, "Trends in Multifactor Productivity, 1948-81."

The multifactor productivity indexes are derived by dividing an output index by an index

of labor input and capital services. The output indexes are computed as chained superlative

indexes (Fisher Ideal indexes) of components of real output For the years 1959-92, the output

indexes are supplied by the Bureau of Economic Analysis (BEA) of the U.S. Department of

Commerce. BLS adjusts these to eliminate the output of government enterprises. For the years

1948-58, BLS calculated output indexes by applying the Fisher index formula to data on

categories of final expenditures in published tables from the National Income and Product

Accounts (NIPA) produced by BEA. BLS linked these two indexes at 1959. Since 1983, BLS

has used chained superlative indexes (Tornqvist indexes) to aggregate inputs. BLS has used

several data sets to verify that Tornqvist and Fisher indexes yield results that are empirically

quite similar.

The capital input series measures the services derived from the stock of physical assets.

The assets included are fixed business equipment, structures, inventories, and land. Structures

include nonresidential structures and residential capital which is rented out by profit-making

firms or persons. Financial assets are excluded as are owner-occupied residential structures.

The aggregate capital measures are obtained by (Tornqvist) weighting the capital stocks for each

asset type within each of 53 industries using the rental prices for each asset type. Each rental

price reflects the nominal rate of return to all assets within the industry and rates of economic

depreciation and revaluation for the specific asset; rental prices are adjusted for the effects of

taxes. Data on investments in physical assets and gross product originating by industry used in

measuring the rental prices are obtained from BEA.

Labor input is obtained by (Tornqvist) weighting the hours worked by all persons,

classified by education, work experience, and gender, by their shares of labor compensation.

Houts paid of employees are obtained from the Current Employment Statistics program. The

hours at work of proprietors, unpaid family workers, and farm employees are derived from the

Current Population Survey. The hours of employees are converted to an at-work basis by using

the Hours At Work survey. The growth rate of labor composition is defined as the difference

between the growth rate of weighted labor input and the growth rate of the hours of all persons.

Additional information concerning data sources and methods of measuring labor composition

can be found in BLS Bulletin 2426, "Labor Composition and U.S. Productivity Growth, 1948-

90".
9

The labor and capital components of the input indexes are combined with (Tornqvist)

weights which represent each component's share of total costs. Total costs are defined as the

value of output (gross product originating) less a portion of indirect business taxes. Most .

indirect taxes such as excise taxes are excluded from costs; however, property and motor vehIcle

taxes remain in total costs. The index uses changing weights where the share in each year is

averaged with the preceding year's share.

Data are presented for the private business and private nonfarm business sectors. The

private business sector, which accounts for about 80 percent of gross domestic product, includes

all of gross domestic product except the output of general government, government enterprises,

non-profit institutions, the rental value of owner-occupied real estate, and the output of paid

employees of private households. The private nonfarm business sector also excludes farms, but

includes agricultural services.

These multifactor productivity measures describe the relationship between output in real

terms and the labor time and capital services involved in its production. They do not measure

the specific contributions of labor, capital, or any other factor of production. Rather, they reflect

the joint effects of many factors, including new technology, economies of scale, managerial skill,

and change in the organization of production.

Notes:

Data on output, hours, and capital investment have been revised to conform with the

1987 Standard Industrial Classification system.

BLS uses current dollar Gross Product Originating (GPO) data to estimate capital rental

prices. Revised current dollar GPO data by industry, and its components by industry, are now

available from BEA for the period 1959-91. For years prior to 1959, unrevised current dollar

GPO data were used. GPO data for 1992 are not yet available. In the absence of 1992 GPO

data, the BLS extrapolated capital asset cost shares so that relative rental prices were unchanged

between 1991 and 1992.

Measures of hours of all persons at the major sector level have been revised to reflect the

BLS June 1994 benchmarking of the Current Employment Statistics data to the March 1993

unemployment insurance data ..

