Internet address: http://www.bls.gov/lpc/ USDL 03-466 

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, SEPTEMBER 4, 2003. 

PRODUCTIVITY AND COSTS 

Second Quarter 2003 

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

productivity data—as measured by output per hour of all persons—for the second quarter of 

2003. The seasonally adjusted annual rates of productivity change in the second quarter were: 

7.2 percent in the business sector and 

6.8 percent in the nonfarm business sector. 

In both sectors, increases in productivity were larger than reported on Aug. 7, due primarily to 

upward revisions to output. (See table C.) 

 In manufacturing, the revised productivity changes in the second quarter were: 

 3.7 percent in manufacturing, 

3.5 percent in durable goods manufacturing, and 

 3.4 percent in nondurable goods manufacturing. 

 In total manufacturing, the change in productivity was revised down from a preliminary 

estimate of 4.2 percent. 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 

more aggregate business and nonfarm business sectors. Second-quarter measures are 

summarized in table A and appear in detail in tables 1 through 5; the differences between these 

measures and the preliminary second-quarter figures issued on Aug. 7 are shown in table C. 

 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: Revised second-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 7.2 4.2 -2.7 4.3 3.7 -2.7

Nonfarm business 6.8 4.4 -2.3 3.8 3.2 -2.8

Manufacturing 3.7 -2.4 -5.9 5.2 4.6 1.5

 Durable 3.5 -3.3 -6.5 4.9 4.3 1.4 

 Nondurable 3.4 -1.7 -4.9 5.9 5.3 2.4 

Percent change from same quarter a year ago 

Business 4.3 3.2 -1.1 3.2 1.0 -1.1

Nonfarm business 4.1 3.2 -0.9 2.9 0.7 -1.2

Manufacturing 3.5 -1.0 -4.3 4.3 2.1 0.8

 Durable 4.2 -0.8 -4.7 3.9 1.7 -0.2 

 Nondurable 2.5 -1.2 -3.6 5.0 2.8 2.5 

Business 

From the first quarter to the second quarter of 2003, productivity in the business sector 

grew at a 7.2 percent annual rate, as output increased 4.2 percent and hours worked by all persons 

engaged in the sector fell 2.7 percent (tables A and 1). In the first quarter of 2003, productivity

increased 2.7 percent, as output rose 1.4 percent and hours declined 1.2 percent. 

Hourly compensation in the business sector increased 4.3 percent in the second quarter of 

2003 after increasing 4.8 percent one quarter earlier (seasonally adjusted annual rates). Hourly

compensation includes wages and salaries, supplements, employer contributions to employee 

benefit plans, and taxes. Real hourly compensation, which takes into account changes in 

consumer prices, increased 3.7 percent in the second quarter of 2003, after rising 0.9 percent in 

the first quarter. 

Changes in unit labor costs reflect changes in both hourly compensation and productivity. 

Unit labor costs decreased 2.7 percent in the second quarter of 2003, after increasing 2.0 percent 

in the first quarter (seasonally adjusted annual rates). The implicit price deflator for the business 

sector rose 0.8 percent in the second quarter, as a 6.6 percent increase in unit nonlabor payments 

was partially offset by a decline in unit labor costs. 

 
3 

Nonfarm business 

Productivity in the nonfarm business sector grew at a 6.8 percent annual rate in the 

second quarter of 2003, as output grew 4.4 percent and hours of all persons fell 2.3 percent 

(table A). In the first quarter of 2003, output per hour in the nonfarm business sector increased 

2.1 percent, as output rose 1.4 percent and hours declined 0.7 percent (table 2). 

Hourly compensation rose 3.8 percent in the second quarter of 2003, following a 4.1 

percent advance in the first quarter. When the rise in consumer prices was taken into account, 

real hourly compensation increased 3.2 percent in the second quarter of 2003. This was the 

largest gain in real hourly compensation since the third quarter of 2000, when it grew 5.0 percent. 

