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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 THURSDAY, SEPTEMBER 5, 2002. 

PRODUCTIVITY AND COSTS 

Second Quarter 2002 

 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 

2002. The seasonally adjusted annual rates of productivity change in the second quarter were: 

 1.7 percent in the business sector and 

 1.5 percent in the nonfarm business sector. 

In both sectors, increases in productivity were larger than reported on Aug. 9, due primarily to 

upward revisions to output. (See table C.) 

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

 4.3 percent in manufacturing, 

 6.0 percent in durable goods manufacturing, and 

 2.6 percent in nondurable goods manufacturing. 

 In total manufacturing, the change in productivity was revised to show an increase of 4.3 

percent in the second quarter, compared with the preliminary estimate of 4.9 percent. Output and 

hours in manufacturing, which includes about 16 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. 9 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 6). 
2 

 

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

(Seasonally adjusted annual rates) 

 

Sector 

Productivity Output Hours 

Hourly 

compensation 

Real 

hourly 

compensation 

Unit 

labor 

costs 

 Percent change from preceding quarter 

Business 1.7 0.5 -1.2 4.0 0.5 2.3 

Nonfarm business 1.5 0.8 -0.7 3.7 0.2 2.1 

Manufacturing 4.3 3.6 -0.7 3.0 -0.4 -1.2 

 Durable 6.0 5.4 -0.6 2.8 -0.6 -3.1 

 Nondurable 2.6 1.8 -0.8 3.4 0.0 0.8 

 Percent change from same quarter a year ago 

Business 4.8 2.2 -2.5 2.5 1.2 -2.2 

Nonfarm business 4.8 2.2 -2.5 2.4 1.1 -2.3 

Manufacturing 5.2 -1.2 -6.1 3.4 2.1 -1.6 

 Durable 6.0 -1.9 -7.4 3.5 2.2 -2.3 

 Nondurable 3.8 -0.3 -4.0 3.5 2.2 -0.3 

Business 

 From the first to the second quarter of 2002, business sector productivity rose at a 1.7 

percent annual rate, as output increased 0.5 percent and hours of all persons engaged in the sector 

decreased 1.2 percent (tables A and 1). In the first quarter of 2002, productivity had increased 

8.3 percent when output increased 5.9 percent and hours fell 2.2 percent. 

 A 4.0-percent rise in hourly compensation in the second quarter of 2002 was similar to 

the 3.8-percent increase 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 0.5 percent in the second quarter of 2002, after rising 2.3 percent in 

the first quarter. 

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

Unit labor costs increased 2.3 percent in the second quarter of 2002, after falling 4.2 percent in 

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

sector rose 0.5 percent in the second quarter, as the increase in unit labor costs was partially 

offset by a 2.2 percent drop in unit nonlabor payments. 
3 

 

Nonfarm business 

 Productivity in the nonfarm business sector increased 1.5 percent during the second 

quarter of 2002, as output rose 0.8 percent and hours of all persons declined 0.7 percent 

(table A). In the first quarter of 2002, output per hour in the nonfarm business sector had 

increased 8.6 percent, as output grew 6.2 percent and hours fell 2.2 percent (table 2). 

 Hourly compensation grew at a 3.7 percent annual rate in the second quarter of 2002, 

following a 3.6 percent increase in the first quarter. When the rise in consumer prices is taken 

into account, real hourly compensation increased 0.2 percent in the second quarter of 2002. 

 Unit labor costs increased 2.1 percent in the second quarter of 2002. This measure had 

decreased 4.6 percent in the first quarter. Unit nonlabor payments edged down 0.1 percent in the 

second quarter of 2002, and the implicit price deflator for nonfarm business output rose 1.3 

percent (seasonally adjusted annual rates). 

Manufacturing

 In the second quarter of 2002, productivity increased 4.3 percent in manufacturing, as 

output increased 3.6 percent and hours of all persons declined 0.7 percent (seasonally adjusted 

annual rates). Hours worked in manufacturing had the smallest decline since the second quarter 

of 2000, when they increased 0.5 percent. In the durable goods sector, productivity grew 6.0 

percent in the second quarter of 2002, as output grew 5.4 percent and hours declined 0.6 percent. 

In nondurable goods, output per hour rose 2.6 percent as output increased 1.8 percent and hours 

decreased 0.8 percent (tables 3, 4, and 5). 

 The hourly compensation of all manufacturing workers increased 3.0 percent during the 

second quarter of 2002, reflecting a 2.8-percent rise in hourly compensation in durable goods 

industries and a 3.4-percent increase in the nondurable goods sector. Real hourly compensation 

in the total manufacturing sector declined 0.4 percent in the second quarter, after increasing 5.4 

percent one quarter earlier. 