Information in this release will be made available to sensory-impaired individuals upon

request. Voice phone: 202-606-STAT; roD phone: 202-606-5897; roD message referral phone

number: 1-800-326-2577.
Table 1. Private business sector: Productivity and related measures, 1948-92 [1]

Indexes 1987-100

10

-

Productivity 1apula

Yeu Ou1pJt per 0u1put per Multif_ OulpUt Labor Capital CcmbiDed UDila Capital per

hour m all l1IIitof pmducIivity input ICrYicca mlabor and hour of

panaIII capital (2) (3) (4) (5) capital inpul8 (6) all panona

1948 36.3 116.9 56.1 25.6 63.4 21.9 45.6 31.1

1949 37.6 114.1 56.8 25.5 61.3 22A 45.0 32.9

1950 41.0 120.0 60.9 28.1 62.4 23.4 46.2 34.1

1951 42.4 121.0 62.3 29.9 64.3 24.7 48.0 35.0

1952 43.3 118.8 62.8 30.6 64.4 25.7 48.6 36.5

1953 44.9 120.0 64.3 32.0 65.5 26.6 49.7 37.4

1954 46.0 116.1 64.3 31.6 63.7 272 49.1 39.6

1955 48.1 12tA 672 34.3 66.1 282 51.0 39.7

1956 48.3 118.9 66.9 34.9 672 29.4 522 40.6

1957 49.9 1172 67.9 35A 66.4 302 52.2 42.5

1958 51.3 112.5 682 34.7 63.5 30.9 50.9 45.6

1959 52.9 117.7 70.6 372 66.0 31.6 52.7 45.0

1960 53.8 116.3 70.9 37.8 66.3 32.5 53.4 46.3

1961 55.9 116.0 72.4 38.6 65.5 33.3 53.3 48.2

1962 58.6 119.8 75.1 41.1 672 34.3 54.7 48.9

1963 61.0 121.0 77.3 43.0 67.7 35.5 55.6 50.4

1964 63.9 124.1 80.5 45.8 68.8 36.9 56.9 51.5

1965 66.3 126.4 83.0 48.9 70.9 38.7 59.0 52.4

1966 69.0 127.1 85.5 52.2 72.5 41.1 61.1 54.3

1967 70.7 122.6 85.8 532 72.3 43.4 62.0 57.7

1968 73.1 122.9 88.0 55.8 73.2 45.4 63.4 59.5

1969 73.6 120.8 87.7 57.5 752 47.6 65.6 61.0

1970 74.9 115.4 87.4 57A 74.1 49.7 65.7 64.9

1971 78.1 115.4 902 59.6 73.5 51.6 66.1 67.7

1972 80.6 1182 92.8 63.5 75.9 53.7 68.4 68.2

1973 83.3 120.3 95.6 68.0 78.5 56.5 71.1 69.2

1974 82.0 112.7 92.3 66.9 79.0 59.4 72.5 72.7

1975 84.5 107.3 92.8 66.0 75.7 61.5 71.1 78.7

1976 87.6 1112 96.4 70.3 77.6 63.3 73.0 78.8 1977 89.3 114.1 98.5 74.5 80.7 65.4 75.7 78.3 1978 90.0 115.1 992 78.8 84.7 68.4 79.4 78.1 1979 89.5 113.1 98.5 80.9 872 71.5 82.1 79.1

1980 892 105.9 962 79.9 86.6 75.4 83.1 84.2 1981 91.1 103.5 96.4 82.1 87.9 79.4 852 88.0 1982 90.5 96.4 93.3 79.6 86.6 82.6 85.3 93.9 1983 932 98.0 95A 83.3 88A 85.0 87.3 95.0 1984 95.7 102.3 98.4 90A 93.6 88.4 91.9 93.6

1985 97.1 1012 98.9 93.7 95.7 92.5 94.7 95.9 1986 99.6 99.8 99.9 96.7 96.8 96.9 96.8 99.8 1987 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1988 101.0 IOtA 100.6 104.3 104.1 102.8 103.7 99.6 1989 101.1 101.4 100.3 107.0 1072 105.6 106.7 99.7

1990 101.9 99.8 100.0 107.9 107.7 108.1 107.8 102.1 1991 102.8 96.9 98.9 106.3 106.4 109.8 107.5 106.1 1992 106.1 98.4 100.8 109.5 107.5 111.3 108.6 107.9

See foolnotes following table 4. Source: Bureau of Labor Statistics
Table 2. Private nonfann business sector: Productivity and related measures, 1948-92 [1]