Unit labor costs decreased 2.8 percent in the second quarter of 2003. This measure 

increased 2.0 percent in the first quarter. Unit nonlabor payments grew 6.3 percent, and the 

implicit price deflator for nonfarm business output rose 0.6 percent in the second quarter of 2003 

(seasonally adjusted annual rates). 

Manufacturing

In the second quarter of 2003, productivity increased 3.7 percent in manufacturing, as 

output declined 2.4 percent and hours of all persons fell 5.9 percent (seasonally adjusted annual 

rates). In the durable goods sector, productivity grew 3.5 percent in the second quarter of 2003, 

as output fell 3.3 percent and hours dropped by 6.5 percent. In nondurable goods, output per 

hour rose 3.4 percent, as output decreased 1.7 percent and hours dropped 4.9 percent (tables 3, 4, 

and 5). 

The hourly compensation of all manufacturing workers increased 5.2 percent during the 

second quarter of 2003, reflecting a 4.9-percent rise in hourly compensation in durable goods 

industries and a 5.9-percent increase in the nondurable goods sector. Real hourly compensation 

in the total manufacturing sector advanced 4.6 percent in the second quarter, after increasing 2.4 

percent one quarter earlier. 

Unit labor costs in manufacturing rose 1.5 percent in the second quarter of 2003, 

compared with a 2.2 percent increase in the first quarter. Unit labor costs rose 1.4 percent in 

durable goods and 2.4 percent in nondurable goods in the second quarter of 2003. 

Nonfinancial corporations

Preliminary second-quarter 2003 measures of productivity and costs also were reported 

today for nonfinancial corporations (tables B and 6). Productivity increased 8.1 percent during

the second quarter, as output increased 5.9 percent and hours declined 2.0 percent (seasonally

adjusted annual rates). In the first quarter of 2003, output per hour increased 4.3 percent, as 

output rose 2.8 percent and hours of all employees fell 1.5 percent. Nonfinancial corporations 

include 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: Preliminary second-quarter 2003 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 

2003 II 8.1 5.9 -2.0 3.9 3.3 -3.8 55.5 -0.7 

Percent change from same quarter a year ago 

2003 II 4.8 3.3 -1.5 3.6 1.5 -1.1 16.2 0.1 

Hourly compensation rose 3.9 percent in the second quarter of 2003, following a 5.2 

percent gain in the first quarter. When the rise in consumer prices is taken into account, real 

hourly compensation increased 3.3 percent in the second quarter and 1.3 percent in the first 

quarter of 2003 (table 6). 

Unit labor costs for nonfinancial corporations decreased 3.8 percent in the second quarter 

of 2003, compared with a 0.9-percent increase in the first quarter of the year. Unit profits grew at 

a 55.5 percent annual rate in the second quarter of 2003, after rising 7.6 percent in the first 

quarter. The implicit price deflator for nonfinancial corporate output declined 0.7 percent in the 

second quarter of 2003. 

 
5 

Revised Measures 

Current and previous measures for the second quarter of 2003 for the business, nonfarm 

business, and manufacturing sectors are compared in table C. The quarterly movements differ 

from those reported on Aug. 7 based on information then available. Ratios of hours worked to 

hours paid for the second quarter of 2003, derived from the National Compensation Survey, were 

incorporated into the current measures. 

Table C. 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 

Second quarter 2003 

Business:

 Previous........................ 6.1 3.2 -2.7 3.9 3.3 -2.0 

 Current ......................... 7.2 4.2 -2.7 4.3 3.7 -2.7 

Nonfarm business:

 Previous........................ 5.7 3.4 -2.2 3.5 2.9 -2.1 

 Current ......................... 6.8 4.4 -2.3 3.8 3.2 -2.8 

Manufacturing:

 Previous........................ 4.2 -2.1 -6.1 5.4 4.8 1.2 

 Current ......................... 3.7 -2.4 -5.9 5.2 4.6 1.5 

In the business and nonfarm business sectors, output and productivity were revised up, 

and unit labor costs were revised down. In the manufacturing sector, productivity was revised 

down due to the combination of a larger decline in output and a smaller decline in hours. 

