Q3 2010 Productivity & Costs was released today. Labor productivity decreased +1.9%. Output increased +3.0% and hours worked increased 1.1%. For the year, Productivity increased +2.5%, output +4.1% and hours +1.6%.

United labor costs dropped -0.1% and are down -1.9% for the year. Frankly this implies workers are being squeezed. Real wages only increased 0.7% for Q3 2010.

Labor Productivity for Q1 2010 was significantly revised from the original report. Labor Productivity rose 2.8% in Q1 2010 versus the original 3.6% reported.

Nonfarm business sector labor productivity increased at a 2.8 percent annual rate during the first quarter of 2010, the U.S. Bureau of Labor Statistics reported today, with output rising 4.0 percent and hours rising 1.1 percent.

Hourly compensation increased 1.6% for the last four quarters.

For the year labor productivity increased 6.1% and hours worked fell 3.0% and output increased 3.0. They haven't seen numbers this high since 2002.

What caused the revision? People worked more hours than originally thought.

The basic equation for labor productivity is

Where Q is the total output of industry and Labor is measured in hours only. Both values are normalized to a base year.

Hourly compensation was also revised from 2.3% to 1.5% in gains. But this number is a bit misleading because in terms of real compensation, the people gained zero. In other words, people worked much more, yet hour per hour, gained nothing.

Unit labor costs in nonfarm businesses fell 1.3 percent in the first quarter of 2010, as the 2.8 percent increase in productivity outpaced a 1.5 percent gain in hourly compensation.