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 information: (202) 691-5606 MATERIAL IS EMBARGOED

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

Media contact: (202) 691-5902 WEDNESDAY, JUNE 4, 2008. 

PRODUCTIVITY AND COSTS 

First Quarter 2008, Revised 

 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 first quarter of 2008. 

The revised seasonally adjusted annual rates of productivity change in the first quarter were: 

 2.4 percent in the business sector and 

 2.6 percent in the nonfarm business sector. 

In both sectors, the first-quarter productivity gains were greater than the preliminary estimates 

reported on May 7, due primarily to upward revisions to output growth. 

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

3.6 percent in manufacturing, 

2.6 percent in durable goods manufacturing, and 

 5.7 percent in nondurable goods manufacturing. 

 Manufacturing productivity growth was slower in the first quarter of 2008 than reported 

on May 7 as output was revised down by more than hours. Output and hours in manufacturing, 

which includes about 12 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. Firstquarter measures are summarized in table A and appear in detail in tables 1 through 5. 

 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 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 first-quarter 2008 measures 

(Seasonally adjusted annual rates) 

Sector 

Productivity Output Hours 

Hourly 

compensation 

Real 

hourly 

compensation 

Unit 

labor 

costs 

 Percent change from preceding quarter 

Business 2.4 0.6 -1.7 4.8 0.4 2.3 

Nonfarm business 2.6 0.7 -1.8 4.9 0.6 2.2 

Manufacturing 3.6 -1.2 -4.7 7.9 3.5 4.2 

 Durable 2.6 -0.9 -3.4 7.5 3.1 4.8 

 Nondurable 5.7 -1.6 -6.9 8.5 4.0 2.6 

 Percent change from same quarter a year ago 

Business 3.4 2.7 -0.7 4.1 -0.1 0.7 

Nonfarm business 3.3 2.7 -0.6 4.0 -0.1 0.7 

Manufacturing 4.0 1.9 -2.1 3.8 -0.3 -0.2 

 Durable 5.5 3.5 -1.9 3.7 -0.5 -1.8 

 Nondurable 2.5 0.0 -2.4 4.2 0.0 1.6 

Business 

 Business sector productivity grew 2.4 percent in the first quarter of 2008 as output 

increased 0.6 percent and hours worked by all persons—employees, proprietors, and unpaid 

family workers—declined 1.7 percent (seasonally adjusted annual rates). When the first quarter 

of 2008 is compared with the first quarter of 2007, output per hour in the business sector 

increased 3.4 percent—the largest four-quarter gain since a 3.4 percent increase from the second 

quarter of 2003 to the second quarter of 2004 (see tables A and 1). 

 Hourly compensation increased at a 4.8 percent annual rate in the first quarter of 2008. 

This measure of 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, rose 0.4 percent in the first quarter of 2008 following a 0.6 percent 

gain in the previous quarter. 

The change in unit labor costs approximates the change in hourly compensation less the 

change in productivity. In the first quarter of 2008 these costs grew at a 2.3 percent annual rate, 

but from the first quarter of 2007 to the first quarter of 2008 unit labor costs rose just 0.7 percent. 

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

and unit nonlabor payments, grew 2.0 percent in the first quarter of 2008. 

 
3 

Nonfarm business 

 During the first quarter of 2008, productivity rose 2.6 percent in the nonfarm business 

sector; output increased 0.7 percent and hours of all persons fell 1.8 percent (seasonally-adjusted 

annual rates). From the first quarter of 2007 to the first quarter of 2008, output per hour in the 

nonfarm business sector increased 3.3 percent, the largest four-quarter change since a 3.8 percent 

increase from the second quarter of 2003 to the second quarter of 2004. Nonfarm business 

productivity had increased at an average annual rate of 2.7 percent from 2000 through 2006. 

 Hourly compensation increased 4.9 percent in the nonfarm business sector in the first 

quarter of 2008. The measure increased 6.6 percent in the fourth quarter, as revised. When 

hourly compensation is adjusted for the rise in consumer prices, real hourly compensation grew 

1.5 percent in the fourth quarter of 2007 and 0.6 percent in the first quarter of 2008. 

Unit labor costs rose 2.2 percent in the first quarter of 2008. As in the business sector, 

the percent change from the same quarter a year ago was 0.7 percent. The implicit price deflator 

for nonfarm business output increased by 2.3 percent in the first quarter of 2008. 