Because productivity was revised down more than hourly compensation, unit labor costs in 

manufacturing rose more than reported on Aug. 7. 

Corrected Measures 

In the Productivity and Costs news release of August 7, 2003, data for manufacturing,

durable manufacturing, nondurable manufacturing, and nonfinancial corporations for the fourth 

quarter in 2002, the annual average for 2002, and the first quarter in 2003 were incorrect. 

Previously published and corrected data are displayed in table D for the manufacturing sector and 

in table E for the nonfinancial corporate sector. Tables 3-6 contain the correct data for all four 

sectors. 

 
6 

Table D. Manufacturing industries: Published and corrected productivity and related measures 

Quarterly percent changes at seasonally adjusted annual rates 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

First quarter 2003 

 Published...................... 4.9 -0.7 -5.3 7.3 3.3 2.2 

 Corrected...................... 4.0 -0.7 -4.5 6.3 2.4 2.2 

Fourth quarter 2002 

 Published...................... 3.6 -3.7 -7.1 7.4 5.3 3.6 

 Corrected...................... -0.4 -3.7 -3.3 3.1 1.1 3.5 

 Annual average 2002 

 Published...................... 6.4 -1.1 -7.0 5.0 3.4 -1.3 

 Corrected...................... 6.1 -1.1 -6.8 4.7 3.1 -1.3 

Table E. Nonfinancial corporations: Published and corrected 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

First quarter 2003 

Published.......... 4.5 2.8 -1.6 5.4 1.5 0.9 7.6 0.7

Corrected.......... 4.3 2.8 -1.5 5.2 1.3 0.9 7.6 0.7

Fourth quarter 2002 

Published.......... 3.6 2.8 -0.8 2.6 0.6 -1.0 22.8 0.9

Corrected.......... 3.8 2.8 -1.0 2.8 0.8 -1.0 22.8 0.9

Annual average 2002 

Published.......... 5.8 3.1 -2.5 3.5 1.8 -2.2 9.1 -0.5

Corrected.......... 5.8 3.1 -2.5 3.5 1.9 -2.2 9.1 -0.5

 
7 

Upcoming changes

Historical measures of output and compensation for all sectors, along with the conversion 

of the manufacturing and nonfinancial corporate sectors from the 1987 Standard Industrial 

Classification (SIC) to the 2002 North American Industry Classification System (NAICS), will 

be prepared following the release of the revised national income and product accounts in 

December. On Jan. 7, 2004, the BLS will post revised productivity and cost measures through 

the fourth quarter of 2002 on its web site. More specific information will be announced later this 

year. 

Next release date 

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

Nov. 6, 2003. Preliminary third-quarter measures for business, nonfarm business, and 

manufacturing will be released at that time. 

 
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 were adjusted to hours at work 

using the BLS Hours at Work survey, conducted 

for this purpose. Data from the National 

Compensation Survey are used for recent years. 

Data from the BLS Current Population 

Survey (CPS) are used for farm labor, nonfarm 

proprietors, and nonfarm unpaid family workers. 

Estimates of labor input for government 

enterprises are derived from the CPS, the CES, and 

the National Income and Product Accounts (NIPA) 

prepared by the Bureau of Economic Analysis

(BEA) of the Department of Commerce. 

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 117.4 140.4 119.6 137.4 111.9 117.1 112.0 115.2 

 II 117.8 139.4 118.3 138.2 111.6 117.3 113.3 115.8 

 III 118.8 139.1 117.1 139.1 112.1 117.1 115.1 116.4 

 IV 121.3 140.3 115.6 139.8 112.8 115.2 117.0 115.9 

 ANNUAL 118.8 139.8 117.6 138.6 112.1 116.7 114.3 115.8 

 2002 I 123.9 142.3 114.9 141.0 113.4 113.8 119.7 116.0 

 II 124.1 142.5 114.8 142.4 113.5 114.7 118.8 116.2 

 III 125.9 144.4 114.6 143.1 113.5 113.6 120.9 116.3 

 IV 126.4 145.0 114.7 143.7 113.4 113.7 122.1 116.8 

 ANNUAL 125.1 143.5 114.7 142.5 113.5 113.9 120.4 116.3 

 2003 I 127.2 145.5 114.3 145.4 113.7 114.2 122.3 117.2 

 II r129.5 r147.0 r113.5 r146.9 r114.7 r113.5 r124.3 r117.4 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I -0.5 -1.0 -0.5 4.6 0.8 5.1 0.3 3.4 

