Internet address: http://www.bls.gov/lpc/ USDL 04-1727 

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 2, 2004. 

(This release was reissued on Wednesday, October 13, 2004, to correct some errors 

in the data. Data for the second quarter 2004 for business, nonfarm business, and 

manufacturing were not affected. The Productivity and Costs news release of August 10, 

2004, which included revisions to historical measures, also contained some incorrect data. 

For more information, see www.bls.gov/lpc/note09022004.htm.) 

PRODUCTIVITY AND COSTS 

Second Quarter 2004 

 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 

2004. The seasonally adjusted annual rates of productivity change in the second quarter were: 

 1.5 percent in the business sector and 

 2.5 percent in the nonfarm business sector. 

In both sectors, increases in productivity were smaller than reported on Aug. 10, as output was 

revised down and hours were revised up. (See table C.) 

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

 6.9 percent in manufacturing, 

 4.9 percent in durable goods manufacturing, and 

 9.7 percent in nondurable goods manufacturing. 

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

estimate of 7.5 percent. Output and hours in manufacturing, which includes about 13 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. 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. 10 are shown in table C. 
2 

 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 9). 

Table A. Productivity and costs: Revised second-quarter 2004 measures 

(Seasonally adjusted annual rates) 

 

Sector 

Productivity Output Hours 

Hourly 

compensation 

Real 

hourly 

compensation 

Unit 

labor 

costs 

 Percent change from preceding quarter 

Business 1.5 3.2 1.6 3.7 -1.0 2.1 

Nonfarm business 2.5 3.5 1.0 4.3 -0.4 1.8 

Manufacturing 6.9 6.2 -0.6 3.2 -1.5 -3.5 

 Durable 4.9 5.9 1.0 2.3 -2.3 -2.5 

 Nondurable 9.7 6.3 c-3.1 c4.4 c-0.3 -4.8 

 Percent change from same quarter a year ago 

Business 4.0 5.4 1.3 4.0 1.1 0.0 

Nonfarm business 4.6 5.8 1.2 4.2 1.3 -0.3 

Manufacturing 5.8 5.7 -0.1 3.1 0.3 -2.5 

 Durable c7.1 8.4 c1.2 c2.1 -0.7 -4.7 

 Nondurable 4.7 2.6 -2.1 4.7 c1.8 0.0 

c=corrected 

Business 

 From the first quarter to the second quarter of 2004, productivity in the business sector 

grew at a 1.5 percent annual rate, as output increased 3.2 percent and hours worked by all 

persons engaged in the sector rose 1.6 percent (tables A and 1). The productivity increase marks 

a deceleration from the increases posted during the four quarters of 2003 and the first quarter of 

2004; it is the smallest increase since a 1.2-percent rise was posted in the fourth quarter of 2002 

(seasonally adjusted annual rates). 
3 

 Hourly compensation in the business sector increased 3.7 percent in the second quarter of 

2004, a faster rise than the 2.8 percent increase one quarter earlier (as revised). 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, fell 1.0 percent in the second quarter of 2004, after falling 0.8 percent in the 

first quarter of the year. The second-quarter decline was the largest since real hourly 

compensation fell 1.6 percent in the second quarter of 2000. 

 Unit labor costs rose 2.1 percent in the second quarter of 2004, after dropping 1.1 percent 

in the first quarter. The second-quarter rise was the fastest since the first quarter of 2001, when 

unit labor costs rose 7.4 percent. The implicit price deflator for the business sector rose 3.3 

percent in the second quarter, up from a 2.1-percent rise in the first quarter. The second-quarter 

increase also was the fastest in recent years; the last comparable increase in the implicit price 

deflator occurred when it rose 3.4 percent in the first quarter of 2000. 

Nonfarm business 

 Productivity in the nonfarm business sector grew at a 2.5 percent annual rate in the 

second quarter of 2004, as output grew 3.5 percent and hours of all persons increased 1.0 percent 

(table A). In the first quarter of 2004, output per hour in the nonfarm business sector had risen 

3.7 percent, as output and hours rose 5.7 and 2.0 percent, respectively (table 2). As in the larger 

business sector, the second-quarter increase in labor productivity was the smallest since the 

fourth quarter of 2002. 

 Hourly compensation rose 4.3 percent in the second quarter of 2004, following a 2.0 

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

real hourly compensation declined by 0.4 percent in the second quarter of 2004. 

