Internet address: http://www.bls.gov/lpc/ USDL 03-202 

Historical, technical TRANSMISSION OF THIS 

 information: (202) 691-5606 MATERIAL IS EMBARGOED 

Current data: (202) 691-5200 UNTIL 8:30 A.M. EDT, 

Media contact: (202) 691-5902 THURSDAY, MAY 1, 2003. 

PRODUCTIVITY AND COSTS 

First Quarter 2003 

 The Bureau of Labor Statistics of the U.S. Department of Labor today reported 

preliminary productivity data—as measured by output per hour of all persons—for the first 

quarter of 2003. The seasonally adjusted annual rates of productivity change in the first quarter 

were: 

2.2 percent in the business sector and 

 1.6 percent in the nonfarm business sector. 

These productivity increases occurred as modest output increases were combined with 

modest declines in the hours worked. In the business sector, output grew 1.7 percent and hours 

of all persons fell 0.5 percent. In nonfarm businesses, output rose 1.4 percent and hours dropped 

0.1 percent. First-quarter measures are summarized in table A and appear in detail in tables 1 

through 5. 

 In manufacturing, productivity changes in the first quarter were: 

2.1 percent in manufacturing, 

2.4 percent in durable goods manufacturing, and 

1.7 percent in nondurable goods manufacturing. 

 Productivity growth in manufacturing in the first quarter of 2003 reflected decreases in 

both output and hours; output declined 0.6 percent and hours of all persons fell 2.6 percent 

(seasonally adjusted annual rates). Output and hours in manufacturing, which includes about 15 

percent of U.S. business sector employment, tend to vary more from quarter to quarter than data 

for the aggregate business and nonfarm business sectors. 

 The data sources and methods used in the preparation of the manufacturing series differ 

from those used in preparing the business and nonfarm business series, and these measures are 

not directly comparable. Output measures for business and nonfarm business are based on 

measures of gross domestic product prepared by the Bureau of Economic Analysis of the U.S. 

Department of Commerce. Quarterly output measures for manufacturing reflect indexes of 

industrial production independently prepared by the Board of Governors of the Federal Reserve 

System. See Technical Notes for further information on data sources (page 8). 
2 

Table A. Productivity and costs: Preliminary first-quarter 2003 measures 

(Seasonally adjusted annual rates) 

Sector 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

Percent change from preceding quarter 

Business 2.2 1.7 -0.5 3.9 0.1 1.7

Nonfarm business 1.6 1.4 -0.1 3.5 -0.3 1.9

Manufacturing 2.1 -0.6 -2.6 4.8 1.0 2.7

Durable 2.4 0.3 -2.0 4.5 0.7 2.1

 Nondurable 1.7 -1.7 -3.3 5.2 1.3 3.4 

Percent change from same quarter a year ago 

Business 2.5 2.3 -0.2 3.5 0.6 1.0

Nonfarm business 2.3 2.3 0.0 3.3 0.4 0.9

Manufacturing 2.8 0.5 -2.2 4.1 1.2 1.3

Durable 4.5 1.5 -2.9 4.7 1.7 0.2

 Nondurable 0.7 -0.6 -1.2 3.4 0.5 2.7 

Business 

Productivity in the business sector increased 2.2 percent between the fourth quarter 2002 

and the first quarter 2003, as output grew 1.7 percent and hours of all persons engaged in the 

sector dropped 0.5 percent (seasonally adjusted annual rates). Revised data for the fourth quarter 

of 2002 show that output per hour increased 0.3 percent, reflecting a 1.7-percent rise in output 

and a 1.5-percent increase in hours at work. (See table 1.) 

Hourly compensation increased 3.9 percent during the first quarter of 2003. This measure 

includes wages and salaries, supplements, employer contributions to employee benefit plans, and 

taxes. Hourly compensation had risen 3.6 percent in the previous quarter. Real hourly

compensation, which takes into account changes in consumer prices, increased 0.1 percent in the 

first quarter of 2003, less than the 1.6-percent increase in the fourth quarter of 2002. 

Unit labor costs rose 1.7 percent in the first quarter of 2003, down from the 3.3-percent 

increase in the fourth quarter. Unit labor costs grew noticeably slower in the first quarter than in

the fourth quarter because the higher growth in productivity was more than enough to offset the 

larger increase in hourly compensation. Growth in unit labor costs is roughly equivalent to the 

change in hourly compensation less the change in output per hour. 

The implicit price deflator for the business sector, which reflects changes in both unit 

labor costs and unit nonlabor payments, rose 1.8 percent in the first quarter. The implicit price 

deflator rose 1.5 percent in the final quarter of 2002. 
3 

Nonfarm business 

Productivity rose 1.6 percent in the nonfarm business sector in first-quarter 2003, as 

output increased 1.4 percent and hours of all persons decreased 0.1 percent (seasonally adjusted 

annual rates). In the fourth quarter of 2002, productivity had increased 0.7 percent, as output 

rose 1.7 percent and hours increased by 0.9 percent. (See table 2.) 

Hourly compensation increased at a 3.5 percent annual rate in the first quarter of 2003, 

down from the 3.9-percent increase in the fourth quarter. When the rise in consumer prices was 

taken into account, real hourly compensation fell 0.3 percent in the first quarter; it had increased 

1.9 percent in the fourth quarter of 2002. 

Unit labor costs grew 1.9 percent in the first quarter of 2003 and 3.2 percent in the fourth 

quarter of 2002. The implicit price deflator for nonfarm business output rose 1.7 percent in the 

first quarter and 1.4 percent one quarter earlier. 