 II 1.5 -2.8 -4.3 2.3 -0.9 0.8 4.6 2.2 

 III 3.3 -0.9 -4.1 2.5 1.6 -0.8 6.8 1.8 

 IV 8.7 3.5 -4.8 2.1 2.7 -6.1 6.7 -1.6 

 ANNUAL 2.0 -0.2 -2.1 3.8 1.0 1.8 2.3 2.0 

 2002 I 8.7 5.9 -2.6 3.5 2.2 -4.8 9.6 0.3 

 II 0.8 0.6 -0.2 4.0 0.4 3.1 -3.2 0.7 

 III 5.9 5.3 -0.6 2.1 0.0 -3.6 7.6 0.5 

 IV 1.5 1.7 0.2 1.6 -0.4 0.1 3.8 1.5 

 ANNUAL 5.3 2.7 -2.5 2.8 1.2 -2.3 5.3 0.4 

 2003 I 2.7 1.4 -1.2 4.8 0.9 2.0 0.8 1.6 

 II r7.2 r4.2 -2.7 r4.3 r3.7 r-2.7 r6.6 r0.8 

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

 Percent change from corresponding quarter of previous year 

 2001 I 2.2 1.4 -0.8 4.9 1.4 2.6 1.4 2.2 

 II 1.1 -0.7 -1.7 4.8 1.4 3.7 -0.5 2.1 

 III 1.7 -1.0 -2.6 3.3 0.6 1.6 3.7 2.3 

 IV 3.2 -0.3 -3.4 2.9 1.0 -0.3 4.6 1.4 

 ANNUAL 2.0 -0.2 -2.1 3.8 1.0 1.8 2.3 2.0 

 2002 I 5.5 1.4 -3.9 2.6 1.4 -2.8 6.9 0.7 

 II 5.4 2.3 -2.9 3.0 1.7 -2.2 4.9 0.3 

 III 6.0 3.8 -2.1 2.9 1.3 -2.9 5.0 0.0 

 IV 4.2 3.4 -0.8 2.8 0.5 -1.4 4.3 0.7 

 ANNUAL 5.3 2.7 -2.5 2.8 1.2 -2.3 5.3 0.4 

 2003 I 2.7 2.2 -0.5 3.1 0.2 0.4 2.2 1.1 

 II r4.3 r3.2 -1.1 r3.2 r1.0 r-1.1 r4.6 1.1 

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

 See footnotes following Table 6. September 4, 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 116.9 140.7 120.3 136.7 111.3 117.0 113.5 115.7 

 II 117.4 139.7 119.0 137.4 111.0 117.1 114.9 116.3 

 III 118.3 139.4 117.8 138.2 111.4 116.8 116.8 116.8 

 IV 120.7 140.4 116.3 138.9 112.1 115.1 119.0 116.5 

 ANNUAL 118.3 140.1 118.4 137.8 111.4 116.5 116.1 116.3 

 2002 I 123.4 142.5 115.5 140.2 112.8 113.6 121.5 116.4 

 II 123.7 142.9 115.5 141.5 112.9 114.4 121.2 116.8 

 III 125.5 144.7 115.3 142.2 112.8 113.3 123.1 116.9 

 IV 126.0 145.3 115.3 142.8 112.7 113.3 124.3 117.3 

 ANNUAL 124.7 143.9 115.4 141.7 112.8 113.6 122.5 116.9 

 2003 I 126.7 145.8 115.1 144.2 112.8 113.8 124.5 117.7 

 II r128.8 r147.4 114.4 r145.6 r113.7 r113.0 r126.4 117.9 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I -0.4 -0.9 -0.5 4.3 0.5 4.7 0.8 3.3 