-6

-4

-2

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008

Percent change

From previous quarter, compound annual rate

From same quarter a year ago

Chart 1. Output per Hour, Nonfarm Business, all persons, 2001:1-2007:4 Chart 1. Output per Hour, Nonfarm Business, all persons, 2001:1-2008:1

-6

-4

-2

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008

Percent change

From previous quarter, compound annual rate

From same quarter a year ago

Chart 2. Unit Labor Costs, Nonfarm Business, all persons, 2001:1-2008:1

Manufacturing 

 Productivity grew at a 3.6 percent annual rate in the manufacturing sector during the first 

quarter of 2008, reflecting a 1.2 percent decrease in output and a 4.7 percent decrease in hours 

(table A). This was the largest decline in hours since a 6.3 percent drop in the third quarter of 

2003 Output per hour rose at the highest rate in three years, 5.7 percent, in nondurable goods 

industries during the first quarter; hours fell by 6.9 percent and output declined 1.6 percent 

(tables 3, 4, and 5). Total manufacturing productivity grew 4.0 percent from the first quarter of 

2007 to the first quarter of 2008, similar to the 3.8 percent average annual increase from 2000 to 

2006. 

 Hourly compensation in manufacturing grew 7.9 percent during the first quarter of 2008. 

Real hourly compensation, which takes into account changes in consumer prices, increased 3.5 

percent for all manufacturing workers, as a 3.1 percent rise in durable manufacturing real hourly 

compensation combined with a 4.0 percent rise in the nondurable goods industries. 

 
4 

 Unit labor costs rose 4.2 percent in manufacturing during the first quarter of 2008, as 

hourly compensation increased faster than productivity in both subsectors. However, over the 

past four quarters total manufacturing unit labor costs edged down 0.2 percent, as durable goods 

unit labor costs declined 1.8 percent and nondurable goods unit labor costs rose 1.6 percent. 

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008

Percent change

From previous quarter, compound annual rate

From same quarter a year ago

Chart 3. Output per Hour, Manufacturing, all persons, 2001:1-2008:1

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008

Percent change

From previous quarter, compound annual rate

From same quarter a year ago

Chart 4. Unit Labor Costs, Manufacturing, all persons, 2001:1-2008:1

Nonfinancial corporations 

Preliminary first-quarter 2008 measures of productivity and costs for nonfinancial 

corporations also were announced today (tables B and 6). Productivity rose 4.6 percent in the 

first quarter as output rose 3.2 percent and employee-hours declined 1.4 percent (seasonally 

adjusted annual rates). From the first quarter of 2007 to the first quarter of 2008 productivity 

grew 3.0 percent; it had grown 2.6 percent per year from 2000 to 2006. 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. 

Table B. Nonfinancial corporations: Preliminary first-quarter 2008 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 

2008 I 4.6 3.2 -1.4 5.9 1.5 1.2 -1.5 0.5 

Percent change from same quarter a year ago 

2008 I 3.0 3.0 0.0 4.2 0.0 1.1 -5.5 0.1 

 
5 

Hourly compensation increased 5.9 percent during the first quarter of 2008, the same as 

the revised fourth quarter 2007 increase. Taking the 4.3 percent rise in consumer prices into 

account, real hourly compensation increased 1.5 percent in the first quarter of 2008, more than 

the 0.8 percent increase one quarter earlier. Unit labor costs in nonfinancial corporations rose 

1.2 percent in the first quarter of 2008, and 1.1 percent over the last four quarters. 

REVISED MEASURES 

 Previous and revised measures for the first quarter of 2008 in the business, nonfarm 

business, and manufacturing sectors are compared in table C. 

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 

First quarter 2008 

Business: 

 Previous ....................... 1.9 0.2 -1.6 4.2 -0.1 2.2 

 Revised......................... 2.4 0.6 -1.7 4.8 0.4 2.3 

Nonfarm business: 

 Previous ....................... 2.2 0.4 -1.8 4.4 0.1 2.2 

 Revised......................... 2.6 0.7 -1.8 4.9 0.6 2.2 

Manufacturing: 

 Previous ....................... 4.1 -0.3 -4.2 6.7 2.3 2.5 

 Revised......................... 3.6 -1.2 -4.7 7.9 3.5 4.2 

Fourth quarter 2007 

Business: 

 Previous ....................... 0.9 0.1 -0.7 3.7 -1.3 2.8 

 Revised......................... 0.9 0.1 -0.7 5.6 0.6 4.7 

Nonfarm business: 

 Previous ....................... 1.8 0.2 -1.6 4.6 -0.4 2.8 

 Revised......................... 1.8 0.2 -1.6 6.6 1.5 4.7 

Manufacturing: 

 Previous ....................... 4.2 -0.4 -4.4 4.3 -0.6 0.2 

 Revised......................... 4.2 -0.4 -4.4 7.4 2.3 3.1 

Annual average 2007 

Business: 