Manufacturing 

Productivity increased 2.1 percent in manufacturing in the first quarter of 2003, as output 

decreased 0.6 percent and hours of all persons declined 2.6 percent (seasonally adjusted annual 

rates). Both output and hours also had fallen in fourth-quarter 2002—by 3.7 and 3.2 percent, 

respectively—and productivity declined 0.5 percent. In the first quarter of 2003, productivity

grew 2.4 percent in durable goods manufacturing, where output increased 0.3 percent and hours 

fell 2.0 percent. Nondurable goods manufacturing productivity rose 1.7 percent, reflecting a 1.7 

percent drop in output and a 3.3 percent decline in hours of all persons. 

Hourly compensation of all manufacturing workers rose 4.8 percent during the first 

quarter, and real hourly compensation increased 1.0 percent. The hourly compensation of 

workers in durable goods manufacturing rose 4.5 percent, while that of employees in nondurable 

goods manufacturing grew 5.2 percent. 

Unit labor costs in manufacturing rose 2.7 percent in the first quarter of 2003, as unit 

labor costs of durable goods producers increased 2.1 percent and those of nondurable goods 

producers increased more, 3.4 percent. 

Fourth-quarter and annual measures for nonfinancial corporations 

Fourth-quarter and annual 2002 measures of productivity and costs also were announced 

today for the nonfinancial corporate sector (tables B, C, and 6). Output per all-employee hour 

grew 5.0 percent from the third to the fourth quarter of 2002, as output grew 4.5 percent and 

employee hours fell 0.5 percent. The nonfinancial corporate sector includes all corporations 

doing business in the United States, except those classified as depository institutions, 

nondepository institutions, security and commodity brokers, insurance carriers, regulated 

investment offices, small business investment offices, and real estate investment trusts. 
4 

Table B. Nonfinancial corporations: Fourth-quarter 2002 productivity and cost measures 

(Seasonally adjusted annual rates) 

Period

Productivity Output Hours

Hourly

compensation

Real

hourly

compensation

Unit 

labor 

costs

Unit 

profits

Implicit 

price 

deflator

Percent change from preceding quarter 

2002 IV 5.0 4.5 -0.5 4.9 2.8 -0.1 20.8 0.9

Percent change from same quarter a year ago 

2002 IV 4.7 3.7 -1.0 3.9 1.6 -0.8 1.9 -0.2

Hourly compensation increased 4.9 percent in the fourth quarter, and real hourly

compensation rose 2.8 percent. Unit labor costs fell 0.1 percent in the fourth quarter of 2002—

the seventh consecutive drop in these costs. In the fourth quarter, unit profits increased at a 20.8 

percent annual rate after falling 11.2 percent in the previous quarter. The implicit price deflator 

for nonfinancial corporate output grew 0.9 percent during the fourth quarter of 2002, compared 

with a 0.5 percent decrease in the third quarter. 

Productivity grew 5.5 percent in calendar year 2002 for nonfinancial corporations, 

following an increase of 1.4 percent in the previous year. (See table C.) Nonfinancial corporate 

output grew 3.2 percent in 2002, and employee hours decreased 2.2 percent. This was the second 

consecutive decrease in employee hours. 

Table C. Nonfinancial corporations: Annual changes in productivity and related measures, 1993-

2002 

Measure 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Productivity........................... 0.7 2.4 1.0 3.2 0.9 3.0 2.7 3.5 1.4 5.5

Output ................................... 3.0 6.4 4.2 5.0 5.9 5.8 5.2 5.0 -0.1 3.2

Hours..................................... 2.3 3.9 3.1 1.8 5.0 2.6 2.4 1.5 -1.5 -2.2

Hourly compensation ............ 2.0 2.1 1.9 2.7 1.3 5.1 4.4 6.7 2.5 3.3

Real hourly compensation..... -0.4 0.0 -0.5 0.0 -0.9 3.6 2.3 3.2 -0.3 1.7

Unit labor costs..................... 1.3 -0.3 0.8 -0.5 0.4 2.0 1.7 3.1 1.0 -2.1

Unit nonlabor costs............... 0.2 1.0 0.9 -1.5 0.3 1.2 1.2 3.3 6.5 0.9

Total unit cost ....................... 1.0 0.1 0.8 -0.8 0.4 1.8 1.5 3.1 2.5 -1.3

Unit profits............................ 13.2 16.3 5.5 9.5 3.1 -9.7 -7.2 -15.2 -11.7 9.0

Implicit price deflator............ 2.1 1.6 1.4 0.4 0.7 0.3 0.6 1.2 1.2 -0.5
5 

Hourly compensation grew 3.3 percent in 2002, and real hourly compensation increased 

1.7 percent. Total unit costs fell 1.3 percent, reflecting a 2.1 decrease in unit labor costs and a 

0.9 percent rise in unit nonlabor costs. Unit profits rose 9.0 percent in 2002, the first annual 

increase since a 3.1-percent rise in 1997. The implicit price deflator, which reflects both the unit 

costs and unit profits measures, dropped 0.5 percent in 2002. 

Revised measures 

Current and previous measures for the third and fourth quarters of 2002 for the business, 

nonfarm business, and manufacturing sectors are compared in table D. Some of the quarterly

movements differ from those reported on March 6. Hourly compensation, real hourly

compensation, and unit labor costs in the business and nonfarm business sectors were revised 

down. In manufacturing, fourth quarter output and productivity were revised down while unit 

labor costs were revised up. 