 Unit labor costs increased 1.8 percent in the second quarter of 2004; they had fallen 1.6 

percent in the first quarter. The implicit price deflator for nonfarm business output rose 2.9 

percent in the second quarter of 2004 and 2.0 percent one quarter earlier. The second quarter 

increase was the biggest since the first quarter of 2000, when it rose 3.3 percent (seasonally 

adjusted annual rates). 

Manufacturing

 In the second quarter of 2004, productivity increased 6.9 percent in manufacturing, as 

output grew 6.2 percent and hours of all persons fell 0.6 percent (seasonally adjusted annual 

rates). In the durable goods sector, productivity grew 4.9 percent in the second quarter of 2004, 

reflecting an increase in output of 5.9 percent and growth in hours of 1.0 percent. In nondurable 

goods, output per hour rose 9.7 percent, reflecting an output increase of 6.3 percent and a 3.1 

percent drop in hours at work (tables 3, 4, and 5). The 9.7-percent increase in nondurable goods 

manufacturing productivity was the largest reported since a 12.6 percent rise in the fourth quarter 

of 1999. 
4 

 The hourly compensation of all manufacturing workers increased 3.2 percent during the 

second quarter of 2004, reflecting a 2.3-percent rise in hourly compensation in durable goods 

industries and a 4.4-percent increase in the nondurable goods sector. Real hourly compensation 

in the total manufacturing sector fell 1.5 percent in the second quarter, after decreasing 7.4 

percent one quarter earlier. 

 Unit labor costs in manufacturing dropped 3.5 percent in the second quarter of 2004, less 

than the 6.6 percent decline in the first quarter. Unit labor costs fell 2.5 percent in durable goods 

and 4.8 percent in nondurable goods in the second quarter of 2004. 

Nonfinancial corporations

Preliminary second quarter 2004 measures of productivity and costs were reported today 

for nonfinancial corporations (tables B and 6). Productivity increased 1.4 percent during the 

second quarter, as output increased 3.2 percent and hours grew 1.8 percent (seasonally adjusted 

annual rates). In the first quarter of 2004, output per hour rose 0.1 percent (as revised), 

reflecting increases of 2.9 percent in output and 2.8 percent in hours of all employees. 

Nonfinancial corporations include all corporations doing business in the United States except 

those classified as offices in the finance and insurance sector, offices of bank holding companies, 

or offices of other holding companies. 

Table B. Nonfinancial corporations: Preliminary second-quarter 2004 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 

2004 II 1.4 3.2 1.8 4.0 -0.7 2.6 16.6 3.7 

Percent change from same quarter a year ago 

2004 II 3.9 5.4 1.4 4.1 1.2 0.2 20.0 1.6 

Hourly compensation rose 4.0 percent in the second quarter of 2004, following a 2.3 

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

hourly compensation fell in both the first and second quarters of 2004, 0.7 percent in the second 

quarter and 1.3 percent one quarter earlier. 
5 

 Unit labor costs for nonfinancial corporations rose 2.6 percent in the second quarter of 

2004 and 2.1 percent in the first quarter, following declines in seven of the previous eight 

quarters. Unit profits grew at a 16.6 percent annual rate in the second quarter of 2004, similar to 

the 16.9-percent growth in the first quarter. The implicit price deflator for nonfinancial 

corporate output grew 3.7 percent in the second quarter of 2004. 
6 

Revised Measures 

 Current and previous measures for the second quarter of 2004 for the business, nonfarm 

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

from those reported on Aug. 10 based on information then available. In the business and 

nonfarm business sectors, productivity and hourly compensation were revised down; unit labor 

costs also grew less than reported last month. In the manufacturing sector, productivity and 

hourly compensation were revised down, and unit labor costs declined more than reported last 

month. 