 II 1.6 -2.7 -4.3 2.0 -1.2 0.3 5.0 2.0 

 III 3.4 -0.8 -4.1 2.4 1.5 -0.9 6.6 1.7 

 IV 8.3 2.9 -5.0 2.1 2.7 -5.7 7.7 -1.0 

 ANNUAL 1.9 -0.1 -2.0 3.6 0.8 1.7 2.4 1.9 

 2002 I 9.3 6.2 -2.9 3.7 2.4 -5.2 8.7 -0.2 

 II 1.0 0.9 0.0 3.9 0.3 2.9 -0.9 1.4 

 III 5.9 5.2 -0.6 2.0 -0.2 -3.7 6.6 0.1 

 IV 1.7 1.7 0.0 1.6 -0.4 -0.1 3.9 1.4 

 ANNUAL 5.4 2.7 -2.5 2.8 1.2 -2.4 5.6 0.5 

 2003 I 2.1 1.4 -0.7 4.1 0.2 2.0 0.4 1.4 

 II r6.8 r4.4 r-2.3 r3.8 r3.2 r-2.8 r6.3 r0.6 

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

 Percent change from corresponding quarter of previous year 

 2001 I 2.0 1.4 -0.6 4.5 1.1 2.5 1.4 2.1 

 II 1.1 -0.6 -1.6 4.6 1.1 3.5 -0.3 2.1 

 III 1.7 -0.8 -2.5 3.0 0.3 1.3 3.7 2.2 

 IV 3.2 -0.4 -3.5 2.7 0.9 -0.5 5.0 1.5 

 ANNUAL 1.9 -0.1 -2.0 3.6 0.8 1.7 2.4 1.9 

 2002 I 5.6 1.3 -4.0 2.5 1.3 -2.9 7.0 0.6 

 II 5.4 2.3 -3.0 3.0 1.7 -2.3 5.4 0.5 

 III 6.1 3.8 -2.1 2.9 1.3 -3.0 5.4 0.1 

 IV 4.4 3.5 -0.9 2.8 0.5 -1.6 4.5 0.7 

 ANNUAL 5.4 2.7 -2.5 2.8 1.2 -2.4 5.6 0.5 

 2003 I 2.6 2.3 -0.3 2.9 0.0 0.2 2.5 1.1 

 II r4.1 r3.2 -0.9 r2.9 r0.7 r-1.2 r4.3 0.9 

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

 See footnotes following Table 6. September 4, 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 99.8 132.0 107.5 97.6 

 II 135.8 132.8 97.8 133.6 107.9 98.4 

 III 137.8 131.1 95.1 135.0 108.8 97.9 

 IV 139.9 129.1 92.3 136.7 110.3 97.7 

 ANNUAL 137.1 132.0 96.3 134.3 108.6 97.9 

 2002 I 142.9 129.5 90.6 138.3 111.3 96.8 

 II 144.8 130.6 90.2 140.5 112.0 97.0 

 III 147.2 131.6 89.4 141.3 112.1 96.0 

 IV r147.0 130.3 r88.6 r142.4 r112.4 96.9 

 ANNUAL r145.5 130.5 r89.7 r140.6 r112.0 96.7 

 2003 I r148.5 130.1 r87.6 r144.6 r113.1 97.4 

 II r149.8 r129.3 r86.3 r146.5 r114.4 97.7 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.1 -7.6 -5.7 1.6 -2.1 3.7 

