Internet address: http://www.bls.gov/lpc USDL 03-98 

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 information: (202) 691-5606 MATERIAL IS EMBARGOED 

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

Media contact: (202) 691-5902 THURSDAY, MARCH 6, 2003 

PRODUCTIVITY AND COSTS 

Fourth Quarter and Annual Averages, 2002 

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

fourth-quarter seasonally-adjusted annual rates of productivity change—as measured by output 

per hour of all persons—and revised annual changes for the full year 2002. Percent changes in 

business and nonfarm business productivity were: 

 Fourth Annual averages 

 quarter 2001-2002 

Business sector........................................ 0.3 4.8 

Nonfarm business sector ......................... 0.8 4.8 

 In both sectors, fourth-quarter productivity increased rather than declining as originally 

reported. Fourth-quarter productivity and related measures are summarized in table A and appear 

in detail in tables 1 through 5; the preliminary and revised fourth-quarter and annual data appear 

in table C. 

 In the manufacturing sector, increases in productivity were: 

 Fourth Annual averages 

 quarter 2001-2002 

Manufacturing......................................... 0.1 4.5 

 Durable goods manufacturing............... 2.9 5.6 

 Nondurable goods manufacturing......... -3.4 2.8 

 Manufacturing productivity rose 0.1 percent (seasonally adjusted annual rate) in the 

fourth quarter. This increase was lower than originally reported, reflecting downward revisions 

to output per hour in both the durable and nondurable goods manufacturing subsectors. (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.) 
2 

Table A. Productivity and costs: Revised fourth-quarter 2002 measures 

(Seasonally adjusted annual rates) 

Sector 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

Percent change from preceding quarter 

Business 0.3 1.8 1.5 4.2 2.2 3.9

Nonfarm business 0.8 1.7 0.9 4.6 2.5 3.8

Manufacturing 0.1 -3.2 -3.2 5.5 3.4 5.4

 Durable 2.9 -2.3 -5.0 6.4 4.3 3.4 

 Nondurable -3.4 -3.9 -0.5 4.4 2.3 8.1 

Percent change from same quarter a year ago 

Business 4.0 3.4 -0.6 4.3 2.0 0.3

Nonfarm business 4.1 3.5 -0.6 4.2 1.9 0.1

Manufacturing 4.4 1.1 -3.1 5.0 2.7 0.6

 Durable 6.6 2.1 -4.3 5.5 3.2 -1.1 

 Nondurable 1.5 0.1 -1.4 4.4 2.1 2.9 

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 data 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). 

THIRD-TO-FOURTH QUARTER 2002 CHANGES 

Business 

Labor productivity in the business sector rose at a 0.3 percent annual rate in the fourth 

quarter of 2002, as output increased 1.8 percent and hours of all persons engaged in the sector 

increased 1.5 percent (table 1). The fourth-quarter increase in business sector hours followed six

consecutive quarterly declines. During third quarter 2002, productivity had increased 5.8 percent 

as output grew 5.3 percent and hours declined 0.5 percent. 

Hourly compensation grew at a 4.2-percent annual rate in the fourth quarter, compared 

with a 5.7-percent rise in the third quarter. This measure includes wages and salaries, 

supplements, employer contributions to employee-benefit plans, and taxes. Real hourly
3 

compensation, which takes into account changes in consumer prices, rose 2.2 percent in the 

fourth quarter of 2002 after increasing 3.5 percent one quarter earlier. 

Unit labor costs, which reflect changes in both hourly compensation and productivity, 

increased 3.9 percent during the fourth quarter of 2002, after being unchanged in the third 

quarter. The implicit price deflator for business output, which reflects changes in unit labor costs 

and unit nonlabor payments, increased 1.3 percent in the fourth quarter and 0.5 percent in the 

third quarter. 

Nonfarm business 

In the nonfarm business sector, productivity rose at an annual rate of 0.8 percent in the 

fourth quarter of 2002, as output grew 1.7 percent and hours of all persons—employees, 

proprietors, and unpaid family workers—rose 0.9 percent (seasonally adjusted annual rates). 

During the third quarter, productivity had increased 5.5 percent, output had increased 5.2 percent, 

and hours had declined 0.2 percent (table 2). 