Indexes 1987-100

11

-

Productivity IDputa

Year Oulplt per 0uIpul per Mu1tif_ Oulplt Labor CapiW CcmbiDed uniIs CapiIal per

hour m all lJIIilof productivity input IIClrVic:a m labor IIId hour of

pc:noaa c:apiW [2] (3] [4] [S] capiW inputs [6] all pc:noaa

1948 41.9 123.3 61.9 24.7 53.7 20.1 40.0 34.0

1949 43.7 120.7 63.2 24.7 51.6 20.5 39.1 36.2

1950 46.7 126.8 66.9 27.2 53.4 21.5 40.7 36.8

1951 48.1 129.2 68.7 29.3 55.9 22.7 42.7 37.2

1952 48.8 126.7 68.6 30.0 56.7 23.7 43.7 38.5

1953 49.7 127.7 69.3 31.4 58.6 24.6 45.2 39.0

1954 50.8 123.1 69.3 30.9 56.9 25.1 44.6 41.3

1955 53.2 128.9 724 33.7 59.3 26.1 46.5 41.3

1956 53.0 126.2 71.7 34.4 60.9 27.2 47.9 42.0

1957 54.3 124.5 72.3 35.0 60.8 28.1 48.4 43.7

1958 55.7 119.3 72.5 34.3 58.2 28.7 47.2 46.7

1959 57.4 125.2 75.1 36.9 60.8 29.4 49.1 45.8

1960 57.9 123.0 75.2 37.4 61.1 30.4 49.7 47.1

1961 59.9 122.6 76.4 38.2 60.9 31.1 50.0 48.8

1962 62.7 126.8 79.1 40.8 62.9 32.2 51.6 49.5

1963 64.9 128.0 81.2 42.7 63.6 33.4 52.6 50.7

1964 67.8 131.5 84.4 45.6 65.1 34.7 54.1 51.6

1965 69.9 133.6 86.6 48.8 67.4 36.5 56.3 52.3

1966 72.3 134.4 89.0 52.2 69.6 38.9 58.7 53.8

1967 73.7 129.0 89.0 53.2 69.5 41.2 59.7 57.1

1968 76.2 129.5 91.4 56.0 70.5 43.2 61.2 58.9

1969 76.3 126.9 90.7 57.7 72.9 45.4 63.6 60.1

1970 77.3 120.9 90.0 57.4 71.9 47.5 63.8 64.0

1971 80.5 120.5 92.7 59.6 71.5 49.4 64.3 66.8 1972 83.1 123.4 95.6 63.6 73.9 51.5 66.6 67.3

1973 85.8 125.6 98.4 68.3 76.7 54.4 69.4 68.3 1974 84.4 117.1 94.9 67.2 77.3 57.4 70.9 72.1

1975 86.4 110.5 94.9 65.9 73.9 59.6 69.4 78.2 1976 89.5 114.6 98.5 70.4 76.1 61.5 71.5 78.1 1977 91.0 117.2 100.3 74.6 79.3 63.7 74.4 77.7 1978 91.9 118.5 101.3 79.1 83.4 66.8 78.1 77.5 1979 91.1 115.6 100.1 81.2 86.0 70.2 81.1 78.7

1980 90.8 108.4 97.9 80.3 85.6 74.1 82.0 83.8 1981 92.0 104.9 97.4 82.0 86.9 78.1 84.2 87.7 1982 91.4 97.4 94.1 79.4 85.6 81.5 84.4 93.8 1983 94.5 99.6 96.8 83.6 87.5 84.0 86.5 94.9 1984 96.6 103.4 99.3 90.6 92.9 87.6 91.2 93.4

1985 97.3 101.8 99.2 93.6 95.4 91.9 94.3 95.6 1986 99.8 100.1 100.1 96.7 96.6 96.6 96.6 99.8 1987 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1988 100.9 101.3 100.5 104.5 104.3 103.1 103.9 99.6 1989 100.8 100.9 100.0 107.1 107.5 106.1 107.1 99.9

1990 101.4 99.1 99.4 107.8 108.2 108.7 108.4 102.3 1991 102.4 96.0 98.4 106.2 106.7 110.6 107.9 106.6 1992 105.4 97.2 99.9 109.1 107.9 112.3 109.2 108.5

See foomotes following table 4. Source: Bureau of Labor Statistics
Table 3. Private business sector: Productivity and related measures, 1949-92 [1]