 Previous ....................... 1.9 2.3 0.4 5.0 2.1 3.1 

 Revised......................... 1.9 2.3 0.4 5.1 2.2 3.2 

Nonfarm business: 

 Previous ....................... 1.8 2.3 0.5 4.9 2.1 3.1 

 Revised......................... 1.8 2.3 0.5 5.1 2.2 3.2 

Manufacturing: 

 Previous ....................... 3.4 1.6 -1.7 5.4 2.5 1.9 

 Revised......................... 3.4 1.6 -1.7 5.6 2.7 2.1 

 
6 

 In the business and nonfarm business sectors, productivity was revised up along with 

output, as hours were little changed. Upward revisions to hourly compensation offset those to 

productivity, leaving the increase in unit labor costs about the same as reported May 7. 

 In the manufacturing sector, productivity growth was revised down in the first quarter as 

output was revised down by more than hours. The downward revision to total manufacturing 

productivity combined with an upward revision to hourly compensation to revise the increase in 

unit labor costs from 2.5 percent to 4.2 percent. 

Table C also presents preliminary and revised results for the fourth quarter and annual 

average of 2007. Only hourly compensation and related measures were revised; productivity, 

output, and hours were not. These revisions resulted from incorporation of revised data on 

employee compensation from the Bureau of Economic Analysis (BEA) of the U.S. Department 

of Commerce, released May 29. In the fourth quarter of 2007, hourly compensation, real hourly 

compensation, and unit labor costs were revised up in all sectors. Annual averages of these 

measures for 2007 were also revised up. 

REVISED MEASURES: NONFINANCIAL CORPORATIONS 

Fourth quarter and annual average 2007 measures were revised for the nonfinancial 

corporate sector. As revised, productivity increased at a 2.4 percent annual rate in the fourth 

quarter of 2007, reflecting similar growth in output and unchanged employee-hours. An 

upward revision to hourly compensation outpaced the revision to productivity, and as a result 

unit labor costs rose slightly faster than reported May 7. For the year 2007, productivity was 

revised up slightly due solely to an upward revision to output. 

Table D. 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 

Fourth quarter 2007 

Previous 0.9 0.9 0.0 3.5 -1.4 2.6 -16.9 0.3 

Revised 2.4 2.4 0.0 5.9 0.8 3.4 -18.2 0.3 

Annual average 2007 

Previous 1.4 2.1 0.7 4.7 1.8 3.2 -5.7 1.6 

Revised 1.5 2.2 0.7 4.8 1.9 3.2 -5.8 1.6 

 
7 

Next release date 

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

Aug. 8, 2008. Preliminary second-quarter measures for business, nonfarm business, and 

manufacturing will be released at that time. The Aug. 8 release also will incorporate the threeyear revision of the National Income and Product Accounts. 

 
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. Weekly paid 

hours are adjusted to hours at work using data from the National Compensation Survey (NCS). 

The BLS Hours at Work survey, conducted for this purpose, was used for earlier years. The 

Office of Productivity and Technology estimates average weekly hours at work for 

nonproduction and supervisory workers using information from the Current Population Survey 

(CPS), the CES, and the NCS. 

Data from the 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. 

The CES measures jobs, counting a person who is employed by two or more 

establishments at each place of employment. In contrast, the CPS features measures of 

employment that count each person only once and classify each person according to his or her 

primary job; hours worked at all jobs by that person accrue to his or her primary job. However, 

the CPS also collects more detailed information on employment and hours worked at primary 

jobs and all other jobs, separately. The BLS productivity measures use the more detailed 

information on employment and hours to assign all hours worked to the correct industrial sector 

and avoid duplicating hours data from the CES. 

Output: Business sector output is a chain-type, current-weighted index constructed after 

excluding from gross domestic product (GDP) the following outputs: general government, 

nonprofit institutions, and private households (including owner-occupied housing). 

Corresponding exclusions also are made in labor inputs. Business output accounted for about 78 

percent of the value of GDP in 2000. Nonfarm business, which also excludes farming, accounted 

for about 77 percent of GDP in 2000. 

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 BLS. 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 3-digit NAICS industries: wood 

product manufacturing; nonmetallic mineral product manufacturing; primary metal manufacturing; fabricated metal product manufacturing; machinery manufacturing; computer and electronic product manufacturing; electrical equipment and appliance manufacturing; transportation 

equipment manufacturing; furniture and related product manufacturing; and miscellaneous 

manu-facturing. Nondurables include: food manufacturing; beverage and tobacco product 

manufac-turing; textile mills; textile product mills; apparel manufacturing; leather and allied 

product manufacturing; paper manufacturing; printing and related support activities; petroleum 

and coal products manufacturing; chemical manufacturing; and plastics and rubber products 

manufacturing. 

