2010-27727. Comment Request; Review of Productivity Statistics

ACTION:

Notice of solicitation of comments.

SUMMARY:

The Department of Labor through the Bureau of Labor Statistics (BLS) is responsible for publishing measures of labor productivity and multifactor productivity for major sectors and industries of the United States economy. BLS periodically conducts formal reviews of its programs in order to assess their content, methodology, efficiency, and effectiveness. To enhance the quality and relevance of productivity data, BLS is soliciting comments on the scope and coverage of these data, on the methods used in constructing them, and on areas of interest for future program development.

DATES:

Written comments must be submitted to the office listed in the Addresses section of this notice on or before December 3, 2010.

ADDRESSES:

Send comments to Michael J. Harper, Office of Productivity and Technology, Bureau of Labor Statistics, Room 2150, 2 Massachusetts Avenue, NE., Washington, DC 20212 or by e-mail to: [e-mail].

FOR FURTHER INFORMATION CONTACT:

Michael J. Harper, Office of Productivity and Technology, Bureau of Labor Statistics, telephone number 202-691-5600, or by e-mail at [e-mail].

SUPPLEMENTARY INFORMATION:

I. Background

The Department of Labor through the Bureau of Labor Statistics (BLS) is responsible for publishing measures of labor productivity and multifactor productivity for major sectors and industries of the United States economy. The Office of Productivity and Technology (OPT) differs from other BLS programs in that it does not conduct surveys to collect data. Instead, it produces productivity estimates from published and unpublished data collected and compiled by other BLS programs, the Bureau of Economic Analysis, the Census Bureau, other Federal statistical agencies, and the Board of Governors of the Federal Reserve System.

Labor productivity is defined as output per hour worked. BLS reports quarterly on productivity growth and its components (output and hours) and on other measures, such as unit labor costs and hourly compensation. These measures are produced for the business, nonfarm business, and manufacturing sectors, and for nonfinancial corporations. The quarterly measures are designated by the Office of Management and Budget as a Principal Federal Economic Indicator. BLS also produces annual measures of labor productivity for about 400 detailed industries. BLS labor productivity data are available at the following Internet address: http://www.bls.gov/​lpc/​.

BLS also produces estimates of multifactor productivity (MFP), which is defined as output per unit of combined inputs. The combined inputs include hours and capital services; in some cases, additional inputs include labor composition and intermediate goods and services. BLS reports MFP growth, along with its components (output, capital, hours, etc.) and other measures such as capital-labor ratios, capital user costs, and labor composition indexes. These measures are designed to analyze the effects of technological change on economic growth, the substitutability of inputs, and changes in the composition of inputs and outputs. BLS produces annual measures of multifactor productivity for private business, private nonfarm business, and manufacturing sectors and for many detailed industries. BLS MFP data are available at the following Internet address: http://www.bls.gov/​mfp/​.

II. Productivity Coverage and Methods

The quarterly nonfarm business labor productivity measures are constructed within the conceptual framework of the U.S. National Income and Product Accounts (NIPAs) published by the Bureau of Economic Analysis (BEA). The output data are based on a value-added concept and come from product-side estimates of Gross Domestic Product.

The primary source of hours data is the BLS Current Employment Statistics (CES) program, which collects hours paid for nonsupervisory workers. These data are adjusted using data from the Current Population Survey, the National Compensation Survey, and other sources to account for differences between the desired concept of hours (hours worked for all employed persons) and the CES concept (hours paid for production and nonsupervisory employees).

For detailed industries, annual output measures represent the total value of goods and services produced, and are based primarily on data from the U.S. Census Bureau. These measures use a sectoral output concept, which differs from real gross output in that it excludes output that is shipped to other establishments in the same industry. As with the nonfarm business sector productivity, industry hours are constructed primarily from payroll data from the BLS CES survey, supplemented with data from the CPS and other Federal data sources.

Multifactor productivity is estimated in a conceptual framework based on the economic theory of the firm. This framework guides the construction and interpretation of the measures. For the private business and nonfarm business sectors, value added output is compared to inputs of labor and capital. For detailed industries, sectoral output is compared to capital and labor inputs as well as intermediate inputs of energy, non-energy materials and business services provided by establishments outside of each industry or sector.

III. Desired Focus of Comments

Comments and recommendations are requested from the public on the following aspects of the BLS productivity measurement program:

• The scope and amount of detail covered by and published in the productivity datasets.
• The concepts and frameworks used in measuring outputs, inputs, and productivity.
• The sources of data used in productivity measurement.
• Areas of research that the BLS productivity program should emphasize.

In your recommendations to the productivity program, it would be particularly helpful if you could explain how the changes would make the data more accurate or more useful.

Signed at Washington, DC, this 28th day of October 2010.

Kimberley Hill,

Chief, Division of Management Systems, Bureau of Labor Statistics.