Table C. Business, nonfarm business, and manufacturing: Previous and revised productivity and 

related measures 

(Quarterly percent changes at seasonally adjusted annual rates) 

 

Sector 

Productivity Output Hours 

Hourly 

compensation 

Real 

hourly 

compensation 

Unit 

labor 

costs 

 Second quarter 2004 

Business: 

 Previous ....................... 1.9 3.5 1.5 4.2 -0.5 2.2 

 Current ......................... 1.5 3.2 1.6 3.7 -1.0 2.1 

Nonfarm business: 

 Previous ....................... 2.9 3.8 0.8 4.9 0.1 1.9 

 Current ......................... 2.5 3.5 1.0 4.3 -0.4 1.8 

Manufacturing: 

 Previous ....................... 7.5 6.6 -0.9 5.2 0.5 -2.2 

 Current ......................... 6.9 6.2 -0.6 3.2 -1.5 -3.5 

 First quarter 2004 

Business: 

 Previous ....................... 3.9 5.3 1.3 4.8 1.1 0.8 

 Current ......................... 3.9 5.3 1.3 2.8 -0.8 -1.1 

Nonfarm business: 

 Previous ....................... 3.7 5.7 2.0 4.0 0.3 0.3 

 Current ......................... 3.7 5.7 2.0 2.0 -1.6 -1.6 

Manufacturing: 

 Previous ....................... 2.8 6.2 3.3 4.8 1.2 2.0 

 Current ......................... c2.7 6.2 c3.4 c-4.1 c-7.4 -6.6 

c=corrected 

Hourly compensation growth in the first quarter also was revised to reflect revised 

estimates of compensation. In the business and nonfarm business sectors, hourly compensation 

grew much more slowly in the first quarter than reported on Aug. 10. As a result, unit labor 

costs in these sectors now show declines in the first quarter of 1.1 and 1.6 percent, respectively. 

In the manufacturing sector, revised data show that hourly compensation fell 4.1 percent in the 

first quarter, and unit labor costs dropped 6.6 percent. 
7 

 Measures of hours for all of the major sectors were revised on Aug. 10, 2004, to 

incorporate new estimates of average weekly hours at work for supervisory and nonproduction 

workers. Ratios of the average weekly hours at work for these employees relative to those of 

nonsupervisory and production workers were developed from data in the Current Population 

Survey. These ratios were applied to average weekly hours at work for nonsupervisory and 

production workers developed from data in the Current Employment Statistics and Employment 

Cost Index programs. 

An article discussing these new measures and the effects of this change was published in 

the April 2004 issue of the Monthly Labor Review. A link to a technical note describing the 

methodology will be posted shortly on the BLS labor productivity home page 

(www.bls.gov/lpc/). Copies of the technical note also will be available by calling 202-691-5604, 

sending an email to dprweb@bls.gov, or writing to the Bureau of Labor Statistics, Division of 

Major Sector Productivity, Room 2150, Washington DC 20212. 

Revised Measures: Nonfinancial Corporations 

Data for the first quarter of 2004 were revised for the nonfinancial corporate sector. 

Productivity, output, hourly compensation, and unit labor costs grew more slowly than reported 

on Aug. 10. 

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 

 First quarter 2004 

Previous ........... 1.3 4.1 2.7 4.1 0.5 2.7 15.5 2.1 

Current ............. c0.1 2.9 c2.8 2.3 -1.3 2.1 16.9 2.1 

c=corrected 

UUpcoming changes

Late in 2004 or early in 2005, BLS will improve the way it uses data for farm workers, 

the nonfarm self employed, and nonfarm unpaid family workers in the productivity program, 

adjusting them to account for the effects of multiple jobholding. Further information on this 

change will be announced later this year. 
8 

Next release date 

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

Nov. 4, 2004. Preliminary third-quarter measures for business, nonfarm business, and 

manufacturing will be released at that time. 
9 

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 years prior to 2001. 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. 

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

gross domestic product (GDP) the following 

outputs: general government, nonprofit institutions, and private households (including owneroccupied 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 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 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 manufacturing. Nondurables include: food manufacturing; beverage and tobacco product manufacturing; 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 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; private households; unincorporated 

business; and those corporations classified as 

offices of bank 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. 

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 

 2002 I 122.7 142.2 115.9 143.2 115.2 116.7 113.4 115.5 

 II 123.2 142.9 116.0 144.4 115.2 117.2 113.6 115.9 

 III 124.7 144.3 115.7 145.0 115.0 116.3 115.7 116.1 

 IV 125.0 144.7 115.7 145.5 114.8 116.3 116.8 116.5 

 ANNUAL 123.9 143.5 115.8 144.5 115.0 116.6 114.9 116.0 

 2003 I 126.2 145.5 115.3 147.4 115.3 116.8 117.7 117.1 

 II 128.6 147.5 114.7 149.6 116.8 116.4 119.0 117.3 

 III 131.2 150.8 114.9 151.7 117.7 115.6 120.8 117.5 

 IV 132.0 152.3 115.4 153.2 118.7 116.0 120.7 117.8 

 ANNUAL 129.5 149.0 115.1 150.5 117.1 116.2 119.6 117.4 

 2004 I 133.3 154.3 115.8 r154.2 r118.4 r115.7 r122.9 118.4 

 II r133.8 r155.5 r116.3 r155.6 r118.1 r116.3 r124.4 r119.4 

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

 Percent change from previous quarter at annual rate(5) 