Nonfinancial corporate output is a chain-type, current-weighted 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; private 

households; unincorporated business; and those corporations classified as offices of bank 
9 

holding companies, offices of other holding companies, or offices in the finance and insurance 

sector. Nonfinancial corporations accounted for about 54 percent of the value of GDP in 2000. 

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. 

Labor Compensation: Estimates of labor compensation by major sector, required for measures 

of hourly compensation and unit labor costs, are based primarily on employee compensation data 

from the NIPA, prepared by the BEA. The compensation of employees in general government, 

nonprofit institutions and private households are subtracted from compensation of domestic 

employees to derive employee compensation for the business sector. The labor compensation of 

proprietors cannot be explicitly identified and must be estimated. This is done by assuming that 

proprietors have the same hourly compensation as employees in the same sector. The quarterly 

labor productivity and cost measures do not contain estimates of compensation for unpaid family 

workers. 

Unit Labor Costs: The measures of unit labor costs in this release describe the relationship 

between compensation per hour and productivity, or real output per hour, and can be used as an 

indicator of inflationary pressure on producers. Increases in hourly compensation increase unit 

labor costs; labor productivity increases offset compensation increases and lower unit labor 

costs. 

Presentation of the data: The quarterly data in this release are presented in three ways; as 

index number series where 1992=100, as percent changes from the corresponding quarter of the 

previous year, and as percent changes from the previous quarter presented at a compound annual 

rate. Annual data are presented both as index number series and percent changes from the 

previous year. 

 The index numbers and rates of change reported in the productivity and costs news 

release are rounded to one decimal place. All percent changes in this release and on the BLS 

web site are calculated using index numbers to three decimal places. These index numbers are 

available at the BLS web site, http://www.bls.gov/data/home.htm, or by contacting the BLS 

Division of Major Sector Productivity. (Telephone 202-691-5606 or email 

DPRWEB@BLS.GOV) 

Information in this release will be made available to sensory-impaired individuals upon 

request. Voice phone: 202-691-5606; Federal Relay Service number: 1-800-877-8339.
10 

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 

2006 I 136.3 163.2 119.7 168.3 120.8 123.4 133.0 127.0 

 II 136.7 164.2 120.1 168.1 119.6 123.0 136.6 128.0 

 III 136.1 164.4 120.8 168.7 118.9 123.9 136.7 128.7 

 IV 136.5 165.5 121.2 173.5 122.7 127.1 132.0 128.9 

 ANNUAL 136.4 164.3 120.5 169.6 120.5 124.4 134.6 128.2 

2007 I 136.8 165.6 121.0 176.1 123.5 128.7 132.8 130.2 

 II 138.1 167.3 121.2 177.1 122.8 128.3 135.4 130.9 

 III 140.3 169.7 120.9 178.7 123.1 127.4 137.1 131.0 

 IV 140.6 169.7 120.7 r181.2 r123.3 r128.9 r136.3 131.7 

 ANNUAL 139.0 168.1 121.0 r178.3 r123.2 r128.3 r135.4 131.0 

2008 I r141.4 r170.0 r120.2 r183.3 r123.4 r129.6 r136.8 r132.3 

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

 Percent change from previous quarter at annual rate(5) 