Hourly compensation rose 4.6 percent in the fourth quarter, after rising 5.4 percent in the 

third quarter. When the increase in consumer prices was taken into account, real hourly

compensation rose 2.5 percent in the fourth quarter and 3.1 percent in the third quarter. 

Unit labor costs grew 3.8 percent in the fourth quarter, after edging down 0.1 percent in 

the third quarter. The implicit price deflator for nonfarm business increased 1.2 percent in the 

fourth quarter, as a 2.8 percent decline in unit nonlabor payments offset much of the increase in 

unit labor costs. 

Manufacturing 

Manufacturing productivity rose 0.1 percent in the fourth quarter of 2002, as both output 

and hours dropped by 3.2 percent (seasonally adjusted annual rates). In durable goods industries, 

productivity increased 2.9 percent when output fell 2.3 percent but hours fell faster, 5.0 percent. 

In nondurable goods industries, output per hour fell 3.4 percent, reflecting declines in output and 

hours of 3.9 percent and 0.5 percent, respectively. During the third quarter, productivity had 

increased 5.5 percent in total manufacturing, 7.9 percent in durable goods manufacturing, and 2.4 

percent in nondurable goods manufacturing (tables 3, 4, and 5). 

Hourly compensation of all manufacturing workers increased 5.5 percent during the 

fourth quarter, rising in both of the manufacturing subsectors—6.4 percent in durable goods and 

4.4 percent in nondurable goods. When the increase in consumer prices was taken into account, 

real hourly compensation for all manufacturing workers rose 3.4 percent in the fourth quarter. 

Unit labor costs in manufacturing grew 5.4 percent in the fourth quarter of 2002, the 

largest increase in this measure since the third quarter of 2000 (7.8 percent). Unit labor costs 

rose 3.4 percent in durable goods manufacturing and 8.1 percent in nondurable goods industries. 

Manufacturing unit labor costs had increased only 0.1 percent in the third quarter. 
4 

ANNUAL AVERAGE CHANGES, 2001-2002 

Business 

Business sector productivity increased 4.8 percent when the annual index for 2002 was 

compared with the annual index for 2001 (table B). This was the largest annual productivity gain 

since 1950, when business sector output per hour increased 8.5 percent. The 2001-2002 increase 

reflected a 2.7-percent increase in output combined with a 2.0-percent decline in hours. In 2001, 

output per hour had increased 1.1 percent, when output declined 0.2 percent and hours worked 

fell 1.3 percent. 

Table B. Productivity and costs: Revised 2002 annual averages 

(Seasonally adjusted annual rates) 

Sector 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

Percent change from previous year 

Business 4.8 2.7 -2.0 2.9 1.3 -1.7

Nonfarm business 4.8 2.7 -2.0 2.8 1.2 -1.9 

Manufacturing 4.5 -1.1 -5.4 3.8 2.1 -0.7

 Durable 5.6 -1.4 -6.7 4.1 2.5 -1.4 

 Nondurable 2.8 -0.7 -3.4 3.5 1.8 0.7 

Hourly compensation in the business sector increased 2.9 percent in both 2001 and 2002. 

Real hourly compensation increased more in 2002, 1.3 percent, than it had in 2001, 0.2 percent, 

because consumer prices rose less in 2002 than they had in 2001. 

Business sector unit labor costs decreased 1.7 percent in 2002. This was the largest 

annual decrease to date in this measure, which begins with data for 1948. Unit labor costs rose 

1.8 percent in 2001. The implicit price deflator rose 0.4 percent in 2002, compared with a 2.0-

percent increase in 2001. 

Nonfarm business

Productivity increased 4.8 percent in the nonfarm business sector during 2002, more than 

in any year since 1950, when output per hour grew 6.9 percent. Output grew 2.7 percent and 

hours of all persons fell 2.0 percent in 2002. The decline in hours was the largest since they fell 

2.4 percent in 1991. Nonfarm business productivity had increased 1.1 percent in 2001, when 

output edged down 0.1 percent and hours fell 1.2 percent. 
5 

Hourly compensation grew 2.8 percent in 2002, about the same as the 2.7-percent 

increase in 2001. Real hourly compensation increased 1.2 percent in 2002, following a 0.1-

percent decline in the previous year. 