 2002 I 5.9 3.5 -2.3 4.9 3.5 -1.0 1.0 -0.3 

 II 1.7 2.1 0.4 3.4 -0.1 1.7 1.0 1.4 

 III 4.8 3.8 -1.0 1.6 -0.7 -3.1 7.3 0.7 

 IV 1.2 1.2 0.0 1.3 -0.6 0.0 3.8 1.4 

 ANNUAL 4.3 1.8 -2.4 3.2 1.5 -1.1 4.5 0.9 

 2003 I 3.9 2.2 -1.6 5.5 1.7 1.6 3.1 2.1 

 II 7.6 5.6 -1.9 6.1 5.4 -1.4 4.5 0.8 

 III 8.5 9.3 0.7 5.6 3.1 -2.6 6.3 0.7 

 IV 2.4 4.2 1.7 4.0 3.3 1.6 -0.4 0.8 

 ANNUAL 4.5 3.8 -0.7 4.1 1.8 -0.4 4.1 1.3 

 2004 I 3.9 5.3 1.3 r2.8 r-0.8 r-1.1 r7.4 2.1 

 II r1.5 r3.2 r1.6 r3.7 r-1.0 r2.1 r5.1 r3.3 

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

 Percent change from corresponding quarter of previous year 

 2002 I 4.9 0.8 -3.9 3.2 1.9 -1.6 6.6 1.2 

 II 4.0 1.1 -2.8 3.4 2.1 -0.6 3.5 0.9 

 III 4.9 2.8 -2.0 3.3 1.6 -1.6 c5.0 0.8 

 IV 3.4 2.7 -0.7 2.8 0.5 -0.6 3.2 0.8 

 ANNUAL 4.3 1.8 -2.4 3.2 1.5 -1.1 4.5 0.9 

 2003 I 2.9 2.3 -0.6 2.9 0.1 0.0 3.8 1.4 

 II 4.4 3.2 -1.1 3.6 1.4 -0.7 4.7 1.3 

 III 5.3 4.5 -0.7 4.6 2.4 -0.6 4.4 1.3 

 IV 5.6 5.3 -0.3 5.3 c3.4 -0.3 3.4 1.1 

 ANNUAL 4.5 3.8 -0.7 4.1 1.8 -0.4 4.1 1.3 

 2004 I 5.6 6.1 0.5 r4.6 r2.7 r-0.9 r4.4 1.1 

 II r4.0 r5.4 1.3 r4.0 r1.1 r0.0 r4.6 1.7 

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

 See footnotes following Table 6. Sept. 2, 2004 corrected 

 r=revised Source: Bureau of Labor Statistics 

 c=corrected 
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 

 2002 I 122.4 142.6 116.5 142.6 114.7 116.4 115.1 116.0 

 II 122.8 143.2 116.7 143.8 114.7 117.1 115.4 116.5 

 III 124.1 144.5 116.4 144.3 114.4 116.2 117.7 116.8 

 IV 124.6 145.0 116.4 144.7 114.3 116.1 118.9 117.2 

 ANNUAL 123.5 143.9 116.5 143.8 114.5 116.5 116.8 116.6 

 2003 I 125.8 145.9 116.0 146.6 114.7 116.6 119.6 117.7 

 II 127.8 147.8 115.6 148.7 116.1 116.3 120.4 117.8 

 III 130.6 151.1 115.7 150.9 117.1 115.5 122.3 118.0 

 IV 131.7 152.8 116.1 152.5 118.2 115.9 121.9 118.1 

 ANNUAL 129.0 149.4 115.8 149.7 116.5 116.1 121.1 117.9 

 2004 I 132.8 155.0 116.7 r153.3 r117.7 r115.4 r124.3 118.7 

 II r133.7 r156.3 116.9 r154.9 r117.6 r115.9 r125.7 119.5 

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

 Percent change from previous quarter at annual rate(5) 

