Wednesday, July 9, 2014

2007 To 2013 Multifactor Productivity Annual Growth Rate Below Longer Term Average: 0.6 Percent Versus 0.9 Percent Annual Growth

From The Bureau of Labor Statistics, Economic News Release, "Multifactor Productivity Trends News Release:"
Multifactor productivity measures the change in output per unit of combined capital and labor input. It is designed to measure the joint influences of technological change, efficiency improvements, returns to scale, reallocation of resources, and other factors on economic growth, allowing for the effects of capital and labor. Multifactor productivity, therefore, differs from labor productivity (output per hour worked) measures that are published quarterly by BLS. Multifactor productivity includes information on capital services, hours worked, and shifts in the composition of labor. Estimates of capital services and labor composition are not included in the quarterly labor productivity measures. Additionally, much of the source data needed to construct multifactor productivity measures are not available quarterly.
Historical trends in the private nonfarm business sector

Multifactor productivity in the private nonfarm business sector grew 0.9 percent annually from 1987 to 2013. (See table A.) For the 2007-2013 period, multifactor productivity grew 0.6 percent on average as combined inputs increased 0.4 percent and output increased 1.0 percent. The increase in combined inputs reflected a decrease in labor input of 0.1 percent combined with a 1.4-percent increase in capital services. In contrast, the 0.9-percent average annual percent change in multifactor productivity from 1987 to 2013 was a result of output growing 2.9 percent and combined inputs increasing 2.0 percent. (See table 1.)

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