3. TFP: Relative Value of
        Benchmark Measures
In the past, Postal Service TFP has been benchmarked against the Private Non-Farm Business Multifactor Productivity Index (MFP), reported by the Bureau of Labor Statistics (BLS). Although the private non-farm business sector represents 77 percent of the U.S. Gross Domestic Product (GDP), MFP measurements of changes in productivity in this sector are heavily influenced by performance in the capital intensive and high technology sectors of the economy. The broad MFP measure does not provide separate breakouts of service and labor intensive industries, such as the Postal Service, and does not, therefore, provide an ideal benchmark. Nonetheless, historical indices of Postal Service TFP and the broad MFP measure are included here for the record.

Table 3.7 shows annual and cumulative TFP and Output Per Workhour achieved by the Postal Service and shows the MFP index of the broad non-farm economy for the years 1990 through 2001. Over the long run, a successful organization will average positive growth in productivity, as has the Postal Service, but year-to-year fluctuations in TFP and output per workhour are common. Cumulative TFP growth for the Postal Service from 1971 through 2001 is 11.5 percent, or an average annual rate of 0.4 percent. MFP growth for the entire non-farm business segment of the economy during this period was 19.7 percent, or an average of 0.7 percent annually. Cumulative Output Per Workhour growth for the Postal Service for the same period was 26.3 percent, or an average of 0.9 percent per year.