Table D. Previous and revised productivity and related measures 

Quarterly percent change at seasonally adjusted annual rate 

Sector 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

Fourth quarter 2002 

Business:

Previous........................ 0.3 1.8 1.5 4.2 2.2 3.9

Current ......................... 0.3 1.7 1.5 3.6 1.6 3.3

Nonfarm business:

Previous........................ 0.8 1.7 0.9 4.6 2.5 3.8

Current ......................... 0.7 1.7 0.9 3.9 1.9 3.2

Manufacturing:

 Previous........................ 0.1 -3.2 -3.2 5.5 3.4 5.4 

 Current ......................... -0.5 -3.7 -3.2 5.4 3.4 5.9 

Third quarter 2002 

Business:

Previous........................ 5.8 5.3 -0.5 5.7 3.5 0.0

 Current ......................... 5.8 5.3 -0.5 2.2 0.1 -3.4 

Nonfarm business:

 Previous........................ 5.5 5.2 -0.2 5.4 3.1 -0.1 

 Current ......................... 5.5 5.2 -0.2 1.8 -0.3 -3.4 

Manufacturing:

Previous........................ 5.5 3.0 -2.4 5.6 3.4 0.1

 Current ......................... 5.5 3.0 -2.4 1.4 -0.8 -3.9 
6 

For third-quarter 2002, hourly compensation was revised down sharply in the business, 

nonfarm business, and manufacturing sectors; unit labor costs were revised down accordingly. 

Unit labor costs in the business and nonfarm business sectors now show declines of 3.4 percent 

in the third quarter. In the manufacturing sector, unit labor costs dropped 3.9 percent in the third 

quarter compared to the 0.1-percent increase reported on March 6. 

The Consumer Price Index Research Series has been updated. This affected indexes of 

real hourly compensation for all years. 

Revised measures: Nonfinancial Corporations 

Productivity and cost measures for nonfinancial corporations for the third quarter of 2002 

also were revised to incorporate more recent information than was available on March 6. 

Productivity and output in this sector were revised down for the third quarter of 2002. 

Productivity grew at an annual rate of 3.4 percent, compared with the increase of 5.5 percent 

published March 6. Hourly compensation was revised down more than output per hour, so unit 

labor costs fell 0.5 percent, rather than increasing. (See tables E and 6.) 

Table E. Nonfinancial corporations: Previous and revised productivity and cost measures 

Quarterly percent changes at seasonally adjusted annual rates 

Productivity Output Hours

Hourly

compensation

Real

hourly

compensation

Unit 

labor 

costs

Unit 

profits

Implicit 

price 

deflator

Third quarter 2002 

Previous............ 5.5 3.8 -1.6 6.1 3.9 0.6 -13.0 -0.5

Current ............. 3.4 1.7 -1.6 2.9 0.7 -0.5 -11.2 -0.5

Next release date 

The next release of Productivity and Costs is scheduled for 8:30 AM EDT, 

Wednesday, June 4, 2003. First-quarter measures for nonfinancial corporations and revised 

measures for business, nonfarm business, and manufacturing will be released at that time. 
7 

Current and upcoming changes to productivity and cost data 

Measures of employment and hours for self-employed persons and unpaid family workers 

in nonfarm establishments, hours of employees in government enterprises, and employment and 

hours of all persons working on farms incorporate data from the Current Population Survey

(CPS). Data from this survey were revised to incorporate population controls from the 2000 

population census and new industry and occupational classification systems. For the productivity

and costs measures, historical measures of employment and hours through the fourth quarter of 

2002 have not yet been revised to incorporate these changes to the household survey. First 

quarter measures were constructed by calculating the change in the first quarter 2003 data to 

revised fourth quarter 2002 data and applying the movements to unrevised fourth-quarter levels. 

The BLS intends to incorporate historical revisions to the employment and hours measures 

constructed from the CPS in its Aug. 7 release. 

At that time, BLS also will incorporate historical revisions to employment and hours data 

for the business and nonfarm business sectors based on data from the nonfarm payroll series. 

These revisions will include conversion to the 2002 North American Industry Classification 

System (NAICS) from the 1987 Standard Industrial Classification (SIC), the annual benchmark 

to levels from the Unemployment Insurance program, and new information on seasonal patterns. 

The Bureau of Labor Statistics discontinued the Hours at Work Survey (HWS), used to 

adjust the paid hours of wage and salary employees to their hours at the workplace, following the 

2000 survey. The survey will be replaced with a comparable set of measures derived from 

information on scheduled hours of work and paid leave collected from employers participating in 

the National Compensation Survey. 

The new ratios of hours worked to hours paid will be incorporated into the measures of 

employee hours beginning with the release of the second quarter 2003 data on Aug. 7. These 

ratios will be adjusted to levels from the HWS and will cover the period following 2000. 
8 

TECHNICAL NOTES 

Labor Hours: Hours data for the labor productivity

and cost measures include hours for all persons 

working in the sector—wage and salary workers, 

the self-employed, and unpaid family workers. The 

primary source of hours and employment data is the 

BLS Current Employment Statistics (CES)

program, which provides monthly survey data on 

the number of jobs held by wage and salary workers 

in nonfarm establishments. The CES also provides 

average weekly paid hours of production and 

nonsupervisory workers in these establishments. 

The Office of Productivity and Technology

estimates average weekly paid hours of

nonproduction and supervisory workers. Weekly

paid hours are adjusted to hours at work using the 

BLS Hours at Work survey, conducted for this 

purpose. 

Data from the BLS Current Population 

Survey (CPS) are used for farm labor; in the 

nonfarm sector, the National Income and Product 

Accounts (NIPA) prepared by the Bureau of 

Economic Analysis (BEA) of the Department of 

Commerce and the CPS are used to measure labor 

input for government enterprises, proprietors, and 

unpaid family workers. 

Output: Business sector output is an annualweighted index constructed after excluding from 

gross domestic product (GDP) the following

outputs: General government, nonprofit institutions, 

paid employees of private households, and the 

rental value of owner-occupied dwellings. Corresponding exclusions also are made in labor 

inputs. Business output accounted for about 77 

percent of the value of GDP in 1996. Nonfarm 

business, which also excludes farming, accounted 

for about 76 percent of GDP in 1996. 