 II 1.8 -6.2 -7.9 5.0 1.7 3.1 

 III 6.1 -4.9 -10.3 4.1 3.2 -1.8 

 IV 6.0 -6.1 -11.5 5.1 5.7 -0.9 

 ANNUAL 1.6 -4.9 -6.4 2.4 -0.4 0.8 

 2002 I 9.1 1.2 -7.2 5.0 3.7 -3.8 

 II 5.5 3.5 -1.9 6.3 2.7 0.8 

 III 6.7 3.0 -3.4 2.5 0.3 -3.9 

 IV r-0.4 -3.7 r-3.3 r3.1 r1.1 r3.5 

 ANNUAL r6.1 -1.1 r-6.8 r4.7 r3.1 -1.3 

 2003 I r4.0 -0.7 r-4.5 r6.3 r2.4 2.2 

 II r3.7 r-2.4 r-5.9 r5.2 r4.6 r1.5 

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

 Percent change from corresponding quarter of previous year 

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

 II 0.7 -5.0 -5.7 3.4 0.0 2.7 

 III 1.8 -5.9 -7.5 2.1 -0.6 0.3 

 IV 2.9 -6.2 -8.9 3.9 2.1 1.0 

 ANNUAL 1.6 -4.9 -6.4 2.4 -0.4 0.8 

 2002 I 5.7 -4.0 -9.2 4.8 3.6 -0.9 

 II 6.7 -1.7 -7.8 5.1 3.8 -1.4 

 III 6.8 0.3 -6.1 4.7 3.1 -2.0 

 IV r5.1 1.0 r-4.0 r4.2 r1.9 -0.9 

 ANNUAL r6.1 -1.1 r-6.8 r4.7 r3.1 -1.3 

 2003 I r3.9 0.5 r-3.3 r4.5 r1.6 r0.6 

 II r3.5 r-1.0 r-4.3 r4.3 r2.1 r0.8 

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

 See footnotes following Table 6. September 4, 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 

 2001 I 149.3 158.3 106.0 129.4 105.3 86.6 

 II 149.7 154.9 103.5 131.3 106.1 87.7 

 III 151.7 151.8 100.1 132.0 106.4 87.0 

 IV 153.7 148.6 96.7 134.3 108.4 87.4 

 ANNUAL 151.0 153.4 101.5 131.7 106.5 87.2 

 2002 I 158.1 149.4 94.5 135.6 109.1 85.8 

 II 160.7 151.2 94.1 138.2 110.3 86.0 

 III 163.9 152.6 93.1 138.8 110.1 84.7 

 IV r164.5 151.5 r92.0 r140.0 r110.5 85.1 

 ANNUAL r161.8 151.2 r93.4 r138.1 r110.0 85.4 

 2003 I r165.9 151.3 r91.2 r141.9 r111.0 r85.5 

 II r167.4 r150.0 r89.6 r143.6 r112.2 r85.8 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.0 -8.9 -7.0 3.1 -0.6 5.2 

 II 1.0 -8.2 -9.1 6.2 2.9 5.1 

 III 5.4 -7.9 -12.6 2.0 1.1 -3.3 

 IV 5.5 -8.0 -12.8 7.2 7.8 1.6 

 ANNUAL 0.9 -6.3 -7.1 1.8 -0.9 0.9 

 2002 I 11.9 2.1 -8.7 3.9 2.6 -7.1 

 II 6.7 4.9 -1.7 8.1 4.4 1.2 

 III 8.3 3.8 -4.2 1.6 -0.5 -6.2 

 IV r1.5 -2.9 r-4.4 r3.5 r1.5 r2.0 

 ANNUAL r7.1 -1.5 r-8.0 r4.9 r3.3 -2.1 

 2003 I r3.4 -0.5 r-3.8 r5.6 r1.7 2.2 

 II r3.5 r-3.3 r-6.5 r4.9 r4.3 1.4 

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

 Percent change from corresponding quarter of previous year 

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

 II -0.2 -6.3 -6.1 3.0 -0.4 3.2 

 III 0.9 -7.8 -8.6 1.1 -1.6 0.2 

 IV 2.4 -8.2 -10.4 4.6 2.7 2.1 

 ANNUAL 0.9 -6.3 -7.1 1.8 -0.9 0.9 

 2002 I 5.9 -5.6 -10.8 4.8 3.6 -1.0 

 II 7.3 -2.4 -9.1 5.3 3.9 -1.9 

 III 8.1 0.5 -7.0 5.2 3.5 -2.7 

 IV r7.0 1.9 r-4.8 r4.2 r2.0 -2.6 

 ANNUAL r7.1 -1.5 r-8.0 r4.9 r3.3 -2.1 

 2003 I r5.0 1.3 r-3.5 r4.7 r1.7 r-0.3 

 II r4.2 r-0.8 r-4.7 r3.9 r1.7 -0.2 

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

 See footnotes following Table 6. September 4, 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 