 2002 I 6.9 4.0 -2.7 5.5 4.1 -1.4 1.6 -0.3 

 II 1.1 1.7 0.6 3.4 -0.1 2.3 1.0 1.8 

 III 4.5 3.6 -0.9 1.5 -0.8 -2.9 8.0 1.0 

 IV 1.6 1.4 -0.2 1.2 -0.6 -0.3 4.2 1.3 

 ANNUAL 4.4 1.8 -2.5 3.3 1.6 -1.1 4.7 1.0 

 2003 I 3.7 2.4 -1.3 c5.3 1.5 1.6 2.4 1.9 

 II 6.7 5.3 -1.4 5.7 5.0 -1.0 2.9 0.5 

 III 9.0 9.3 0.3 6.1 3.6 -2.7 6.3 0.6 

 IV 3.1 4.6 1.4 4.4 3.6 1.2 -1.2 0.3 

 ANNUAL 4.4 3.8 -0.6 4.1 1.7 -0.4 3.7 1.1 

 2004 I 3.7 5.7 2.0 r2.0 r-1.6 r-1.6 r8.0 2.0 

 II r2.5 r3.5 r1.0 r4.3 r-0.4 r1.8 r4.7 r2.9 

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

 Percent change from corresponding quarter of previous year 

 2002 I 5.1 0.9 -4.0 3.2 2.0 -1.8 6.7 1.2 

 II 4.0 1.0 -2.9 3.5 2.2 -0.5 3.4 0.9 

 III 4.8 2.6 -2.1 3.4 1.7 -1.3 5.2 1.0 

 IV 3.5 2.7 -0.8 2.9 0.6 -0.6 3.7 1.0 

 ANNUAL 4.4 1.8 -2.5 3.3 1.6 -1.1 4.7 1.0 

 2003 I 2.7 2.3 -0.5 2.9 0.0 0.1 3.9 1.5 

 II 4.1 3.2 -0.9 3.4 1.2 -0.7 4.4 1.2 

 III 5.2 4.6 c-0.7 4.6 2.4 -0.6 3.9 1.1 

 IV 5.6 5.4 -0.2 5.4 3.4 -0.2 2.5 0.8 

 ANNUAL 4.4 3.8 -0.6 4.1 1.7 -0.4 3.7 1.1 

 2004 I 5.6 6.2 0.6 r4.5 r2.6 r-1.0 r3.9 0.8 

 II r4.6 r5.8 r1.2 r4.2 r1.3 r-0.3 r4.4 r1.5 

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

 See footnotes following Table 6. Sept. 2, 2004 corrected 

 r=revised Source: Bureau of Labor Statistics 

 c=corrected 
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 

 2002 I 143.8 130.5 90.7 144.1 115.9 100.2 

 II 145.7 131.8 90.4 147.0 117.2 100.8 

 III 147.8 132.4 89.5 148.6 117.8 100.5 

 IV 148.8 131.3 88.2 149.9 118.3 100.7 

 ANNUAL 146.5 131.5 89.7 c147.4 117.3 100.6 

 2003 I 151.0 131.3 87.0 155.7 121.8 103.1 

 II 152.1 130.1 85.6 158.5 123.8 104.2 

 III c156.0 131.5 84.3 161.6 c125.5 103.6 

 IV 157.2 133.5 84.9 163.9 127.0 104.2 

 ANNUAL c154.1 131.6 c85.4 159.9 124.5 103.8 

 2004 I 158.3 135.5 85.6 r162.2 cr124.5 r102.5 

 II r160.9 r137.6 r85.5 r163.5 r124.1 r101.6 

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

 Percent change from previous quarter at annual rate(5) 