Annual indexes for manufacturing and its 

durable and nondurable goods components are 

constructed by deflating current-dollar industry

value of production data from the U.S. Bureau of 

the Census with deflators from the BEA. These 

deflators are based on data from the BLS producer

price program and other sources. The industry

shipments are aggregated using annual weights, and 

intrasector transactions are removed. Quarterly

manufacturing output measures are based on the 

index of industrial production prepared monthly by

the Board of Governors of the Federal Reserve 

System adjusted to be consistent with annual 

indexes of manufacturing sector output prepared by

BLS. Durables include the following 2-digit SIC 

industries: Primary metal industries; fabricated 

metal products; nonelectrical machinery; industrial 

and commercial machinery and computer 

equipment; electronic and other electrical

equipment; transportation equipment; instruments; 

lumber and lumber products; furniture and fixtures; 

stone, clay, and glass and concrete products; and 

miscellaneous manufactures. Nondurables include: 

Food and kindred products, tobacco products, 

textile mill products, apparel products, paper and 

allied products, printing and publishing, chemicals 

and chemical products, petroleum refining and 

related industries, rubber and plastic products, and 

leather and leather products. 

Nonfinancial corporate output is an annualweighted index calculated on the basis of the costs 

incurred and the incomes earned from production. 

The output measure excludes the following outputs 

from GDP: general government; nonprofit 

institutions; employees of private households; the 

rental value of owner-occupied dwellings; 

unincorporated business; and those corporations 

which are depository institutions, nondepository

institutions, security and commodity brokers, 

insurance carriers, regulated investment offices, 

small business investment offices, and real estate

investment trusts. Nonfinancial corporations 

accounted for about 53 percent of the value of GDP 

in 1996. 

Productivity: These productivity measures 

describe the relationship between real output and 

the labor time involved in its production. They

show the changes from period to period in the 

amount of goods and services produced per hour. 

Although these measures relate output to hours at 

work of all persons engaged in a sector, they do not 

measure the specific contribution of labor, capital, 

or any other factor of production. Rather, they

reflect the joint effects of many influences, including changes in technology; capital 

investment; level of output; utilization of capacity, 

energy, and materials; the organization of 

production; managerial skill; and the characteristics 

and effort of the work force. 

Information in this release will be made

available to sensory-impaired individuals upon 

request. Voice phone: 202-691-5200; Federal Relay

Service number: 1-800-877-8339. 
9 

 Table 1. Business sector: Productivity, hourly compensation, unit labor costs, 

 and prices, seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit Unit non- Implicit 

 and hour of of all tion per tion per labor labor pay- price 

 quarter all persons Output persons hour (1) hour (2) costs ments (3) deflator (4) 

 --------------------------------------------------------------------------------------------------------- 

 Indexes 1992=100 

 2001 I 117.5 140.4 119.5 137.3 111.8 116.9 112.3 115.2 

 II 117.4 139.4 118.7 137.5 111.0 117.1 113.6 115.8 

 III 117.9 139.1 117.9 137.8 r111.0 116.8 115.5 116.4 

 IV 120.1 140.3 116.8 138.3 111.6 115.1 117.2 115.9 

 ANNUAL 118.2 139.8 118.2 137.7 111.4 116.5 114.7 115.8 

 2002 I 122.5 142.3 116.1 139.3 r112.1 113.7 119.9 116.0 

 II 123.1 142.5 115.8 140.8 112.3 114.4 119.3 116.2 

 III 124.8 144.4 115.6 r141.5 r112.3 r113.4 r121.4 116.3 

 IV 124.9 145.0 116.1 r142.8 r112.7 r114.3 r120.9 r116.8 

 ANNUAL 123.8 143.5 115.9 r141.1 r112.3 r113.9 r120.4 116.3 

 2003 I 125.6 145.6 115.9 144.2 112.7 114.8 121.5 117.3 

 --------------------------------------------------------------------------------------------------------- 

 Percent change from previous quarter at annual rate(5) 

 2001 I -1.5 -1.0 0.4 3.1 -0.6 4.7 1.1 3.4 

 II -0.2 -2.8 -2.6 0.5 r-2.7 0.7 4.9 2.2 

 III 1.8 -0.9 -2.6 0.9 r0.0 -0.9 6.8 1.8 

 IV 7.6 3.5 -3.8 1.4 r1.9 -5.8 6.1 -1.6 

 ANNUAL 1.1 -0.2 -1.3 2.9 0.2 1.8 2.4 2.0 

 2002 I 8.3 5.9 -2.2 3.0 r1.8 -4.9 9.5 0.3 

 II 1.8 0.6 -1.2 4.3 r0.7 2.4 -2.1 0.7 

 III 5.8 5.3 -0.5 r2.2 r0.1 r-3.4 r7.0 0.5 

 IV 0.3 r1.7 1.5 r3.6 r1.6 r3.3 r-1.4 r1.5 

 ANNUAL 4.8 2.7 -2.0 r2.5 r0.9 r-2.2 r5.0 0.4 

 2003 I 2.2 1.7 -0.5 3.9 0.1 1.7 1.9 1.8 

 --------------------------------------------------------------------------------------------------------- 

