UNIT LABOUR COSTS (ULC) FOR UNITED STATES - SOURCE DATA

Total

D

C_E

F

G_I

J_K

Annual ULC

Compensation of Employees

SNA 1970

SNA 1970

SNA 1970

SNA 1970

SNA 1970

SNA 1970

SNA 1970

Value Added

SNA 1970

SNA 1998 (1987) (1970¹)

SNA 1970

SNA 1970

SNA 1970

SNA 1970

Self-employed ratio:

Persons - Employed

SNA 1970

SNA 2000 (1970)

SNA 2000 (1970)

SNA 2000 (1970)

SNA 2000 (1970)

SNA 2000 (1970)

SNA 2000 (1970)

SNA 2000 (1970)

Persons - Employees

SNA 1970

SNA 2000 (1970)

SNA 2000 (1970)

SNA 2000 (1970)

SNA 2000 (1970)

SNA 2000 (1970)

SNA 2000 (1970)

SNA 2000 (1970)

Quarterly ULC

Compensation of Employees

QNA 1959

PCoE² 1970

PCoE² 1970

PCoE² 1970

PCoE² 1970

PCoE² 1970

Value Added

QNA 1988

IPI³ 1919

IPI³ 1919

IPI⁴ 1958

NA

NA

Footnotes:

2. Sourced via Bureau of Labor Statistics (BLS), tables:

• Employment, hours, and earnings from current employment statistics survey (national) - average weekly earnings of production workers; and,
• Employment, hours, and earnings from current employment statistics survey (national) - All employees.

These two measures are multiplied together by industry to give a proxy compensation of employees measure.

3. Sourced via US Federal Reserve.

4. Sourced via US Census Bureau.

Annual Data

Total Labour Costs

Real Output

Employed

Caution needs to be taken when using productivity measures derived from 'Hours' data ie $US (PPP adjusted) Labour compensation per hour. This is due to a break in series (1998-1999) from the introduction of the new NAICS classification and as such activities: Trade, Transport and Communication (G_I); and Financial and Business Services (J_K) have been suppressed.

Unit Labour Cost

Related Indicators

Quarterly Data

Total Labour Costs

Quarterly proxy data (multiplicative sum of: Average Earnings; and Number of Employees) for the activities: Manufacturing (D); Industry (C_E); Construction (F); Trade, Transport and Communication (G_I); Financial and Business Services (J_K) are used as the indicator of Quarterly Compensation of Employees (the target variable for Total Labour Costs). For the activity; Market Services (G_K) - a 'Residual Compilation' approach is undertaken, this approach was decided on after a broad and extensive investigation and was prompted by a lack of source data and the need for consistency. The residual compilation method is calculated after the benchmarking procedure and is the product of: the Business Sector (C_K) minus Industry (C_E) minus Construction (F).

Correlation of annual growth rates between the proxy variables and Annual Compensation of Employees provides an indicator of the likely quality of the proxy variable and can be found here: Correlations.

Note that Quarterly Total Labour Costs published for Transport and Communication (G_I) and Financial and Business Services (J_K) are based on the above proxy source but these are not used in the derivation of Unit Labour Cost indicators as there is no corresponding Real Output data.

Real Output

Quarterly proxy data (Industrial Production Index) for the activities: Manufacturing (D); Industry (C_E); and a partial coverage indicator (‘Production of dwellings') for Construction (F) are used as the indicator of Quarterly Value Added (the target variable for Real Output). For the activity; Market Services (G_K) - a 'Residual Compilation' approach is undertaken, this approach was decided on after a broad and extensive investigation and was prompted by a lack of source data and the need for consistency. The residual compilation method is calculated after the benchmarking procedure and is the product of: the Business Sector (C_K) minus Industry (C_E) minus Construction (F).

Correlation of annual growth rates between the proxy variables and Annual Value Added provides an indicator of the likely quality of the proxy variable and can be found here: Correlations.

For Construction (partial coverage proxy indicator - ‘Production of dwellings') there is a relatively low correlation which suggests that users should take caution when using the resultant quarterly Unit Labour Cost index prior to reconciliation with annual benchmark data (which generally occurs with a 12-18 month lag).

Unit Labour Cost

Due to the lack of quarterly data for some Real Output activities, only five quarterly Unit Labour Cost indicator activities will be published for the United States: Total Economy; Manufacturing; Industry; Construction; Market Services; and, the Business Sector.

Production

On a quarterly basis, only seasonally adjusted Value Added (Real Output) and Compensation of Employees (Total Labour Costs) data are available for the United States. Consequently, non-seasonally adjusted (raw) quarterly Unit Labour Costs for the United States are not available.

As outlined above, the source data for the activity 'Market Services' is calculated via a 'Residual Compilation' methodology. The outcome of using source data computed as such in the final Unit Labour Cost calculation could in some circumstances lead to lower than expected correlations between the quarterly and annual Unit Labour Cost indexes (using year-on-year growth rates) for this activity. However, this methodology was only chosen after all options were investigated and has been found to provide the most robust and comparable quarterly Unit Labour Cost for the United States for this activity.

Business Sector (excl. Agriculture)

It should be noted that the US Bureau of Labor Statistics produces a number of quarterly unit labour cost estimates (http://data.bls.gov/PDQ/outside.jsp?survey=pr) for various sectors including the Nonfarm Business which is equivalent to the OECD's 'Business Sector (excl. Agriculture)'.

Analysis

Note that for the USA the Business Sector (Activity C_K) is in fact a true business sector (excluding Agriculture) measure because it is derived from institutional account data (i.e. Nonfarm private sector). This can be explained as such:
For all OECD countries except the United States the Business Sector is an activity (i.e. production account) proxy where the OECD aggregates those industries which by and large consist of market enterprises. This essentially equates to ISIC industries C_K.
The situation in the US is different for two reasons. Firstly, the US (BEA) does not produce quarterly production accounts thus the OECD cannot perform the above described aggregation for quarterly data. Secondly, the US is somewhat unique in that sectors which are predominately government based in other countries have a large market sector in the US (e.g. Health). On a quarterly basis, the US produces institutional sector accounts (e.g. separating economic actors such as households, private sector and government) allowing the OECD to compute a true business (i.e. private) sector (excluding agriculture) measure. The data is accessed directly from:
http://www.bea.gov/bea/dn/nipaweb/SelectTable.asp 1.3.6. Real Gross Value Added by Sector, Chained Dollars

http://www.bea.gov/bea/dn/nipaweb/SelectTable.asp 2.1. Personal Income and Its Disposition.

Comparison analysis has been undertaken between the OECD System of Unit Labour Cost indicators and those Unit Labour Costs as compiled by the United States Bureau of Labor Statistics (BLS). The report can be read here: BLS Comparison.