 Unit labor costs in manufacturing fell 1.2 percent in the second quarter of 2002. This was 

the fourth consecutive quarterly decline in the series. Unit labor costs decreased 3.1 percent in 

durable goods and increased 0.8 percent in nondurable goods in the second quarter of 2002. 

Nonfinancial corporations

Preliminary second-quarter 2002 measures of productivity and costs also were announced 

today for nonfinancial corporations (tables B and 6). Productivity increased 5.0 percent during 

the second quarter, as output rose 4.4 percent and hours fell 0.6 percent (seasonally adjusted 

annual rates). The second-quarter drop in hours was the smallest since a decline of 0.5 percent in 

the fourth quarter of 2000. 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 2002 productivity and cost 

measures 

(Seasonally adjusted annual rates) 

 

Period 

Productivity Output Hours 

Hourly 

compensation 

Real 

hourly 

compensation 

Unit 

labor 

costs 

Unit 

profits 

Implicit 

price 

deflator 

 Percent change from preceding quarter 

2002 II 5.0 4.4 -0.6 4.2 0.8 -0.8 -3.7 -0.4 

Percent change from same quarter a year ago 

2002 II 6.0 3.3 -2.5 3.4 2.1 -2.5 11.5 -0.6 

Hourly compensation rose 4.2 percent in the second quarter of 2002, following a 

4.1 percent increase in the first quarter. When the rise in consumer prices is taken into 

account, real hourly compensation increased 0.8 percent in the second quarter and 2.6 

percent in the first quarter of 2002 (table 6). 

 Unit labor costs for nonfinancial corporations decreased 0.8 percent in the second 

quarter of 2002, similar to the 0.9-percent decline in the first quarter of the year. Unit 

profits fell 3.7 percent in the second quarter of 2002, after falling 0.6 percent in the first 

quarter. The implicit price deflator for nonfinancial corporate output edged down 0.4 

percent in the second quarter of 2002. 
5 

 

Revised Measures 

 Current and previous measures for the second quarter of 2002 for the business, nonfarm 

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

from those reported on Aug. 9 based on information then available. 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, as output grew less rapidly 

than originally reported. Unit labor costs in manufacturing fell less than reported on Aug. 9. 

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 2002 

Business: 

 Previous........................ 1.4 0.3 -1.1 3.9 0.5 2.4 

 Current ......................... 1.7 0.5 -1.2 4.0 0.5 2.3 

Nonfarm business: 

 Previous........................ 1.1 0.5 -0.7 3.6 0.2 2.4 

 Current ......................... 1.5 0.8 -0.7 3.7 0.2 2.1 

Manufacturing: 

 Previous........................ 4.9 4.1 -0.8 3.0 -0.4 -1.8 

 Current ......................... 4.3 3.6 -0.7 3.0 -0.4 -1.2 

Next release date 

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

Nov. 7, 2002. Preliminary third-quarter measures for business, nonfarm business, and 

manufacturing will be released at that time. 

Effective with the release of preliminary third-quarter 2002 data on Nov. 7, BLS will begin to 

issue revised measures of hourly compensation and unit labor costs for the previous two quarters. 

Currently, only the most recent quarter is revised. This practice will be followed whenever 

preliminary quarterly estimates are first announced. Measures for the nonfinancial corporate 

sector, including productivity and output, also will be subject to an additional quarter of 

revisions. This change is in accordance with the announcement by the Bureau of Economic 

Analysis of their new revision schedule for wage and salary data. See “National Income and 

Product Accounts” (BEA 02-23), released July 31. 
6 

 

TECHNICAL NOTES

Labor Hours: Hours data for the labor productivity 

and cost measures include hours for all persons 

working in the sector—wage and salary workers, 

the self-employed, and unpaid family workers. The 

primary source of hours and employment data is the 

BLS Current Employment Statistics (CES) program, which provides monthly survey data on the 

number of jobs held by wage and salary workers in 

nonfarm establishments. The CES also provides 

average weekly paid hours of production and nonsupervisory workers in these establishments. The 

Office of Productivity and Technology estimates 

average weekly paid hours of nonproduction and 

supervisory workers. Weekly paid hours are 

adjusted to hours at work using the BLS Hours at 

Work survey, conducted for this purpose. 

 Data from the BLS Current Population 

Survey (CPS) are used for farm labor; in the nonfarm sector, the National Income and Product 

Accounts (NIPA) prepared by the Bureau of 

Economic Analysis (BEA) of the Department of 

Commerce and the CPS are used to measure labor 

input for government enterprises, proprietors, and 

unpaid family workers. 

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

gross domestic product (GDP) the following outputs: General government, nonprofit institutions, 

paid employees of private households, and the 

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

Business output accounted for about 77 percent of 

the value of GDP in 1996. Nonfarm business, 

which also excludes farming, accounted for about 

76 percent of GDP in 1996. 