Percent Change

12

Productivity InpulI

Year OulpUt per Output per Multifactar OulpUt lAbor Capital Combined UDits Capital per

hour cI all unit of pmduc:tivity input Imvices of 1abor and hour of

penoaa capiIal (2J (3J [4J [SJ capital inputs [6J all penoaa

1949 3.4 -2.4 13 -0.2 -33 23 -15 6.0

1950 9.0 5.2 7.2 10.1 1.7 4.6 2.7 3.6

1951 35 0.8 2.4 6.4 3.1 55 3.9 2.6

1952 2.3 -1.8 0.8 2.2 0.1 4.0 1.4 4.2

1953 3.6 1.0 23 4.6 1.7 35 2.2 2.6

1954 23 -33 0.1 -1.2 -2.7 2.1 -13 5.8

1955 4.7 45 45 85 3.8 3.8 3.8 0.2

1956 03 -2.1 -05 1.8 1.6 4.0 2.4 25

1957 3.2 -1.4 15 1.6 -1.2 3.0 0.1 4.7

1958 2.9 -4.0 05 -2.0 -4.4 2.1 -25 7.2

1959 3.1 4.6 35 7.1 4.0 2.4 35 -1.4

1960 1.7 -1.2 0.4 1.7 0.5 3.0 13 2.9

1961 3.8 -0.2 2.2 2.0 -1.2 23 -0.2 4.1

1962 4.9 3.2 3.7 65 25 3.2 2.7 1.6

1963 4.1 1.1 2.9 4.6 0.7 35 1.6 3.0

1964 4.8 25 4.1 65 1.6 3.9 23 23

1965 3.6 1.8 3.1 6.9 3.1 5.0 3.7 1.8

1966 4.2 0.6 3.0 6.6 23 6.0 35 3.6 1967 2.4 -3.6 03 2.0 -0.2 5.7 1.6 6.2 1968 35 03 2.6 4.9 1.2 4.7 23 3.2 1969 0.7 -1.7 -03 3.1 2.7 4.9 3.4 2.4

1970 1.7 -4.4 -0.4 -0.2 -15 4.4 0.2 6.4 1971 43 0.0 3.2 3.8 -0.8 3.8 0.5 43 1972 3.2 2.4 3.0 6.6 33 4.0 35 0.8 1973 33 1.8 3.0 7.0 3.4 5.1 3.9 15 1974 -1.6 -6.4 -35 -1.6 0.7 5.1 2.0 5.1

1975 3.1 -4.8 0.6 -13 -4.2 3.6 -2.0 8.2 1976 3.6 3.6 3.8 6.6 2.6 2.9 2.7 0.0 1977 2.0 2.6 2.2 6.0 3.9 33 3.7 -0.6 1978 0.7 1.0 0.7 5.7 5.0 4.7 4.9 -0.2 1979 -0.5 -1.8 -0.7 2.7 2.9 45 3.4 13

1980 -03 -6.4 -23 -1.2 -0.6 55 1.2 65 1981 2.0 -23 0.2 2.8 15 5.2 2.6 4.5 1982 -0.6 -6.9 -3.2 -3.1 -15 4.1 0.1 6.7 1983 2.9 1.7 2.2 4.7 2.1 2.9 2.4 1.2 1984 2.7 43 3.2 8.6 5.8 4.0 5.2 -15

1985 1.4 -1.0 05 3.6 23 4.6 3.1 25 1986 2.6 -1.4 1.0 3.2 1.1 4.7 2.2 4.1 1987 0.4 0.2 0.1 3.4 33 3.2 33 0.2 1988 1.0 1.4 0.6 43 4.1 2.8 3.7 -0.4 1989 0.1 0.0 -0.2 2.6 2.9 2.6 2.8 0.1

1990 0.8 -15 -03 0.8 05 . 2.4 1.1 2.4 1991 0.8 -3.0 -1.1 -15 -1.2 1.5 -0.4 3.9 1992 33 1.6 1.9 3.0 1.0 1.4 1.1 1.7

See fOOblotesfollowing table 4. Source: Bureau of Labor Statistics
Table 4. Private nonfarm business sector: Productivity and related measures, 1949-92 [1]