Unit labor costs in the nonfarm business sector dropped 1.9 percent in 2002, the largest 

annual decline in this measure ever recorded. These costs had increased 1.6 percent during 2001. 

The implicit price deflator, which reflects nonlabor payments as well as labor costs, rose 0.5 

percent in 2002, following a 1.9-percent rise in 2001. 

Manufacturing 

Manufacturing productivity grew 4.5 percent in 2002, rebounding from a small increase 

in 2001 of 0.8 percent. Output fell 1.1 percent in 2002, and hours of all persons working in the 

sector dropped 5.4 percent. Labor productivity increased 5.6 percent in durable goods 

manufacturing, reflecting declines of 1.4 percent in output and 6.7 percent in hours. In

nondurable goods manufacturing, productivity rose 2.8 percent in 2002, output fell 0.7 percent, 

and hours declined 3.4 percent (tables B, 3, 4, and 5). 

Hourly compensation of manufacturing workers increased 3.8 percent in 2002, compared 

to a 1.5 percent increase one year earlier. Real hourly compensation rose 2.1 percent in 2002, 

after having declined 1.2 percent in 2001. Hourly compensation increased 4.1 percent in durable 

goods industries and 3.5 percent in nondurable goods industries in 2002. 

Unit labor costs declined 0.7 percent in manufacturing. In durable manufacturing, unit 

labor costs fell 1.4 percent in 2002. By contrast, unit labor costs in nondurable manufacturing

rose last year, by 0.7 percent. 

REVISED MEASURES

Productivity and cost data for the fourth quarter and full year 2002 for business, nonfarm 

business, and manufacturing were revised to incorporate the most recent information (table C). 

Quarterly measures of real hourly compensation in the business, nonfarm business, nonfinancial 

corporate, and manufacturing sectors for 2002 were revised to incorporate the annual 

recalculation of seasonal factors for the Consumer Price Index.

In the business and nonfarm business sectors, changes in productivity and output are 

greater—and increases in unit labor costs are smaller—than those reported on Feb. 6, based on 

information available at that time. Fourth-quarter measures of manufacturing productivity were 

revised down from those reported on Feb. 6, reflecting a larger decline in output than originally

reported. As a result, unit labor costs in manufacturing showed a larger increase than previously

reported. Annual measures of productivity and costs are similar to those reported on Feb. 6. 
6 

Table C. Previous and revised productivity and related measures: 

Fourth-quarter and annual averages 2002 

(Seasonally adjusted annual rates) 

Sector 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

Percent change, third to fourth quarter 2002 

Business:

Previous........................ -0.7 0.9 1.5 4.3 1.8 5.0

Current ......................... 0.3 1.8 1.5 4.2 2.2 3.9

Nonfarm business:

Previous........................ -0.2 0.8 1.0 4.6 2.2 4.8

Current ......................... 0.8 1.7 0.9 4.6 2.5 3.8

Manufacturing:

 Previous........................ 0.7 -2.4 -3.0 5.3 2.9 4.6 

 Current ......................... 0.1 -3.2 -3.2 5.5 3.4 5.4 

Percent change, 2001 - 2002 

Business:

 Previous........................ 4.7 2.6 -2.0 2.9 1.3 -1.7 

 Current ......................... 4.8 2.7 -2.0 2.9 1.3 -1.7 

Nonfarm business:

 Previous........................ 4.7 2.7 -2.0 2.8 1.2 -1.8 

 Current ......................... 4.8 2.7 -2.0 2.8 1.2 -1.9 

Manufacturing:

 Previous........................ 4.6 -1.0 -5.4 3.8 2.1 -0.7 

 Current ......................... 4.5 -1.1 -5.4 3.8 2.1 -0.7 

Next release date 

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

May 1, 2003, and will present preliminary first-quarter measures for business, nonfarm business, 

and manufacturing. Fourth-quarter and annual data for nonfinancial corporations will be released 

at that time. 

