Labor Productivity on the Rise The BLS reported the following data for the year ended June 2009: In the nonfarm sector, output fell 5.5 percent as labor productivity increased 1.9 percent—the largest increase since 2003—

but in the manufacturing sector, output fell 9.8 percent as labor productivity increased by 4.9 percent—the largest increase since the first quarter of 2005.

Source: bls.gov/news.release, August 11, 2009 In both sectors, output fell while labor productivity increased. Did the quantity of labor (aggregate hours) increase or decrease? In which sector was the change in the quantity of labor larger?