Percent Change

13

Productivity IDpula

Year Output per Output per Mu1Iifador Output Labar Capilal Combined uniIa Capilal per

hour cI an uail of pmductivity input ..w- allabor mcI hour of

~ capi1al [2] [3] [4] [5] capilal illpula [6] an~

1949 4.2 -2.1 2.0 0.0 4.0 2.1 -2.1 6.5

1950 6.8 5.1 5.9 10.0 3.5 4.7 3.9 1.7

1951 3.1 1.9 2.7 7.8 4.6 5.8 5.0 1.2

1952 1.4 -1.9 ..0.2 2.2 1.6 4.2 2.4 3.4

1953 2.0 0.8 1.1 4.5 33 3.7 3.4 1.2

1954 2.2 -3.5 ..0.1 -lA -2.9 2.2 -1.4 6.0

1955 4.7 4.7 4.6 8.9 4.2 4.0 4.1 0.1

1956 ..0,4 -2.1 -1.0 2.1 2.7 43 3.2 1.7

1957 2.5 -1.4 0.9 1.8 ..0.1 3.2 0.9 3.9

1958 2,4 4.2 03 -2.1 43 2.2 -2.4 6.9

1959 3.1 5.0 3.6 7.6 4.5 2.5 3.9 -1.8

1960 0.9 -1.7 0.1 1,4 0.5 3.2 13 2.7

1961 3.4 ..03 1.6 2.1 ..03 2.4 0.5 3.8

1962 4.7 3.4 3.6 7.0 3.2 3.4 33 1.2

1963 3.5 0.9 2.6 4.6 1.2 3.6 1.9 2.6

1964 4.4 2.7 3.9 6.9 23 4.1 2.8 1.7

1965 3.1 1.6 2.7 6.9 3.6 5.2 4.1 1.4

1966 3.4 0.6 2.7 7.0 33 63 4.2 2.8 1967 1.9 4.0 0.1 1.8 ..0.2 6.0 1.7 6.2

1968 3.5 0.4 2.7 53 1.4 4.9 2.5 3.1 1969 0.1 -2.0 ..0.8 3.0 3.4 5.2 3.9 2.2

1970 13 4.7 ..0.7 ..0.4 -13 4.6 0.4 6.4 1971 4.0 ..03 3.0 3.7 ..0.6 4.0 0.7 43 1912 33 2.4 3.1 6.8 33 43 3.6 0.8 1973 3.2 1.7 2.9 7.4 3.8 5.5 43 1.5 1974 -1.6 -6.7 -3.5 -1.6 0.7 5.5 2.0 5.4

1915 2.4 -5.7 0.0 -2.0 4.4 3.8 -2.1 8.5 1916 3.5 3.7 3.8 6.9 3.0 3.1 3.0 ..0.2 1917 1.7 23 1.8 6.0 43 3.6 4.1 ..0.5 1918 0.9 1.2 1.0 6.0 5.1 4.8 5.0 ..0.2 1919 ..0.9 -2.4 -1.2 2.6 3.2 5.2 3.8 1.6

1980 ..03 -63 -23 -1.1 ..0.5 5.5 1.2 6.4 1981 1.4 -3.2 ..0.5 2.2 1.5 5.5 2.7 4.7 1982 ..0.7 -7.2 -3.4 -3.2 -1.4 43 0.2 7.0 1983 3.5 2.2 2.8 5.4 2.2 3.1 2.5 1.2 1984 2.2 3.8 2.6 83 6.1 43 5.5 -1.6

1985 0.8 -1.6 ..0.1 33 2.7 4.9 3.4 2.4 1986 2.6 -1.7 0.9 33 13 5.1 2.4 4.4 1987 0.2 ..0.1 ..0.1 3.4 3.5 3.5 3.5 0.2 1988 0.9 13 0.5 4.5 43 3.1 3.9 ..0.4 1989 ..0.1 ..0.4 ..0.5 2.5 3.1 2.9 3.0 03

1990 0.5 -1.8 ..0.6 0.7 0.7 2.5 1.2 2.4 1991 1.0 -3.1 -1.0 -1.5 -1.4 1.7 ..0.5 4.2 1992 3.0 1.2 1.5 2.7 1.1 1.5 1.2 1.8

See footnotes following table 4. Source: Bureau of Labor Statistics
14

Foomotes, Tables 1-4

Source: Output data are from the Bureau of Economic Analysis (BEA), U.S. Department of

Commerce, and modified by the Bureau of Labor Statistics (BLS), U.S. Department of Labor.