2006 I 2.4 5.5 3.0 7.1 5.2 4.6 0.0 2.8 

 II 1.0 2.5 1.5 -0.5 -3.9 -1.5 11.3 3.3 

 III -1.7 0.6 2.3 1.5 -2.4 3.2 0.4 2.1 

 IV 1.2 2.6 1.4 11.9 13.6 10.6 -12.9 0.8 

 ANNUAL 1.0 3.1 2.1 4.0 0.7 2.9 2.9 2.9 

2007 I 0.9 0.2 -0.8 6.2 2.5 5.2 2.3 4.1 

 II 3.8 4.4 0.5 2.4 -2.1 -1.4 8.2 2.2 

 III 6.4 5.7 -0.7 3.7 0.9 -2.6 5.2 0.3 

 IV 0.9 0.1 -0.7 r5.6 r0.6 r4.7 r-2.3 1.9 

 ANNUAL 1.9 2.3 0.4 r5.1 r2.2 r3.2 r0.6 2.2 

2008 I r2.4 r0.6 r-1.7 r4.8 r0.4 r2.3 r1.5 2.0 

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

 Percent change from corresponding quarter of previous year 

2006 I 1.5 3.8 2.3 4.2 0.5 2.7 3.8 3.1 

 II 1.8 3.6 1.8 4.0 0.0 2.1 5.2 3.3 

 III 0.2 2.4 2.2 2.8 -0.5 2.6 3.5 3.0 

 IV 0.7 2.8 2.1 4.9 2.9 4.1 -0.7 2.2 

 ANNUAL 1.0 3.1 2.1 4.0 0.7 2.9 2.9 2.9 

2007 I 0.4 1.5 1.1 4.7 2.2 4.3 -0.1 2.6 

 II 1.0 1.9 0.9 5.4 2.7 4.3 -0.8 2.3 

 III 3.1 3.2 0.1 6.0 3.5 2.8 0.3 1.8 

 IV 3.0 2.6 -0.4 r4.4 r0.4 r1.4 r3.3 2.1 

 ANNUAL 1.9 2.3 0.4 r5.1 r2.2 r3.2 r0.6 2.2 

2008 I r3.4 r2.7 r-0.7 r4.1 r-0.1 r0.7 r3.1 1.6 

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

See footnotes following Table 6. June 4, 2008 

r=revised Source: Bureau of Labor Statistics 
11 

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 

2006 I 135.2 163.4 120.8 167.0 119.9 123.5 134.9 127.7 

 II 135.7 164.4 121.2 167.0 118.8 123.1 138.8 128.9 

 III 135.1 164.7 121.9 167.6 118.1 124.0 138.6 129.4 

 IV 135.6 165.7 122.2 172.5 122.0 127.2 133.4 129.5 

 ANNUAL 135.4 164.5 121.5 168.5 119.7 124.5 136.4 128.9 

2007 I 136.1 165.9 121.9 175.2 122.8 128.8 133.8 130.6 

 II 137.0 167.6 122.4 175.8 121.9 128.4 136.4 131.3 

 III 139.0 169.9 122.3 177.2 122.0 127.5 137.9 131.3 

 IV 139.6 170.0 121.8 r180.1 r122.5 r129.0 r136.8 131.9 

 ANNUAL 137.9 168.4 122.1 r177.1 r122.3 r128.4 r136.2 131.3 

2008 I r140.5 r170.3 r121.2 r182.3 r122.7 r129.7 r137.5 r132.6 

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

 Percent change from previous quarter at annual rate(5) 