 2002 I 10.0 2.5 -6.9 14.2 12.7 3.8 

 II 5.4 4.0 -1.3 8.2 4.5 2.6 

 III 5.9 1.7 c-3.9 4.5 c2.1 -1.3 

 IV c2.8 -3.1 -5.7 3.5 c1.6 0.7 

 ANNUAL 7.0 -0.6 -7.1 6.7 5.0 -0.3 

 2003 I 6.0 0.1 -5.6 16.6 c12.3 10.0 

 II c2.9 -3.6 c-6.3 c7.4 c6.7 4.4 

 III c10.6 4.3 -5.7 8.1 c5.6 -2.2 

 IV 3.3 6.2 c2.8 5.7 4.9 2.3 

 ANNUAL 5.1 0.1 -4.8 8.5 6.1 3.2 

 2004 I c2.7 6.2 c3.4 cr-4.1 cr-7.4 r-6.6 

 II r6.9 r6.2 r-0.6 r3.2 r-1.5 r-3.5 

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

 Percent change from corresponding quarter of previous year 

 2002 I 6.6 -3.4 -9.4 4.1 2.8 -2.4 

 II 7.3 -1.1 -7.9 7.0 5.6 -0.3 

 III 8.0 0.9 -6.6 8.2 6.5 0.2 

 IV 6.0 1.2 -4.5 7.5 5.1 1.4 

 ANNUAL 7.0 -0.6 -7.1 6.7 5.0 -0.3 

 2003 I 5.0 0.6 -4.2 8.1 5.1 2.9 

 II 4.4 -1.3 -5.4 7.9 5.6 3.3 

 III 5.5 -0.6 -5.8 8.8 c6.5 3.1 

 IV 5.6 1.7 c-3.8 9.4 7.3 3.5 

 ANNUAL 5.1 0.1 -4.8 8.5 6.1 3.2 

 2004 I 4.8 3.2 -1.5 r4.2 r2.3 r-0.6 

 II r5.8 r5.7 r-0.1 r3.1 r0.3 r-2.5 

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

 See footnotes following Table 6. Sept. 2, 2004 corrected 

 r=revised Source: Bureau of Labor Statistics 

 c=corrected 
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 

 2002 I c161.4 152.6 94.6 c142.2 114.4 88.1 

 II 163.9 154.7 94.4 145.2 115.8 88.6 

 III c167.0 155.9 c93.4 c146.4 c116.1 87.7 

 IV 170.5 156.1 c91.5 147.7 116.6 86.6 

 ANNUAL c165.7 154.8 93.5 c145.4 115.7 87.7 

 2003 I c173.6 156.6 90.2 154.9 c121.1 89.2 

 II 175.0 155.1 c88.7 157.9 123.3 90.2 

 III 181.5 158.3 87.2 161.2 125.1 88.8 

 IV c183.3 161.9 88.3 c163.4 126.5 89.1 

 ANNUAL 178.3 158.0 88.6 159.3 124.0 89.3 

 2004 I c185.2 165.7 c89.5 r160.4 cr123.1 r86.6 

 II r187.5 r168.1 c89.7 cr161.3 cr122.4 r86.0 

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

 Percent change from previous quarter at annual rate(5) 