 Percent change from corresponding quarter of previous year 

 2001 I 1.9 1.4 -0.5 4.5 r1.1 2.6 1.4 2.2 

 II 0.2 -0.7 -0.9 3.9 0.5 3.6 -0.4 2.1 

 III 0.5 -1.0 -1.5 2.0 -0.6 1.5 3.8 2.3 

 IV 1.9 -0.3 -2.2 1.5 -0.3 -0.4 4.7 1.4 

 ANNUAL 1.1 -0.2 -1.3 2.9 0.2 1.8 2.4 2.0 

 2002 I 4.3 1.4 -2.8 1.4 0.2 -2.8 6.8 0.7 

 II 4.8 2.3 -2.5 2.4 1.1 -2.3 5.0 0.3 

 III 5.9 3.8 -1.9 r2.7 r1.1 r-3.0 r5.1 0.0 

 IV 4.0 3.4 -0.6 r3.3 r1.0 r-0.7 r3.2 0.7 

 ANNUAL 4.8 2.7 -2.0 r2.5 r0.9 r-2.2 r5.0 0.4 

 2003 I 2.5 2.3 -0.2 3.5 0.6 1.0 1.3 1.1 

 --------------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. May 1, 2003 

 r=revised Source: Bureau of Labor Statistics 
10 

 Table 2. Nonfarm business sector: Productivity, hourly compensation, unit labor costs, 

 and prices, seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit Unit non- Implicit 

 and hour of of all tion per tion per labor labor pay- price 

 quarter all persons Output persons hour (1) hour (2) costs ments (3) deflator (4) 

 --------------------------------------------------------------------------------------------------------- 

 Indexes 1992=100 

 2001 I 116.7 140.7 120.6 136.3 110.9 116.8 113.8 115.7 

 II 116.6 139.7 119.8 136.3 110.1 116.9 115.3 116.3 

 III 117.2 139.4 118.9 136.7 r110.1 116.6 117.2 116.8 

 IV 119.3 140.4 117.7 137.2 110.7 115.0 119.2 116.5 

 ANNUAL 117.5 140.1 119.2 136.6 110.5 116.3 116.4 116.3 

 2002 I 121.8 142.5 117.0 138.1 111.1 113.4 121.7 116.4 

 II 122.3 142.9 116.8 139.5 r111.3 114.1 121.7 116.8 

 III 123.9 144.7 116.8 r140.1 r111.2 r113.1 r123.5 116.9 

 IV 124.2 145.3 117.0 r141.5 r111.7 r113.9 r123.1 r117.3 

 ANNUAL 123.1 143.9 116.9 r139.8 r111.3 r113.6 r122.5 r116.9 

 2003 I 124.7 145.8 117.0 142.7 111.6 114.5 123.5 117.8 

 --------------------------------------------------------------------------------------------------------- 

 Percent change from previous quarter at annual rate(5) 

 2001 I -1.4 -0.9 0.5 2.8 -0.9 4.3 1.5 3.3 

 II -0.1 -2.7 -2.6 0.1 r-3.0 0.3 5.1 2.0 

 III 2.1 -0.8 -2.9 1.0 r0.1 -1.1 6.8 1.7 

 IV 7.2 2.9 -4.0 1.5 r2.1 -5.4 6.9 -1.0 

 ANNUAL 1.1 -0.1 -1.2 2.7 -0.1 1.6 2.5 1.9 

 2002 I 8.6 6.2 -2.3 2.9 1.6 -5.3 8.8 -0.2 

 II 1.7 0.9 -0.7 4.0 0.4 2.3 0.1 1.4 

 III 5.5 5.2 -0.2 r1.8 r-0.3 r-3.4 r6.1 0.1 

 IV r0.7 1.7 0.9 r3.9 r1.9 r3.2 r-1.4 r1.4 

 ANNUAL 4.8 2.7 -2.0 r2.4 r0.8 r-2.3 r5.3 0.5 

 2003 I 1.6 1.4 -0.1 3.5 -0.3 1.9 1.3 1.7 

 --------------------------------------------------------------------------------------------------------- 

 Percent change from corresponding quarter of previous year 

 2001 I 1.7 1.4 -0.3 4.2 r0.8 2.4 1.4 2.1 

 II 0.2 -0.6 -0.8 3.7 0.3 3.5 -0.3 2.1 

 III 0.6 -0.8 -1.4 1.8 r-0.9 1.2 3.8 2.2 

 IV 1.9 -0.4 -2.3 1.4 -0.4 -0.5 5.1 1.5 

 ANNUAL 1.1 -0.1 -1.2 2.7 -0.1 1.6 2.5 1.9 

 2002 I 4.4 1.3 -2.9 1.4 0.2 -2.9 6.9 0.6 

 II 4.9 2.3 -2.5 2.3 1.0 -2.4 5.6 0.5 

 III 5.7 3.8 -1.8 r2.5 r0.9 r-3.0 r5.4 0.1 

 IV 4.1 3.5 -0.6 r3.2 r0.9 r-0.9 r3.3 r0.7 

 ANNUAL 4.8 2.7 -2.0 r2.4 r0.8 r-2.3 r5.3 0.5 

 2003 I 2.3 2.3 0.0 3.3 0.4 0.9 1.5 1.2 

 --------------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. May 1, 2003 

 r=revised Source: Bureau of Labor Statistics 
11 

 Table 3. Manufacturing sector: Productivity, hourly compensation, and unit labor costs, 

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

 quarter all persons Output persons hour (1) hour (2) costs 

 -------------------------------------------------------------------------------------------------- 

 Indexes 1992=100 

 2001 I 135.2 134.9 99.8 132.0 r107.5 97.6 

 II 135.2 132.8 98.2 133.0 107.4 98.4 

 III 136.2 131.1 96.3 133.3 r107.4 97.9 

 IV 137.5 129.1 93.9 134.3 r108.4 97.7 

 ANNUAL 136.0 132.0 97.1 133.1 107.7 97.9 

 2002 I 140.1 129.5 92.4 135.6 r109.1 96.8 

 II 141.5 130.6 92.3 137.2 109.4 96.9 

 III 143.4 131.6 91.7 r137.7 r109.2 r96.0 

 IV r143.3 r130.3 91.0 r139.5 r110.1 r97.4 

 ANNUAL 142.1 130.5 91.8 r137.5 r109.4 r96.8 

 2003 I 144.0 130.1 90.4 141.2 110.4 98.0 

 -------------------------------------------------------------------------------------------------- 