 2001 I 123.1 112.7 91.6 134.7 109.7 109.4 

 II 123.8 111.7 90.2 135.8 109.7 109.7 

 III 125.6 111.3 88.6 138.6 111.7 110.3 

 IV 127.4 110.1 86.4 139.2 112.4 109.3 

 ANNUAL 125.0 111.5 89.2 137.0 110.8 109.7 

 2002 I 129.1 110.2 85.4 141.6 113.9 109.7 

 II 130.4 110.8 84.9 142.9 113.9 109.5 

 III 131.9 111.4 84.4 144.3 114.5 109.4 

 IV r130.9 110.1 r84.1 r145.3 r114.7 111.0 

 ANNUAL r130.6 110.6 r84.7 r143.5 r114.3 109.9 

 2003 I r132.5 109.9 r82.9 r147.9 r115.6 111.6 

 II r133.7 r109.4 r81.9 r150.0 r117.1 r112.2 

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

 Percent change from previous quarter at annual rate(5) 

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

 II 2.3 -3.8 -5.9 3.3 0.0 1.0 

 III 5.8 -1.4 -6.7 8.4 7.4 2.5 

 IV 6.0 -4.0 -9.4 1.9 2.5 -3.8 

 ANNUAL 2.3 -3.2 -5.3 3.6 0.8 1.3 

 2002 I 5.4 0.3 -4.9 7.1 5.8 1.6 

 II 4.2 1.9 -2.1 3.5 0.0 -0.6 

 III 4.6 2.3 -2.2 4.2 2.0 -0.4 

 IV r-3.1 -4.6 r-1.6 r2.6 r0.6 r5.9 

 ANNUAL r4.5 -0.8 r-5.0 r4.7 r3.1 0.2 

 2003 I r5.2 -0.6 r-5.5 r7.3 r3.3 2.0 

 II r3.4 r-1.7 r-4.9 r5.9 r5.3 r2.4 

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

 Percent change from corresponding quarter of previous year 

 2001 I 2.1 -1.9 -3.9 3.1 -0.3 1.0 

 II 1.7 -3.4 -5.1 4.1 0.7 2.4 

 III 2.5 -3.5 -5.9 4.1 1.3 1.5 

 IV 2.8 -3.8 -6.4 3.1 1.3 0.3 

 ANNUAL 2.3 -3.2 -5.3 3.6 0.8 1.3 

 2002 I 4.8 -2.2 -6.7 5.1 3.9 0.3 

 II 5.3 -0.8 -5.8 5.2 3.9 -0.1 

 III 5.0 0.1 -4.7 4.2 2.5 -0.8 

 IV r2.7 -0.1 r-2.7 r4.3 r2.1 1.6 

 ANNUAL r4.5 -0.8 r-5.0 r4.7 r3.1 0.2 

 2003 I r2.7 -0.3 r-2.9 r4.4 r1.5 1.7 

 II r2.5 r-1.2 r-3.6 r5.0 r2.8 r2.5 

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

 See footnotes following Table 6. September 4, 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 