 2002 I c11.7 2.8 c-8.0 c8.4 c7.0 -2.9 

 II c6.3 5.5 c-0.7 c8.6 c5.0 2.2 

 III c7.9 3.3 c-4.3 c3.5 c1.1 -4.1 

 IV c8.7 0.4 c-7.6 c3.6 c1.7 -4.7 

 ANNUAL 8.3 -0.7 -8.3 c5.6 3.9 -2.5 

 2003 I c7.4 1.4 c-5.6 c20.8 c16.4 12.5 

 II c3.1 -3.9 c-6.8 c8.0 c7.3 4.7 

 III 15.8 8.4 -6.3 c8.7 6.1 -6.1 

 IV c4.1 9.4 c5.1 c5.5 c4.7 1.3 

 ANNUAL 7.6 2.0 -5.2 9.6 7.1 1.8 

 2004 I c4.3 9.9 c5.4 cr-7.1 cr-10.4 r-10.9 

 II r4.9 r5.9 r1.0 r2.3 r-2.3 r-2.5 

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

 Percent change from corresponding quarter of previous year 

 2002 I c7.1 -4.9 c-11.2 c3.3 c2.0 -3.6 

 II c8.3 -1.8 c-9.3 6.0 4.7 -2.0 

 III c9.2 1.2 -7.3 7.0 c5.2 -2.0 

 IV 8.6 3.0 c-5.2 c6.0 c3.7 -2.4 

 ANNUAL 8.3 -0.7 -8.3 c5.6 3.9 -2.5 

 2003 I 7.6 2.6 c-4.6 c8.9 5.9 1.2 

 II 6.8 0.3 -6.1 c8.7 6.5 1.9 

 III c8.7 1.5 -6.6 10.1 7.7 1.3 

 IV 7.5 3.7 -3.5 10.6 8.5 2.9 

 ANNUAL 7.6 2.0 -5.2 9.6 7.1 1.8 

 2004 I 6.7 5.8 c-0.8 cr3.5 r1.7 r-3.0 

 II cr7.1 r8.4 c1.2 cr2.1 r-0.7 r-4.7 

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

 See footnotes following Table 6. Sept. 2, 2004 corrected 

 r=revised Source: Bureau of Labor Statistics 

 c=corrected 
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 

 2002 I c126.1 107.2 85.0 c146.2 c117.6 116.0 

 II 127.5 107.8 84.5 148.8 118.7 116.7 

 III 128.5 107.7 c83.8 c151.2 c119.9 117.6 

 IV c126.9 105.7 c83.3 c152.5 c120.4 120.2 

 ANNUAL 127.3 107.1 c84.2 c149.6 c119.1 117.6 

 2003 I 128.2 105.3 82.1 c155.9 121.9 121.6 

 II 129.0 104.4 81.0 158.3 123.6 122.7 

 III 130.4 104.3 80.0 161.1 125.0 123.5 

 IV 131.5 105.0 c79.9 c163.3 c126.5 124.2 

 ANNUAL c129.8 104.8 80.7 159.6 124.2 123.0 

 2004 I c132.0 105.5 c79.9 cr163.9 cr125.9 r124.2 

 II cr135.1 r107.1 r79.3 r165.7 cr125.8 r122.7 

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

 Percent change from previous quarter at annual rate(5) 