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.1 -7.6 -5.6 1.6 -2.1 3.7 

 II 0.0 -6.2 -6.2 3.1 r-0.2 3.1 

 III 3.0 -4.9 -7.6 1.0 r0.1 -1.9 

 IV 3.9 -6.1 -9.7 2.9 r3.5 -1.0 

 ANNUAL 0.8 -4.9 -5.6 1.5 -1.2 0.8 

 2002 I 7.8 1.2 -6.1 3.8 r2.6 -3.7 

 II 4.2 3.5 -0.7 5.0 1.4 0.7 

 III 5.5 3.0 -2.4 r1.4 r-0.8 r-3.9 

 IV r-0.5 r-3.7 -3.2 r5.4 3.4 r5.9 

 ANNUAL 4.5 -1.1 -5.4 r3.3 r1.6 r-1.2 

 2003 I 2.1 -0.6 -2.6 4.8 1.0 2.7 

 -------------------------------------------------------------------------------------------------- 

 Percent change from corresponding quarter of previous year 

 2001 I 1.2 -2.4 -3.6 0.5 r-2.9 -0.7 

 II 0.2 -5.0 -5.2 2.9 -0.5 2.6 

 III 0.6 -5.9 -6.4 0.8 -1.8 0.2 

 IV 1.2 -6.2 -7.3 2.1 0.3 1.0 

 ANNUAL 0.8 -4.9 -5.6 1.5 -1.2 0.8 

 2002 I 3.6 -4.0 -7.4 2.7 1.5 -0.9 

 II 4.7 -1.7 -6.1 3.2 1.9 -1.5 

 III 5.3 0.3 -4.8 r3.3 r1.6 r-2.0 

 IV r4.2 r1.0 -3.1 r3.9 r1.6 r-0.3 

 ANNUAL 4.5 -1.1 -5.4 r3.3 r1.6 r-1.2 

 2003 I 2.8 0.5 -2.2 4.1 1.2 1.3 

u of Labor Statistics 

 -------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. May 1, 2003 

 r=revised Source: Burea
12 

 ANNUAL -0.1 -6.3 -6.2 0.9 -1.9 0.9 

 Table 4. Durable manufacturing sector: Productivity, hourly compensation, and unit labor costs, 

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

 quarter all persons Output persons hour (1) hour (2) costs 

 -------------------------------------------------------------------------------------------------- 

 Indexes 1992=100 

 2001 I 149.3 158.3 106.0 129.4 105.3 86.7 

 II 148.8 154.9 104.1 130.5 105.4 87.7 

 III 149.6 151.8 101.4 130.2 r104.9 87.0 

 IV 151.0 148.6 98.5 131.8 r106.4 87.3 

 ANNUAL 149.6 153.4 102.5 130.4 105.5 87.2 

 2002 I 154.7 149.4 96.5 132.7 106.7 85.8 

 II 156.8 151.2 96.4 134.8 107.5 86.0 

 III 159.8 152.6 95.5 r135.2 r107.3 r84.6 

 IV r160.7 r151.5 94.2 r137.3 r108.4 r85.4 

 ANNUAL r158.0 151.2 95.7 r135.0 r107.5 r85.4 

 2003 I 161.7 151.6 93.7 138.9 108.6 85.9 

 -------------------------------------------------------------------------------------------------- 

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.1 -8.9 -6.9 3.1 -0.6 5.3 

 II -1.4 -8.2 -6.9 3.6 r0.3 5.1 

 III 2.4 -7.9 -10.0 -1.0 r-1.9 -3.3 

 IV 3.5 -8.0 -11.2 5.0 r5.6 1.5 

 

 2002 I 10.4 2.1 -7.5 2.8 1.5 -6.9 

 II 5.5 4.9 -0.5 6.7 r3.0 1.1 

 III 7.9 3.8 -3.8 r1.2 r-1.0 r-6.2 

 IV r2.3 r-2.9 r-5.1 r6.3 4.3 r4.0 

 ANNUAL 5.6 r-1.5 -6.7 r3.5 r1.9 r-2.0 

 2003 I 2.4 0.3 -2.0 4.5 0.7 2.1 

 -------------------------------------------------------------------------------------------------- 

 Percent change from corresponding quarter of previous year 

 2001 I 0.5 -2.9 -3.3 -1.1 r-4.3 -1.6 

 II -0.8 -6.3 -5.5 2.3 -1.0 3.2 

 III -0.4 -7.8 -7.4 -0.3 r-2.9 0.1 

 IV 0.6 -8.2 -8.8 2.6 0.8 2.1 

 ANNUAL -0.1 -6.3 -6.2 0.9 -1.9 0.9 

 2002 I 3.6 -5.6 -8.9 2.6 r1.3 -1.0 

 II 5.4 -2.4 -7.4 3.3 2.0 -2.0 

 III 6.8 0.5 -5.9 r3.9 r2.3 r-2.7 

 IV r6.5 r1.9 -4.3 r4.2 r1.9 r-2.1 

 ANNUAL 5.6 r-1.5 -6.7 r3.5 r1.9 r-2.0 

 2003 I 4.5 1.5 -2.9 4.7 1.7 0.2 

u of Labor Statistics 

 -------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. May 1, 2003 

 r=revised Source: Burea
13 

 Table 5. Nondurable manufacturing sector: Productivity, hourly compensation, and unit labor costs, 