Compensation and hours data are from the BLS. Capital measures are based on data supplied by

BEA and the'U.S. Department of Agriculture.

(1) The private business sector includes all of gross domestic product except the output of

general government, government enterprises, non-profit institutions, the rental value

of owner-occupied real estate and the output of paid employees of private households.

The private nonfarm business sector also excludes farms but includes agricultural services.

(2) Output per unit of combined labor and capital inputs.

(3) Gross domestic product originating in the sector, superlative chained index.

(4) Index of the hours at work of all persons including employees, proprietors, and unpaid

family workers classified by education, work experience and gender. Index is computed

by combining changes in the hours of each education, experience and gender group by its

share of labor compensation.

(5) A measure of the flow of capital services used in the sector.

(6) Labor input combined with capital input, using labor's and capital's shares

of costs as weights.
Table 5.Real capital inputs by asset types. 1948-92

Average annual growth rates (percent)

Private business

15

Rental

All Equip- Residential

Period Assets ment Structures Capital Inventories Land

1948-92 3.7 5.2 3.3 2.6 3.3 2.5

1948-73 3.9 5.5 3.5 2.5 4.0 2.3

1973-79 4.0 6.2 3.0 2.7 3.6 2.0

1979-90 3.8 4.6 3.4 3.1 2.1 3.6

1990-92 1.5 2.0 1.5 0.7 0.2 1.2

1991 1.5 2.0 1.8 0.7 -0.9 1.4

1992 1.4 1.9 1.2 0.7 1.2 1.0

Private nonfann bUsiness

Rental

All Equip- Residential

Period Assets ment Structures Capital Inventories Land

1948-92 4.0 5.4 3.4 2.6 3.4 3.4

1948-73 4.1 5.6 3.5 2.5 4.2 3.2

1973-79 4.3 6.3 3.0 2.7 3.8 3.8

1979-90 4.1 5.0 3.6 3.1 2.2 4.0

1990-92 1.6 2.2 1.6 0.6 0.1 1.5

1991 1.7 2.2 1.9 0.6 -1.0 1.7

1992 1.5 2.1 1.3 0.7 1.2 1.2

Source: Bureau of Labor Statistics
Table 6. Private business sector: Real capital inputs by asset types, 1948-92

Index 1987 = 100

16

Rental

All Equip- Residential

Period Assets ment Structures Capital Inventories Land

1948 21.9 12.2 26.2 35.1 26.3 36.2

1949 22.4 13.4 26.6 35.5 25.6 36.8

1950 23.4 14.6 27.0 35.9 27.8 37.4

1951 24.7 15.6 27.6 36.3 31.6 37.9

1952 25.7 17.0 28.3 36.6 32.8 38.6

1953 26.6 18.2 29.2 36.9 33.4 39.4

1954 27.2 19.1 30.1 37.3 32.6 40.3

1955 28.2 20.1 31.1 37.7 34.7 41.0

1956 29.4 21.1 32A 38.1 36.4 42.0

1957 30.2 22.2 33.8 38.5 36.4 43.1

1958 30.9 22.8 35.0 39.0 36.0 44.1

1959 31.6 23.2 36.1 39.8 37.0 45.1

1960 32.5 23.8 37.3 40.6 38.7 45.8

1961 33.3 24.4 38.5 41.5 38.6 46.7

1962 34.3 25.1 39.8 427 40.6 47.7

1963 35.5 26.0 41.1 44.3 42.3 48.8

1964 36.9 27.2 42.6 46.0 44.1 50.2

1965 38.7 28.8 44A 47.8 47.0 51.7

1966 41.1 31.0 46.7 49.4 51.0 53.5

1967 43A 33.3 48.9 50.8 55.3 55.2

1968 45.4 35.3 51.1 524 58.1 56.7

1969 47.6 37.5 53.3 54.6 60.9 58.2

1970 49.7 39.7 55.5 56.8 62.7 59.6

1971 51.6 41.6 57.5 59.0 64.2 60.8

1972 53.7 43.9 59.3 61.8 66.1 62.1

1973 56.5 46.9 61.4 64.7 69.7 63.9

1974 59.4 50.5 63A 66.7 73.6 65.7

1975 61.5 53A 65.3 67.8 74.2 67A

1976 63.3 55.8 66.9 68.9 75.6 68.7

1977 65.4 58.7 68.6 70.2 78.1 70.1 1978 68.4 63.1 70.7 721 82.6 71.5

1979 71.5 67.3 73A 75.9 86.0 71.8

1980 75.4 71A 76.7 81.2 86.0 77.1 1981 79.4 75.3 80.7 85.9 87.1 81.6 1982 82.6 78.5 84.8 88.6 87.1 84.8 1983 85.0 81.2 88.0 90.0 86.0 87.7 1984 88.4 84.8 91.0 921 91.9 91.2