Upcoming change to productivity and cost data 

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. 
7 

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 

 2000 I 115.3 138.4 120.1 131.4 110.5 114.0 110.7 112.8 

 II 117.2 140.3 119.7 132.4 110.5 113.0 114.1 113.4 

 III 117.3 140.4 119.7 135.0 111.7 115.1 111.2 113.7 

 IV 117.9 140.7 119.4 136.3 111.9 115.6 112.0 114.3 

 ANNUAL 116.9 140.0 119.7 133.8 111.2 114.4 112.0 113.5 

 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 117.9 139.1 117.9 137.8 111.1 116.8 115.5 116.4 

 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 122.5 142.3 116.1 139.3 112.0 113.7 119.9 116.0 

 II 123.1 142.5 115.8 140.8 r112.3 114.4 119.3 116.2 

 III 124.8 144.4 115.6 142.7 r113.2 114.3 119.7 116.3 

 IV r124.9 r145.0 116.1 144.2 113.8 r115.4 r118.9 116.7 

 ANNUAL 123.8 143.5 115.9 141.8 112.8 114.5 r119.5 116.3 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 0.3 2.2 1.9 14.7 10.3 14.4 -15.1 2.4 

 II 6.7 5.4 -1.2 3.0 0.1 -3.5 12.9 2.2 

 III 0.4 0.4 0.0 8.3 4.6 7.8 -9.6 1.1 

 IV 2.1 0.9 -1.2 3.7 0.7 1.6 2.6 1.9 

 ANNUAL 3.0 4.1 1.0 6.8 3.4 3.7 -1.7 1.7 

 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 -2.6 0.7 4.9 2.2 

 III 1.8 -0.9 -2.6 0.9 0.2 -0.9 6.8 1.8 

 IV 7.6 3.5 -3.8 1.4 1.7 -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 r1.7 -4.9 9.5 0.3 

 II 1.8 0.6 -1.2 4.3 0.8 2.4 -2.1 0.7 

 III 5.8 5.3 -0.5 5.7 r3.5 0.0 1.3 0.5 

 IV r0.3 r1.8 1.5 r4.2 r2.2 r3.9 r-2.8 r1.3 

 ANNUAL r4.8 r2.7 -2.0 2.9 1.3 -1.7 r4.2 0.4 

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

 Percent change from corresponding quarter of previous year 

 2000 I 2.3 4.6 2.3 5.9 2.5 3.5 -2.0 1.4 

 II 4.1 5.4 1.3 6.5 3.1 2.3 0.8 1.7 

 III 3.3 4.1 0.7 7.7 4.1 4.3 -2.5 1.7 

 IV 2.4 2.2 -0.1 7.3 3.8 4.9 -2.9 1.9 

 ANNUAL 3.0 4.1 1.0 6.8 3.4 3.7 -1.7 1.7 

 2001 I 1.9 1.4 -0.5 4.5 1.2 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 3.6 r1.9 -2.1 3.6 0.0 

 IV r4.0 r3.4 -0.6 4.3 2.0 r0.3 r1.4 0.7 

 ANNUAL r4.8 r2.7 -2.0 2.9 1.3 -1.7 r4.2 0.4 

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

 See footnotes following Table 6. March 6, 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 

 2000 I 114.7 138.7 120.9 130.8 110.0 114.0 112.3 113.4 

 II 116.4 140.5 120.7 131.5 109.8 113.0 115.6 113.9 

 III 116.6 140.6 120.6 134.3 111.1 115.2 112.8 114.3 

 IV 117.1 141.0 120.4 135.3 111.2 115.6 113.4 114.8 

 ANNUAL 116.2 140.2 120.6 133.0 110.6 114.4 113.5 114.1 

 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 117.2 139.4 118.9 136.7 110.2 116.6 117.2 116.8 

 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 122.3 142.9 116.8 139.5 111.2 114.1 121.7 116.8 

 III 123.9 144.7 116.8 141.3 r112.1 114.0 121.8 116.9 

 IV r124.2 r145.3 117.0 142.9 112.8 r115.1 r121.0 r117.2 

 ANNUAL r123.1 r143.9 116.9 140.5 111.8 r114.1 r121.6 r116.8 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 0.2 1.9 1.7 15.2 10.7 14.9 -15.3 2.7 