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

 quarter all persons Output persons hour (1) hour (2) costs 

 -------------------------------------------------------------------------------------------------- 

 Indexes 1992=100 

 2001 I 123.1 112.7 91.6 134.7 109.7 109.4 

 II 123.6 111.7 90.4 135.5 109.4 109.7 

 III 124.3 111.3 89.5 137.2 r110.5 110.3 

 IV 125.5 110.1 87.8 137.1 110.6 109.2 

 ANNUAL 124.1 111.5 89.8 136.1 110.1 109.7 

 2002 I 126.8 110.2 86.9 139.1 111.9 109.7 

 II 127.7 110.8 86.7 139.8 111.5 109.5 

 III 128.4 111.4 86.7 r140.5 r111.4 r109.4 

 IV r127.1 r110.1 86.6 r142.0 r112.1 r111.7 

 ANNUAL r127.5 r110.6 86.7 r140.3 r111.7 r110.1 

 2003 I 127.6 109.6 85.9 143.8 112.4 112.7 

 -------------------------------------------------------------------------------------------------- 

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.5 -6.0 -3.6 -0.8 -4.4 1.8 

 II 1.3 -3.8 -5.0 2.3 r-0.9 0.9 

 III 2.6 -1.4 -3.8 5.1 r4.1 2.4 

 IV 3.6 -4.0 -7.4 -0.3 r0.2 -3.8 

 ANNUAL 1.6 -3.2 -4.7 2.9 0.1 1.3 

 2002 I 4.3 0.3 -3.9 6.0 r4.7 1.6 

 II 2.9 1.9 -0.9 2.2 -1.3 -0.7 

 III 2.4 2.3 -0.1 r1.9 r-0.2 r-0.4 

 IV r-4.1 r-4.6 -0.5 r4.3 2.3 r8.9 

 ANNUAL r2.7 r-0.8 -3.4 r3.1 r1.5 r0.4 

 2003 I 1.7 -1.7 -3.3 5.2 1.3 3.4 

 -------------------------------------------------------------------------------------------------- 

 Percent change from corresponding quarter of previous year 

 2001 I 2.1 -1.9 -3.9 3.1 r-0.3 1.0 

 II 1.5 -3.4 -4.8 3.9 0.5 2.4 

 III 1.5 -3.5 -4.9 3.0 r0.3 1.5 

 IV 1.2 -3.8 -5.0 1.5 -0.3 0.3 

 ANNUAL 1.6 -3.2 -4.7 2.9 0.1 1.3 

 2002 I 3.0 -2.2 -5.0 3.2 2.0 0.2 

 II 3.4 -0.8 -4.0 3.2 1.9 -0.2 

 III 3.3 0.1 -3.1 r2.4 r0.8 r-0.9 

 IV r1.3 r-0.1 -1.4 r3.6 r1.3 r2.3 

 ANNUAL r2.7 r-0.8 -3.4 r3.1 r1.5 r0.4 

 2003 I 0.7 -0.6 -1.2 3.4 0.5 2.7 

 -------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. May 1, 2003 

 r=revised Source: Bureau of Labor Statistics 
14 

 Indexes 1992=100 

 Table 6. Nonfinancial corporations: Productivity, hourly compensation, unit labor costs, unit profits, 

 and prices, seasonally adjusted 

 

 Output Hourly Real Unit Total Unit Implicit 

 Year per all- compen- hourly Unit non- unit pro- price 

 and employee Employee sation compen- labor labor costs fits deflator 

 quarter hour Output hours (1) sation(2) costs costs(6) (7) (8) (4) 

 ---------------------------------------------------------------------------------------------------------- 

 

 2000 I 117.7 147.3 125.1 126.9 r106.8 107.8 104.5 106.9 119.5 108.0 

 II 118.3 147.9 125.0 127.8 r106.7 108.0 106.3 107.5 118.8 108.5 

 III 119.5 149.4 125.0 130.4 107.9 109.1 107.1 108.6 109.5 108.6 

 IV 119.5 149.2 124.8 131.7 108.2 110.2 108.9 109.8 98.6 108.9 

 ANNUAL 118.8 148.4 125.0 129.2 107.4 108.8 106.7 108.2 111.6 108.5 

 2001 I 118.8 147.9 124.6 131.3 106.9 110.6 111.6 110.8 93.1 109.3 

 II 119.4 147.8 123.7 131.9 106.5 110.4 113.5 111.3 95.4 109.9 

 III 120.4 147.7 122.7 132.7 r106.9 110.3 115.5 111.7 97.9 110.5 

 IV 123.5 149.6 121.2 133.6 107.8 108.2 114.1 109.8 107.6 109.6 

 ANNUAL 120.5 148.2 123.0 132.4 107.0 109.9 113.7 110.9 98.5 109.8 

 2002 I 124.9 150.8 120.8 134.7 108.4 107.9 114.0 109.5 107.6 109.4 

 II 126.7 152.8 120.6 136.2 108.6 107.5 114.5 109.4 107.8 109.3 

 III r127.7 r153.4 120.1 r137.2 r108.8 r107.4 r115.4 109.6 r104.6 109.1 

 IV 129.3 155.1 120.0 138.8 109.6 107.4 114.7 109.3 109.7 109.4 

 ANNUAL 127.1 153.0 120.4 136.7 108.8 107.5 114.6 109.5 107.4 109.3 

 ---------------------------------------------------------------------------------------------------------- 

 Percent change from previous quarter at annual rate(5) 