1985 92.5 90.1 94.4 94.9 96.1 94.4 1986 96.9 95.5 97.5 97.6 99.3 96.9 1987 100.0 100.0 100.0 100.0 100.0 100.0 1988 102.8 103.9 102.1 1025 103.1 101.7 1989 105.6 107.6 104.3 104.6 106.2 103.1

1990 108.1 110.8 - 106.5 106.0 107.8 105.5 1991 109.8 113.0 108.5 106.6 106.9 107.0 1992 111.3 115.2 109.7 107A 108.2 108.0

Source: Bureau of Labor Statistics
Table 7. Private nonfarm business sector: Real capital inputs by asset types, 1948-92

Index 1987 = 100

17

Rental

All Equip- Residential

Period Assets ment Structures Capital Inventories Land

1948 20.1 11.6 25.9 34.8 2A.6 25.1

1949 20.5 12.6 263 35.2 23.8 25.6

1950 21.5 13.6 26.7 35.6 26.1 26.2

1951 12.7 14.5 27.2 36.1 30.0 26.7

1952 23.7 15.9 28.0 36.4 31.1 27.4

1953 2A.6 17.1 28.8 36.7 31.7 28.1

1954 25.1 18.0 29.7 37.0' 30.9 29.0

1955 26.1 18.9 30.8 37.4 33.0 29.7

1956 '1:1.2 20.0 32.1 37.8 34.8 30.5

1957 28.1 21.0 33.5 38.2 34.8 31.6

1958 28.7 21.6 34.7 38.8 343 32.5

1959 29A 22.0 35.7 39.5 353 33A

1960 30A 22.7 36.9 40.4 37.1 34.4

1961 31.1 233 38.2 41.3 36.9 353

1962 32.2 2A.0 39.4 42.5 38.8 363

1963 33A 2A.9 40.7 44.0 40.6 37.5

1964 34.7 26.0 42.1 45.8 42.4 38.8

1965 36.5 27.6 44.0 47.6 45.2 40.4

1966 38.9 29.8 46.2 49.2 493 423

1967 41.2 32.0 48.4 50.6 53.6 44.1

1968 43.2 33.9 50.6 52.2 56.4 45.8

1969 45.4 36.1 52.8 54.4 59.2 47.6

1970 47.5 383 55.0 56.5 61.0 49.2

1971 49.4 40.2 57.0 58.8 62.6 50.8

1972 51.5 423 58.9 61.6 643 52.4

1973 54.4 453 60.9 64.5 68.2 55.1

1974 57.4 48.8 63.0 66.5 72.4 57.6

1975 59.6 51.7 64.8 67.7 73.1 60.0 1976 61.5 54.0 66.4 68.7 74.6 62.0

1977 63.7 56.9 68.0 70.1 78.0 64.1 1978 66.8 613 70.1 72.0 82.0 66.0 1979 70.2 65.5 72.8 75.8 85.5 68.7

1980 74.1 69.6 76.1 81.2 85.5 73A 1981 78.1 73.6 80.2 85.8 86.5 78.7 1982 81.5 76.9 84.4 88.5 86.4 82.4 1983 84.0 79.8 87.7 90.0 853 85.6 1984 87.6 83.6 90.7 92.0 91.5 89.6

1985 91.9 893 94.2 94.9 95.8 93.1 1986 96.6 95.1 97.4 97.6 99.0 96.6 1987 100.0 100.0 100.0 100.0 100.0 100.0 1988 103.1 1043 102.2 102.5 103.5 101.8 1989 106.1 1083 104.5 104.6 106.9 103.4

1990 108.7 111.8 107.0 106.1 108.6 105.8 1991 110.6 1143 109.0 106.7 107.5 107.6 1992 1123 116.7 110.4 J07.4 108.8 108.9

Source: Bureau of Labor Statistics
18

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