2006 I 2.2 5.7 3.4 6.9 4.9 4.5 0.6 3.0 

 II 1.3 2.4 1.1 0.0 -3.5 -1.3 12.1 3.7 

 III -1.6 0.8 2.4 1.5 -2.5 3.1 -0.5 1.6 

 IV 1.4 2.6 1.1 12.3 14.0 10.7 -14.2 0.3 

 ANNUAL 1.0 3.2 2.2 3.9 0.6 2.9 3.1 3.0 

2007 I 1.3 0.3 -0.9 6.4 2.7 5.0 1.3 3.6 

 II 2.7 4.2 1.5 1.3 -3.2 -1.3 7.9 2.1 

 III 6.0 5.6 -0.4 3.3 0.6 -2.5 4.5 0.1 

 IV 1.8 0.2 -1.6 r6.6 r1.5 r4.7 r-3.3 1.6 

 ANNUAL 1.8 2.3 0.5 r5.1 r2.2 r3.2 r-0.2 1.9 

2008 I r2.6 r0.7 -1.8 r4.9 r0.6 2.2 r2.3 r2.3 

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

 Percent change from corresponding quarter of previous year 

2006 I 1.4 3.8 2.4 4.2 0.4 2.8 4.1 3.3 

 II 1.6 3.6 2.0 3.8 -0.1 2.2 5.7 3.5 

 III 0.1 2.4 2.3 2.7 -0.6 2.6 3.6 3.0 

 IV 0.8 2.8 2.0 5.0 3.0 4.2 -1.0 2.2 

 ANNUAL 1.0 3.2 2.2 3.9 0.6 2.9 3.1 3.0 

2007 I 0.6 1.5 0.9 4.9 2.4 4.3 -0.8 2.3 

 II 1.0 2.0 1.0 5.3 2.5 4.3 -1.7 1.9 

 III 2.8 3.2 0.3 5.8 3.3 2.8 -0.5 1.5 

 IV 2.9 2.6 -0.4 r4.4 r0.4 r1.4 r2.5 1.8 

 ANNUAL 1.8 2.3 0.5 r5.1 r2.2 r3.2 r-0.2 1.9 

2008 I r3.3 r2.7 -0.6 r4.0 r-0.1 r0.7 r2.8 1.5 

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

See footnotes following Table 6. June 4, 2008 

r=revised Source: Bureau of Labor Statistics 
12 

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 

2006 I 172.6 147.2 85.3 172.4 123.8 99.9 

 II 172.7 147.4 85.4 170.5 121.3 98.7 

 III 174.5 148.0 84.8 171.6 120.9 98.4 

 IV 175.4 147.4 84.0 177.4 125.5 101.1 

 ANNUAL 173.8 147.5 84.9 173.0 122.8 99.5 

2007 I 177.0 147.8 83.5 181.7 127.4 102.7 

 II 178.7 149.6 83.7 181.6 125.9 101.6 

 III 180.6 151.2 83.7 181.9 125.2 100.7 

 IV r182.5 r151.0 82.8 r185.2 r126.0 r101.5 

 ANNUAL r179.7 r149.9 83.4 r182.6 r126.1 r101.6 

2008 I r184.1 r150.6 r81.8 r188.7 r127.0 r102.5 

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

 Percent change from previous quarter at annual rate(5) 

2006 I -0.6 1.8 2.4 9.1 7.1 9.7 

 II 0.2 0.6 0.4 -4.4 -7.7 -4.6 

 III 4.3 1.6 -2.5 2.7 -1.3 -1.5 

 IV 2.2 -1.7 -3.8 14.1 15.8 11.6 

 ANNUAL 1.1 1.8 0.8 2.8 -0.5 1.7 

2007 I 3.6 1.2 -2.3 10.3 6.4 6.4 

 II 3.8 4.9 1.0 -0.4 -4.8 -4.1 

 III 4.5 4.3 -0.2 0.7 -2.0 -3.6 

 IV 4.2 -0.4 -4.4 r7.4 r2.3 r3.1 

 ANNUAL 3.4 1.6 -1.7 r5.6 r2.7 r2.1 

2008 I r3.6 r-1.2 r-4.7 r7.9 r3.5 r4.2 

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

 Percent change from corresponding quarter of previous year 

2006 I 1.5 2.4 0.9 3.8 0.0 2.2 

 II 0.4 2.1 1.7 1.5 -2.4 1.1 

 III 0.9 2.3 1.4 0.7 -2.6 -0.2 

 IV 1.5 0.6 -0.9 5.1 3.1 3.6 

 ANNUAL 1.1 1.8 0.8 2.8 -0.5 1.7 

2007 I 2.6 0.4 -2.1 5.4 2.9 2.8 

 II 3.5 1.5 -1.9 6.5 3.7 2.9 

 III 3.5 2.1 -1.3 6.0 3.6 2.4 

 IV 4.0 2.5 -1.5 r4.4 r0.4 r0.4 

 ANNUAL 3.4 1.6 -1.7 r5.6 r2.7 r2.1 

2008 I r4.0 r1.9 r-2.1 r3.8 r-0.3 r-0.2 

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

See footnotes following Table 6. June 4, 2008 

r=revised Source: Bureau of Labor Statistics 
13 

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 

2006 I 198.8 179.6 90.3 168.1 120.7 84.6 

 II 198.9 180.5 90.7 166.1 118.2 83.5 

 III 201.7 181.1 89.8 167.3 117.9 82.9 

 IV 202.4 180.1 89.0 173.6 122.8 85.8 

 ANNUAL 200.4 180.3 90.0 168.7 119.8 84.2 

2007 I 204.4 180.3 88.2 177.6 124.5 86.9 

 II 207.9 183.9 88.4 177.5 123.0 85.4 

 III 210.9 186.9 88.6 177.5 122.2 84.2 

 IV r214.3 r187.0 87.3 r180.9 r123.0 r84.4 

 ANNUAL r209.4 r184.5 88.1 r178.4 r123.2 r85.2 

2008 I r215.7 r186.6 r86.5 r184.2 r124.0 r85.4 

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

 Percent change from previous quarter at annual rate(5) 