 II 6.0 5.4 -0.6 2.2 -0.7 -3.6 12.2 1.9 

 III 0.6 0.2 -0.4 8.7 4.9 8.0 -9.1 1.4 

 IV 1.7 1.1 -0.6 3.1 0.2 1.4 2.1 1.6 

 ANNUAL 2.9 4.0 1.0 7.0 3.5 3.9 -1.7 1.8 

 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 -2.9 0.3 5.1 2.0 

 III 2.1 -0.8 -2.9 1.0 0.3 -1.1 6.8 1.7 

 IV 7.2 2.9 -4.0 1.5 1.8 -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 r1.6 -5.3 8.8 -0.2 

 II 1.7 0.9 -0.7 4.0 r0.4 2.3 0.1 1.4 

 III 5.5 5.2 -0.2 5.4 r3.1 -0.1 0.4 0.1 

 IV r0.8 r1.7 r0.9 4.6 r2.5 r3.8 r-2.8 r1.2 

 ANNUAL r4.8 2.7 -2.0 2.8 1.2 r-1.9 r4.5 0.5 

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

 Percent change from corresponding quarter of previous year 

 2000 I 2.3 4.5 2.1 6.2 2.8 3.7 -1.8 1.7 

 II 4.0 5.4 1.3 6.6 3.2 2.5 0.7 1.8 

 III 3.3 3.9 0.7 7.9 4.3 4.5 -2.6 1.8 

 IV 2.1 2.2 0.0 7.2 3.7 4.9 -3.1 1.9 

 ANNUAL 2.9 4.0 1.0 7.0 3.5 3.9 -1.7 1.8 

 2001 I 1.7 1.4 -0.3 4.2 0.9 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 -0.8 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 r0.2 -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 3.4 r1.7 -2.2 4.0 0.1 

 IV r4.1 r3.5 -0.6 4.2 1.9 r0.1 r1.5 r0.6 

 ANNUAL r4.8 2.7 -2.0 2.8 1.2 r-1.9 r4.5 0.5 

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

 See footnotes following Table 6. March 6, 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 

 2000 I 133.6 138.3 103.5 131.4 110.5 98.4 

 II 134.9 139.8 103.6 129.3 107.9 95.9 

 III 135.4 139.3 102.9 132.2 109.4 97.7 

 IV 135.9 137.6 101.3 131.5 108.0 96.7 

 ANNUAL 134.9 138.7 102.8 131.1 109.0 97.2 

 2001 I 135.2 134.9 99.8 132.0 107.4 97.6 

 II 135.2 132.8 98.2 133.0 107.4 98.4 

 III 136.2 131.1 96.3 133.3 107.5 97.9 

 IV 137.5 129.1 93.9 134.3 108.3 97.7 

 ANNUAL 136.0 132.0 97.1 133.1 107.7 97.9 

 2002 I 140.1 129.5 92.4 135.6 109.0 96.8 

 II 141.5 130.6 92.3 137.2 109.4 96.9 

 III 143.4 131.6 91.7 139.1 r110.3 97.0 

 IV r143.5 r130.5 91.0 140.9 111.2 r98.2 

 ANNUAL r142.1 r130.5 r91.8 138.2 110.0 97.2 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 4.5 2.7 -1.7 25.3 20.5 19.9 

 II 3.8 4.4 0.5 -6.3 -9.0 -9.7 

 III 1.6 -1.3 -2.8 9.5 5.8 7.8 

 IV 1.6 -4.8 -6.3 -2.3 -5.1 -3.8 

 ANNUAL 4.1 2.5 -1.5 7.4 3.9 3.2 

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

 II 0.0 -6.2 -6.2 3.1 -0.1 3.1 

 III 3.0 -4.9 -7.6 1.0 0.3 -1.9 

 IV 3.9 -6.1 -9.7 2.9 3.2 -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 r2.5 -3.7 