 2001 I 118.7 147.9 124.7 131.2 106.8 110.6 111.6 110.8 93.1 109.3 

 II 120.0 147.8 123.1 132.6 107.1 110.4 113.5 111.3 95.4 109.9 

 III 121.3 147.7 121.7 133.8 107.8 110.3 115.5 111.7 97.9 110.5 

 IV 124.5 149.6 120.2 134.7 108.7 108.2 114.1 109.8 107.6 109.6 

 ANNUAL 121.1 148.2 122.4 133.0 107.6 109.9 113.7 110.9 98.5 109.8 

 2002 I 126.0 150.8 119.7 135.9 109.4 107.9 114.0 109.5 107.6 109.4 

 II 127.7 152.8 119.6 137.3 109.5 107.5 114.5 109.4 107.8 109.3 

 III 128.7 153.4 119.2 138.2 109.7 107.4 115.4 109.6 104.6 109.1 

 IV 129.9 154.5 118.9 r139.2 r109.9 107.1 115.2 109.3 110.1 109.4 

 ANNUAL 128.1 152.9 r119.3 137.7 109.6 107.5 114.8 109.4 107.5 109.3 

 2003 I 131.3 155.5 118.4 141.0 110.2 107.3 114.6 109.3 112.2 109.6 

 II 133.9 157.8 117.8 142.3 111.1 106.3 112.2 107.9 125.3 109.4 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.6 -3.3 -0.7 -1.2 -4.7 1.4 10.1 3.7 -20.2 1.7 

 II 4.7 -0.5 -5.0 4.3 1.0 -0.4 7.1 1.6 10.0 2.2 

 III 4.4 -0.3 -4.5 3.7 2.8 -0.6 7.2 1.5 10.8 2.2 

 IV 10.8 5.4 -4.9 2.7 3.3 -7.3 -4.9 -6.7 46.1 -3.3 

 ANNUAL 2.0 -0.1 -2.1 3.1 0.3 1.0 6.5 2.5 -11.7 1.2 

 2002 I 5.0 3.3 -1.6 3.7 2.5 -1.2 -0.2 -0.9 -0.2 -0.8 

 II 5.5 5.3 -0.3 4.2 0.6 -1.3 1.7 -0.5 0.9 -0.3 

 III 3.1 1.7 -1.4 2.7 0.5 -0.5 3.1 0.5 -11.2 -0.5 

 IV r3.8 2.8 r-1.0 r2.8 r0.8 -1.0 -0.6 -0.9 22.8 0.9 

 ANNUAL 5.8 3.1 -2.5 3.5 r1.9 -2.2 1.0 -1.3 9.1 -0.5 

 2003 I r4.3 2.8 r-1.5 r5.2 r1.3 0.9 -1.9 0.1 7.6 0.7 

 II 8.1 5.9 -2.0 3.9 3.3 -3.8 -8.4 -5.1 55.5 -0.7 

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

 Percent change from corresponding quarter of previous year 

 2001 I 0.9 0.4 -0.4 3.5 0.1 2.6 6.7 3.7 -22.0 1.3 

 II 1.5 -0.1 -1.6 3.9 0.5 2.3 6.8 3.5 -19.7 1.3 

 III 1.6 -1.1 -2.7 2.7 0.0 1.1 7.8 2.9 -10.6 1.7 

 IV 4.2 0.3 -3.8 2.4 0.5 -1.8 4.7 0.0 9.2 0.7 

 ANNUAL 2.0 -0.1 -2.1 3.1 0.3 1.0 6.5 2.5 -11.7 1.2 

 2002 I 6.2 1.9 -4.0 3.6 2.4 -2.4 2.2 -1.2 15.5 0.0 

 II 6.4 3.4 -2.8 3.6 2.3 -2.6 0.9 -1.7 13.0 -0.6 

 III 6.1 3.9 -2.1 3.3 1.7 -2.6 -0.1 -1.9 6.9 -1.3 

 IV r4.4 3.2 r-1.1 3.3 r1.1 -1.0 1.0 -0.4 2.4 -0.2 

 ANNUAL 5.8 3.1 -2.5 3.5 r1.9 -2.2 1.0 -1.3 9.1 -0.5 

 2003 I 4.2 3.1 r-1.1 3.7 0.8 -0.5 0.6 -0.2 4.3 0.2 

 II 4.8 3.3 -1.5 3.6 1.5 -1.1 -2.0 -1.4 16.2 0.1 

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

 See footnotes following Table 6. September 4, 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 –1.4 and +1.5 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 first quarter of 2003. 

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.