2006 I -1.8 0.4 2.3 11.6 9.6 13.7 

 II 0.3 2.1 1.8 -4.7 -8.0 -5.0 

 III 5.7 1.2 -4.3 2.9 -1.1 -2.7 

 IV 1.4 -2.1 -3.4 16.0 17.8 14.5 

 ANNUAL 2.2 3.3 1.1 3.4 0.1 1.2 

2007 I 3.9 0.4 -3.4 9.6 5.7 5.4 

 II 7.1 8.2 1.0 -0.3 -4.7 -6.9 

 III 6.0 6.8 0.8 0.1 -2.6 -5.6 

 IV 6.6 0.3 -6.0 r7.8 r2.7 r1.1 

 ANNUAL 4.5 2.3 -2.0 r5.7 r2.8 r1.2 

2008 I r2.6 r-0.9 r-3.4 r7.5 r3.1 r4.8 

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

 Percent change from corresponding quarter of previous year 

2006 I 3.2 4.8 1.6 4.2 0.4 1.0 

 II 2.0 4.6 2.5 2.1 -1.8 0.1 

 III 2.2 3.6 1.4 1.1 -2.2 -1.1 

 IV 1.4 0.4 -1.0 6.2 4.1 4.7 

 ANNUAL 2.2 3.3 1.1 3.4 0.1 1.2 

2007 I 2.8 0.4 -2.4 5.7 3.2 2.8 

 II 4.5 1.8 -2.5 6.9 4.1 2.3 

 III 4.6 3.2 -1.3 6.1 3.7 1.5 

 IV 5.9 3.9 -1.9 r4.2 r0.2 r-1.6 

 ANNUAL 4.5 2.3 -2.0 r5.7 r2.8 r1.2 

2008 I 5.5 r3.5 r-1.9 r3.7 r-0.5 r-1.8 

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

See footnotes following Table 6. June 4, 2008 

r=revised Source: Bureau of Labor Statistics 
14 

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 

2006 I 148.0 115.0 77.7 178.3 128.0 120.4 

 II 148.4 114.8 77.3 176.4 125.6 118.8 

 III 149.0 115.4 77.4 177.6 125.1 119.2 

 IV 150.3 115.1 76.6 181.9 128.7 121.1 

 ANNUAL 148.9 115.1 77.2 178.6 126.8 119.9 

2007 I 151.2 115.6 76.5 187.1 131.2 123.7 

 II 151.4 116.0 76.6 186.9 129.6 123.5 

 III 152.7 116.4 76.3 187.8 129.3 123.0 

 IV r152.9 r116.1 75.9 r191.0 r129.9 r124.9 

 ANNUAL r152.0 r116.0 76.3 r188.2 r130.0 r123.8 

2008 I r155.0 r115.7 r74.6 r194.9 r131.2 r125.7 

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

 Percent change from previous quarter at annual rate(5) 

2006 I 1.0 3.6 2.6 4.4 2.5 3.4 

 II 1.1 -0.9 -1.9 -4.2 -7.5 -5.2 

 III 1.5 2.2 0.6 2.7 -1.3 1.1 

 IV 3.5 -1.1 -4.4 10.2 11.9 6.5 

 ANNUAL 0.2 0.3 0.1 1.5 -1.7 1.3 

2007 I 2.5 2.0 -0.5 11.9 8.0 9.2 

 II 0.4 1.3 0.9 -0.4 -4.8 -0.8 

 III 3.5 1.6 -1.9 1.7 -1.0 -1.7 

 IV r0.6 r-1.1 -1.7 r7.1 r2.0 r6.4 

 ANNUAL 2.1 0.9 -1.2 r5.4 r2.5 r3.3 

2008 I r5.7 r-1.6 r-6.9 r8.5 r4.0 r2.6 

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

 Percent change from corresponding quarter of previous year 

2006 I 0.2 -0.1 -0.3 2.8 -0.9 2.7 

 II -0.7 -0.6 0.1 0.1 -3.7 0.8 

 III -0.4 1.0 1.4 0.0 -3.2 0.4 

 IV 1.8 0.9 -0.8 3.1 1.1 1.4 

 ANNUAL 0.2 0.3 0.1 1.5 -1.7 1.3 

2007 I 2.1 0.5 -1.6 4.9 2.5 2.7 

 II 2.0 1.1 -0.9 6.0 3.2 3.9 

 III 2.5 0.9 -1.5 5.7 3.3 3.2 

 IV 1.7 0.9 -0.8 r5.0 r0.9 r3.2 

 ANNUAL 2.1 0.9 -1.2 r5.4 r2.5 r3.3 

2008 I r2.5 r0.0 r-2.4 r4.2 r0.0 r1.6 

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

See footnotes following Table 6. June 4, 2008 

r=revised Source: Bureau of Labor Statistics 
15 

Table 6. Nonfinancial corporate sector: 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 