 II 4.2 3.5 -0.7 5.0 r1.4 0.7 

 III 5.5 3.0 -2.4 5.6 r3.4 0.1 

 IV r0.1 r-3.2 r-3.2 r5.5 r3.4 r5.4 

 ANNUAL r4.5 r-1.1 -5.4 3.8 2.1 -0.7 

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

 Percent change from corresponding quarter of previous year 

 2000 I 4.4 3.6 -0.8 8.9 5.5 4.3 

 II 4.7 3.8 -0.8 6.9 3.5 2.1 

 III 4.3 2.6 -1.7 7.9 4.3 3.4 

 IV 2.9 0.2 -2.6 5.9 2.4 2.9 

 ANNUAL 4.1 2.5 -1.5 7.4 3.9 3.2 

 2001 I 1.2 -2.4 -3.6 0.5 -2.7 -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 r1.5 -0.9 

 II 4.7 -1.7 -6.1 3.2 r1.9 -1.5 

 III 5.3 0.3 -4.8 4.3 r2.6 -1.0 

 IV r4.4 r1.1 -3.1 r5.0 r2.7 r0.6 

 ANNUAL r4.5 r-1.1 -5.4 3.8 2.1 -0.7 

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

 See footnotes following Table 6. March 6, 2003 

 r=revised Source: Bureau of Labor Statistics 

_ 
12 

 

 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 

 2000 I 148.6 162.9 109.7 130.8 109.9 88.0 

 II 150.0 165.2 110.2 127.5 106.4 85.0 

 III 150.3 164.6 109.5 130.6 108.0 86.9 

 IV 150.1 162.0 107.9 128.4 105.5 85.5 

 ANNUAL 149.7 163.7 109.3 129.3 107.5 86.4 

 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 149.6 151.8 101.4 130.2 105.0 87.0 

 IV 151.0 148.6 98.5 131.8 106.3 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 95.5 136.9 108.6 85.6 

 IV r161.0 r151.7 r94.2 r139.0 r109.7 r86.3 

 ANNUAL 158.1 r151.2 95.7 135.8 108.1 85.9 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 7.6 6.3 -1.2 29.7 24.6 20.5 

 II 3.9 5.8 1.8 -9.6 -12.1 -13.0 

 III 0.8 -1.6 -2.3 9.9 6.1 9.1 

 IV -0.6 -6.2 -5.7 -6.5 -9.2 -6.0 

 ANNUAL 4.4 3.6 -0.7 7.7 4.2 3.2 

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

 II -1.4 -8.2 -6.9 3.6 0.4 5.1 

 III 2.4 -7.9 -10.0 -1.0 -1.7 -3.3 

 IV 3.5 -8.0 -11.2 5.0 5.4 1.5 

 ANNUAL -0.1 -6.3 -6.2 0.9 -1.9 0.9 

 2002 I 10.4 2.1 -7.5 2.8 r1.5 -6.9 

 II 5.5 4.9 -0.5 6.7 3.1 1.1 

 III 7.9 3.8 -3.8 6.1 r3.9 -1.7 

 IV r2.9 r-2.3 r-5.0 r6.4 r4.3 r3.4 

 ANNUAL r5.6 -1.4 r-6.7 4.1 2.5 r-1.4 

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

 Percent change from corresponding quarter of previous year 

 2000 I 5.2 5.1 -0.1 10.5 7.0 5.0 

 II 5.1 5.3 0.2 7.4 4.0 2.2 

 III 4.3 3.2 -1.1 8.1 4.5 3.6 

 IV 2.9 1.0 -1.9 4.8 1.4 1.8 

 ANNUAL 4.4 3.6 -0.7 7.7 4.2 3.2 

 2001 I 0.5 -2.9 -3.3 -1.1 -4.2 -1.6 

 II -0.8 -6.3 -5.5 2.3 -1.0 3.2 

 III -0.4 -7.8 -7.4 -0.3 -2.8 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 r1.4 -1.0 

 II 5.4 -2.4 -7.4 3.3 2.0 -2.0 

 III 6.8 0.5 -5.9 5.1 r3.4 -1.6 

 IV r6.6 r2.1 r-4.3 r5.5 r3.2 r-1.1 

 ANNUAL r5.6 -1.4 r-6.7 4.1 2.5 r-1.4 

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

 See footnotes following Table 6. March 6, 2003 

 r=revised Source: Bureau of Labor Statistics 

_ 
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 

 2000 I 120.6 114.9 95.3 130.6 109.8 108.3 

 II 121.8 115.6 95.0 130.4 108.9 107.1 

 III 122.6 115.4 94.1 133.2 110.2 108.7 

 IV 123.9 114.5 92.4 135.0 110.9 108.9 

 ANNUAL 122.2 115.1 94.2 132.3 110.0 108.3 

 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 89.5 137.2 110.6 110.3 

 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 r111.9 109.7 

 II 127.7 110.8 86.7 139.8 111.5 109.5 

 III 128.4 111.4 86.7 141.5 112.3 110.2 

 IV r127.3 r110.3 86.6 r143.1 r112.9 r112.4 

 ANNUAL 127.6 110.7 r86.7 r140.9 112.1 r110.4 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 0.8 -1.8 -2.5 17.8 13.3 17.0 