 2002 I c7.4 2.0 c-5.1 c26.5 c24.9 17.7 

 II c4.6 2.2 c-2.3 c7.2 c3.6 2.5 

 III c3.2 -0.2 c-3.3 c6.6 c4.1 3.2 

 IV c-4.9 -7.3 c-2.5 c3.7 c1.8 9.0 

 ANNUAL 4.8 -0.6 -5.2 9.3 c7.5 4.3 

 2003 I c4.2 -1.5 c-5.5 c9.1 c5.1 c4.7 

 II c2.3 -3.2 -5.5 c6.3 5.7 3.9 

 III 4.4 -0.4 -4.6 7.2 4.7 2.7 

 IV c3.4 2.6 c-0.7 c5.6 c4.8 2.2 

 ANNUAL c2.0 -2.2 c-4.1 c6.7 c4.3 4.6 

 2004 I c1.6 1.8 c0.2 cr1.5 cr-2.0 r0.0 

 II r9.7 r6.3 cr-3.1 cr4.4 cr-0.3 r-4.8 

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

 Percent change from corresponding quarter of previous year 

 2002 I c5.0 -1.7 c-6.4 c6.2 c5.0 1.2 

 II c5.3 -0.4 c-5.4 c9.2 7.9 3.7 

 III c6.2 0.5 c-5.4 c10.9 c9.2 4.5 

 IV c2.5 -0.9 c-3.3 c10.6 c8.2 8.0 

 ANNUAL 4.8 -0.6 -5.2 9.3 c7.5 4.3 

 2003 I c1.7 -1.8 c-3.4 c6.6 c3.6 4.8 

 II c1.2 -3.1 -4.2 6.4 c4.2 5.2 

 III 1.5 -3.1 c-4.5 6.6 4.3 5.0 

 IV 3.6 -0.7 -4.1 c7.1 5.1 3.3 

 ANNUAL c2.0 -2.2 c-4.1 c6.7 c4.3 4.6 

 2004 I 2.9 0.2 c-2.7 cr5.2 cr3.3 r2.2 

 II r4.7 r2.6 -2.1 r4.7 cr1.8 r0.0 

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

 See footnotes following Table 6. Sept. 2, 2004 corrected 

 r=revised Source: Bureau of Labor Statistics 

 c=corrected 
15 

 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 

 2002 I 126.3 149.7 118.5 139.9 112.6 110.8 114.0 111.6 89.1 109.6 

 II 127.9 151.4 118.4 141.3 112.7 110.5 112.9 111.2 94.7 109.7 

 III 129.2 152.3 117.9 142.1 112.7 110.0 112.7 110.7 95.7 109.4 

 IV 130.2 153.1 117.6 142.9 112.8 109.7 112.3 110.4 101.8 109.6 

 ANNUAL 128.4 151.6 118.1 141.5 112.7 110.2 113.0 111.0 95.4 109.6 

 2003 I 131.3 153.4 116.8 144.1 112.7 109.8 113.2 110.7 99.2 109.7 

 II 134.1 156.1 116.4 146.3 114.2 109.1 111.4 109.7 111.0 109.8 

 III 137.2 159.4 116.2 148.5 115.3 108.2 111.1 109.0 118.7 109.9 

 IV 138.9 162.0 116.7 150.0 116.2 108.0 110.5 108.7 123.2 110.0 

 ANNUAL 135.4 157.7 116.5 147.3 114.6 108.8 111.5 109.5 113.2 109.8 

 2004 I r138.9 r163.2 117.5 r150.9 r115.9 r108.6 r109.5 r108.8 r128.1 110.6 

 II 139.4 164.5 118.0 152.4 115.7 109.3 109.9 109.5 133.1 111.6 

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

 Percent change from previous quarter at annual rate(5) 

 2002 I 7.9 5.7 -2.0 1.7 0.4 -5.8 -7.3 -6.2 90.8 -1.6 

 II 4.9 4.8 -0.1 4.0 0.4 -0.9 -3.7 -1.7 27.4 0.2 

 III 4.1 2.3 -1.7 2.3 0.0 -1.7 -0.9 -1.5 4.5 -1.0 

 IV 3.4 2.1 -1.2 2.2 0.3 -1.1 -1.4 -1.2 28.1 0.9 

 ANNUAL 4.4 1.5 -2.8 3.1 1.4 -1.3 -0.2 -1.0 15.4 0.1 

 2003 I 3.2 0.6 -2.5 3.6 -0.2 0.4 3.0 1.1 -10.0 0.1 

 II 9.1 7.4 -1.5 6.2 5.5 -2.6 -6.2 -3.6 56.4 0.5 

 III 9.4 8.8 -0.6 6.2 3.6 -3.0 -1.0 -2.5 30.8 0.2 

 IV 5.0 6.7 1.6 4.2 3.4 -0.8 -2.1 -1.2 16.1 0.4 

 ANNUAL 5.4 4.0 -1.3 4.0 1.7 -1.3 -1.3 -1.3 18.7 0.2 

 2004 I cr0.1 r2.9 c2.8 r2.3 r-1.3 r2.1 r-3.5 r0.6 r16.9 2.1 

 II 1.4 3.2 1.8 4.0 -0.7 2.6 1.6 2.3 16.6 3.7 

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

 Percent change from corresponding quarter of previous year 

 2002 I 3.4 -1.1 -4.3 3.2 2.0 -0.2 4.0 0.9 1.5 1.0 

 II 4.2 0.8 -3.2 3.4 2.1 -0.8 0.6 -0.4 8.4 0.2 

 III 5.0 2.5 -2.4 3.1 1.4 -1.8 -1.7 -1.8 20.6 -0.4 

 IV 5.1 3.7 -1.3 2.5 0.3 -2.4 -3.3 -2.7 34.3 -0.4 

 ANNUAL 4.4 1.5 -2.8 3.1 1.4 -1.3 -0.2 -1.0 15.4 0.1 

 2003 I 3.9 2.5 -1.4 3.0 0.1 -0.9 -0.8 -0.8 11.3 0.1 

 II 4.9 3.1 -1.7 3.6 1.4 -1.3 -1.4 -1.3 17.2 0.1 

 III 6.2 4.7 -1.5 4.5 2.3 -1.6 -1.4 -1.6 23.9 0.4 

 IV 6.6 5.8 -0.8 5.0 3.1 -1.5 -1.6 -1.6 20.9 0.3 

 ANNUAL 5.4 4.0 -1.3 4.0 1.7 -1.3 -1.3 -1.3 18.7 0.2 

 2004 I r5.9 r6.4 0.5 r4.7 r2.8 r-1.1 r-3.2 -1.7 r29.1 0.8 

 II 3.9 5.4 1.4 4.1 1.2 0.2 -1.3 -0.2 20.0 1.6 

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

 See footnotes following Table 6. Sept. 2, 2004 corrected 

 r=revised Source: Bureau of Labor Statistics 

 c=corrected 
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 –1.4 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 first quarter of 2004. 

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 1978-2003 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 from the original data rather 

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

(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.