2006 I 142.8 171.9 120.4 163.8 117.6 114.8 112.3 114.1 164.0 118.5 

 II 141.9 171.5 120.9 163.9 116.7 115.5 114.2 115.2 164.8 119.6 

 III 142.7 173.4 121.5 164.6 116.0 115.3 114.0 114.9 172.8 120.1 

 IV 143.0 174.2 121.8 169.3 119.8 118.4 114.7 117.4 150.4 120.3 

 ANNUAL 142.6 172.8 121.1 165.4 117.5 116.0 113.8 115.4 162.9 119.7 

2007 I 143.5 174.6 121.7 171.4 120.2 119.5 114.9 118.2 154.7 121.5 

 II 144.2 175.9 121.9 172.4 119.5 119.5 115.0 118.3 158.5 121.9 

 III 145.3 177.5 122.2 173.6 119.5 119.5 114.7 118.2 154.3 121.4 

 IV r146.1 r178.5 122.2 r176.1 r119.8 r120.5 r115.1 r119.0 r146.8 121.5 

 ANNUAL r144.8 r176.6 122.0 r173.4 r119.8 r119.8 r114.9 r118.5 r153.5 121.6 

2008 I 147.8 179.9 121.7 178.6 120.2 120.9 115.0 119.3 146.2 121.7 

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

 Percent change from previous quarter at annual rate(5) 

2006 I 2.0 4.5 2.4 5.1 3.2 3.0 -0.1 2.2 13.7 3.5 

 II -2.5 -0.8 1.7 0.2 -3.3 2.8 7.2 3.9 1.9 3.7 

 III 2.4 4.4 1.9 1.6 -2.4 -0.8 -0.9 -0.9 20.9 1.7 

 IV 0.9 1.9 1.1 12.0 13.8 11.1 2.7 8.8 -42.6 0.8 

 ANNUAL 0.7 3.0 2.2 3.5 0.2 2.8 1.4 2.4 5.5 2.8 

2007 I 1.2 0.9 -0.3 5.1 1.4 3.8 0.5 2.9 11.8 3.9 

 II 2.1 2.9 0.8 2.3 -2.3 0.2 0.5 0.3 10.4 1.4 

 III 2.9 3.7 0.7 2.8 0.1 -0.1 -1.2 -0.4 -10.2 -1.6 

 IV r2.4 r2.4 0.0 r5.9 r0.8 r3.4 r1.4 r2.9 r-18.2 0.3 

 ANNUAL r1.5 r2.2 0.7 r4.8 r1.9 3.2 r1.0 2.6 r-5.8 1.6 

2008 I 4.6 3.2 -1.4 5.9 1.5 1.2 -0.4 0.8 -1.5 0.5 

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

 Percent change from corresponding quarter of previous year 

2006 I 1.3 4.0 2.6 3.7 0.0 2.4 1.1 2.0 8.4 2.8 

 II 0.0 2.3 2.3 3.4 -0.5 3.5 2.9 3.3 2.5 3.2 

 III 1.0 3.3 2.3 2.3 -1.0 1.3 -0.4 0.9 17.8 2.8 

 IV 0.7 2.5 1.8 4.6 2.6 3.9 2.2 3.4 -5.3 2.4 

 ANNUAL 0.7 3.0 2.2 3.5 0.2 2.8 1.4 2.4 5.5 2.8 

2007 I 0.5 1.6 1.1 4.6 2.2 4.1 2.3 3.6 -5.7 2.5 

 II 1.6 2.5 0.9 5.2 2.4 3.5 0.7 2.7 -3.8 1.9 

 III 1.8 2.3 0.6 5.5 3.1 3.7 0.6 2.8 -10.7 1.1 

 IV r2.2 r2.5 0.3 r4.0 r0.0 r1.8 r0.3 1.4 r-2.4 1.0 

 ANNUAL r1.5 r2.2 0.7 r4.8 r1.9 3.2 r1.0 2.6 r-5.8 1.6 

2008 I 3.0 3.0 0.0 4.2 0.0 1.1 0.1 0.9 -5.5 0.1 

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

See footnotes following Table 6. June 4, 2008 

r=revised Source: Bureau of Labor Statistics 
16 

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 +1.4 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 2007. 

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 self-employed, 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 1978-2007 is based on the Consumer Price Index research series (CPI-U-RS). 

(3) Unit nonlabor payments include profits, consumption of fixed capital, taxes on production and imports 

less subsidies, net interest and miscellaneous payments, business current transfer payments, rental 

income of persons, and the current surplus of government enterprises. 

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

(5) Quarterly changes: Percent change compounded at annual rate is calculated using index numbers to 

three decimal places. Indexes published in the news release are rounded to one decimal place for 

convenience. Annual changes: Percent change is calculated using annual average indexes to three 

decimal places. 

(6) Unit nonlabor costs include consumption of fixed capital, taxes on production and imports less subsidies, 

net interest and miscellaneous payments, and business current transfer payments. 

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

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

adjustments.