 II 3.8 2.4 -1.4 -0.5 -3.4 -4.2 

 III 2.6 -0.9 -3.5 8.7 4.9 5.9 

 IV 4.6 -3.0 -7.2 5.6 2.5 0.9 

 ANNUAL 3.8 1.1 -2.6 6.7 3.3 2.9 

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

 II 1.3 -3.8 -5.0 2.3 -0.8 0.9 

 III 2.6 -1.4 -3.8 5.1 4.4 2.4 

 IV 3.6 -4.0 -7.4 -0.3 0.0 -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 r4.6 1.6 

 II 2.9 1.9 -0.9 2.2 r-1.3 -0.7 

 III 2.4 2.3 -0.1 5.0 r2.8 2.6 

 IV r-3.4 r-3.9 r-0.5 r4.4 r2.3 r8.1 

 ANNUAL 2.8 r-0.7 -3.4 3.5 1.8 r0.7 

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

 Percent change from corresponding quarter of previous year 

 2000 I 3.4 1.6 -1.8 6.1 2.8 2.6 

 II 4.4 1.8 -2.5 5.8 2.5 1.4 

 III 4.4 1.7 -2.5 7.4 3.8 2.9 

 IV 2.9 -0.8 -3.7 7.7 4.2 4.6 

 ANNUAL 3.8 1.1 -2.6 6.7 3.3 2.9 

 2001 I 2.1 -1.9 -3.9 3.1 -0.1 1.0 

 II 1.5 -3.4 -4.8 3.9 0.5 2.4 

 III 1.5 -3.5 -4.9 3.0 0.4 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 3.2 r1.5 -0.1 

 IV r1.5 r0.1 r-1.4 4.4 r2.1 r2.9 

 ANNUAL 2.8 r-0.7 -3.4 3.5 1.8 r0.7 

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

 See footnotes following Table 6. March 6, 2003 

 r=revised Source: Bureau of Labor Statistics 

_ 
14 

 

 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) 

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

 Indexes 1992=100 

 2000 I 117.7 147.3 125.1 126.9 106.7 107.8 104.5 106.9 119.5 108.0 

 II 118.3 147.9 125.0 127.8 106.6 108.0 106.3 107.5 118.8 108.5 

 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 120.4 147.7 122.7 132.7 107.0 110.3 115.5 111.7 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 r108.4 107.9 114.0 109.5 107.6 109.4 

 II 126.7 152.8 120.6 136.2 108.6 107.5 114.5 109.4 107.8 109.3 

 III 128.4 154.2 120.1 138.2 r109.6 107.7 114.8 109.6 104.1 109.1 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 7.1 9.5 2.3 14.2 9.8 6.7 -0.4 4.7 -19.0 2.2 

 II 2.0 1.6 -0.4 2.8 -0.1 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 1.1 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 -1.3 -0.4 7.1 1.6 10.0 2.2 

 III 3.2 -0.3 -3.4 2.5 1.9 -0.6 7.2 1.5 10.8 2.2 

 IV 10.7 5.4 -4.8 2.6 2.9 -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 r2.2 -1.2 -0.2 -0.9 -0.2 -0.8 

 II 5.8 5.3 -0.5 4.5 r0.9 -1.3 1.7 -0.5 0.9 -0.3 

 III 5.5 3.8 -1.6 6.1 r3.9 0.6 1.0 0.7 -13.0 -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 0.2 2.6 6.7 3.7 -22.0 1.3 

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

 III 0.7 -1.1 -1.8 1.8 -0.8 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 r2.0 -2.6 0.9 -1.7 13.0 -0.6 

 III 6.7 4.4 -2.1 4.2 2.5 -2.3 -0.6 -1.9 6.4 -1.3 

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

 See footnotes following Table 6. March 6, 2003 

 r=revised Source: Bureau of Labor Statistics 
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 +1.7 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 third 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 1978-2001 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.