 2000 I 7.1 9.5 2.3 14.2 r10.1 6.7 -0.4 4.7 -19.0 2.2 

 II 2.0 1.6 -0.4 2.8 r-0.5 0.8 7.0 2.4 -2.2 2.0 

 III 4.0 4.0 0.0 8.5 4.7 4.2 3.0 3.9 -27.8 0.6 

 IV 0.1 -0.4 -0.5 4.1 r1.2 4.0 6.9 4.8 -34.5 0.8 

 ANNUAL 3.5 5.0 1.5 6.7 3.2 3.1 3.3 3.1 -15.2 1.2 

 2001 I -2.6 -3.3 -0.7 -1.2 -4.8 1.4 10.1 3.7 -20.2 1.7 

 II 2.2 -0.5 -2.7 1.8 r-1.4 -0.4 7.1 1.6 10.0 2.2 

 III 3.2 -0.3 -3.4 2.5 r1.6 -0.6 7.2 1.5 10.8 2.2 

 IV 10.7 5.4 -4.8 2.6 r3.2 -7.3 -4.9 -6.7 46.1 -3.3 

 ANNUAL 1.4 -0.1 -1.5 2.5 -0.3 1.0 6.5 2.5 -11.7 1.2 

 2002 I 4.7 3.3 -1.3 3.5 2.2 -1.2 -0.2 -0.9 -0.2 -0.8 

 II 5.8 5.3 -0.5 4.5 0.9 -1.3 1.7 -0.5 0.9 -0.3 

 III r3.4 r1.7 -1.6 r2.9 r0.7 r-0.5 r3.1 r0.5 r-11.2 -0.5 

 IV 5.0 4.5 -0.5 4.9 2.8 -0.1 -2.3 -0.7 20.8 0.9 

 ANNUAL 5.5 3.2 -2.2 3.3 1.7 -2.1 0.9 -1.3 9.0 -0.5 

 ---------------------------------------------------------------------------------------------------------- 

 Percent change from corresponding quarter of previous year 

 2000 I 3.0 5.7 2.6 5.6 2.3 2.5 2.9 2.6 -12.9 0.9 

 II 3.5 5.4 1.9 6.1 2.8 2.6 3.5 2.8 -12.4 1.2 

 III 4.2 5.4 1.2 7.6 4.0 3.3 2.5 3.1 -14.2 1.3 

 IV 3.3 3.6 0.3 7.3 3.8 3.9 4.1 4.0 -21.8 1.4 

 ANNUAL 3.5 5.0 1.5 6.7 3.2 3.1 3.3 3.1 -15.2 1.2 

 2001 I 0.9 0.4 -0.4 3.5 r0.1 2.6 6.7 3.7 -22.0 1.3 

 II 0.9 -0.1 -1.0 3.2 r-0.2 2.3 6.8 3.5 -19.7 1.3 

 III 0.7 -1.1 -1.8 1.8 r-0.9 1.1 7.8 2.9 -10.6 1.7 

 IV 3.3 0.3 -2.9 1.4 -0.4 -1.8 4.7 0.0 9.2 0.7 

 ANNUAL 1.4 -0.1 -1.5 2.5 -0.3 1.0 6.5 2.5 -11.7 1.2 

 2002 I 5.2 1.9 -3.0 2.6 1.4 -2.4 2.2 -1.2 15.5 0.0 

 II 6.1 3.4 -2.5 3.3 2.0 -2.6 0.9 -1.7 13.0 -0.6 

 III r6.1 r3.9 -2.1 r3.3 r1.7 r-2.6 r-0.1 -1.9 r6.9 -1.3 

 IV 4.7 3.7 -1.0 3.9 1.6 -0.8 0.6 -0.4 1.9 -0.2 

 ANNUAL 5.5 3.2 -2.2 3.3 1.7 -2.1 0.9 -1.3 9.0 -0.5 

 ---------------------------------------------------------------------------------------------------------- 

u of Labor Statistics 

 See footnotes following Table 6. May 1, 2003 

 r=revised Source: Burea
15 

SOURCES: Output data are from the Bureau of Economic Analysis and the Census Bureau of 

the U.S. Department of Commerce; the Bureau of Labor Statistics, U.S. Department of Labor; 

and the Federal Reserve Board. Compensation and hours data are from the Bureau of Labor 

Statistics and the Bureau of Economic Analysis. 

RELIABILITY: Productivity and cost measures are regularly revised as more complete 

information becomes available. The measures are first published within 40 days of the close of 

the reference period; revisions appear 30 days later, and second revisions after an additional 60 

days. In the business sector, the third publication (second revision) of a quarterly index of output 

per hour of all persons has differed from the initial value by between –1.5 and +1.6 index points 

approximately 95 percent of the time. This interval is based on the performance of this measure

between the fourth quarter of 1995 and the fourth quarter of 2002.

Footnotes, Tables 1-6

(1) Wages and salaries of employees plus employers' contributions for social insurance and 

private benefit plans. Except for nonfinancial corporations, where there are no selfemployed, data also include an estimate of wages, salaries, and supplemental payments 

for the self-employed. 

(2) The change for recent quarters is based on the Consumer Price Index for all urban consumers 

(CPI-U). The trend from 1978-2002 is based on the Consumer Price Index research 

series (CPI-U-RS). 

(3) Unit nonlabor payments include profits, capital consumption allowances, interest, rental 

income of persons, and indirect taxes. 

(4) Current dollar output divided by the output index.

(5) Quarterly changes: Percent change compounded at annual rate from the original data rather 

than index numbers. Annual changes: Percent change between annual average levels. 

(6) Unit nonlabor costs include capital consumption allowances, interest, rental income of 

persons, and indirect taxes. For nonfinancial corporations, rental income of persons is 

zero by definition. 

(7) Total unit costs are the sum of unit labor and nonlabor costs. 

(8) Unit profits include corporate profits with inventory valuation and capital consumption 

adjustments.