 Annual indexes for manufacturing and its 

durable and nondurable goods components are 

constructed by deflating current-dollar industry 

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

the Census with deflators from the BEA. These 

deflators are based on data from the BLS 

producer price program and other sources. The 

industry shipments are aggregated using annual 

weights, and intrasector transactions are removed. 

Quarterly manufacturing output measures are 

based on the index of industrial production prepared monthly by the Board of Governors of the 

Federal Reserve System adjusted to be consistent 

with annual indexes of manufacturing sector output prepared by BLS. Durables include the 

following 2-digit SIC industries: Primary metal 

industries; fabricated metal products; nonelectrical machinery; industrial and commercial 

machinery and computer equipment; electronic 

and other electrical equipment; transportation 

equipment; instruments; lumber and lumber 

products; furniture and fixtures; stone, clay, and 

glass and concrete products; and miscellaneous 

manufactures. Nondurables include: Food and 

kindred products, tobacco products, textile mill 

products, apparel products, paper and allied 

products, printing and publishing, chemicals and 

chemical products, petroleum refining and related 

industries, rubber and plastic products, and 

leather and leather products. 

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

incurred and the incomes earned from production. 

The output measure excludes the following outputs 

from GDP: general government; nonprofit institutions; employees of private households; the rental 

value of owner-occupied dwellings; unincorporated 

business; and those corporations which are depository institutions, nondepository institutions, security and commodity brokers, insurance carriers, 

regulated investment offices, small business 

investment offices, and real estate investment 

trusts. Nonfinancial corporations accounted for 

about 53 percent of the value of GDP in 1996. 

Productivity: These productivity measures 

describe the relationship between real output and 

the labor time involved in its production. They 

show the changes from period to period in the 

amount of goods and services produced per hour. 

Although these measures relate output to hours at 

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

measure the specific contribution of labor, capital, 

or any other factor of production. Rather, they 

reflect the joint effects of many influences, 

including changes in technology; capital 

investment; level of output; utilization of capacity, 

energy, and materials; the organization of 

production; managerial skill; and the characteristics 

and effort of the work force. 

 Information in this release will be made 

available to sensory-impaired individuals upon 

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

Service number: 1-800-877-8339.
7 

 

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

 and prices, seasonally adjusted 

 Real 

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

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

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

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

 Indexes 1992=100 

 2000 I 115.3 138.4 120.1 131.4 110.5 114.0 110.7 112.8 

 II 117.2 140.3 119.7 132.4 110.5 113.0 114.1 113.4 

 III 117.3 140.4 119.7 135.0 111.7 115.1 111.2 113.7 

 IV 117.9 140.7 119.4 136.3 111.9 115.6 112.0 114.3 

 ANNUAL 116.9 140.0 119.7 133.8 111.2 114.4 112.0 113.5 

 2001 I 117.5 140.4 119.5 137.3 111.8 116.9 112.3 115.2 

 II 117.4 139.4 118.7 137.5 111.0 117.1 113.6 115.8 

 III 117.9 139.1 117.9 137.8 111.1 116.8 115.5 116.4 

 IV 120.1 140.3 116.8 138.3 111.6 115.1 117.2 115.9 

 ANNUAL 118.2 139.8 118.2 137.7 111.4 116.5 114.7 115.8 

 2002 I 122.5 142.3 116.1 139.6 112.2 113.9 119.6 116.0 

 II 123.0 r142.5 115.8 140.9 r112.4 r114.5 118.9 r116.1 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 0.3 2.2 1.9 14.7 10.3 14.4 -15.1 2.4 

 II 6.7 5.4 -1.2 3.0 0.0 -3.5 12.9 2.2 

 III 0.4 0.4 0.0 8.3 4.6 7.8 -9.6 1.1 

 IV 2.1 0.9 -1.2 3.7 0.7 1.6 2.6 1.9 

 ANNUAL 3.0 4.1 1.0 6.8 3.4 3.7 -1.7 1.7 

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

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

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

 IV 7.6 3.5 -3.9 1.4 1.7 -5.8 6.1 -1.6 

 ANNUAL 1.1 -0.2 -1.3 2.9 0.2 1.8 2.4 2.0 

 2002 I 8.3 5.9 -2.2 3.8 2.3 -4.2 8.3 0.3 

 II r1.7 r0.5 r-1.2 r4.0 0.5 r2.3 r-2.2 r0.5 

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

 Percent change from corresponding quarter of previous year 

 2000 I 2.3 4.6 2.3 5.9 2.5 3.5 -2.0 1.4 

 II 4.1 5.4 1.3 6.5 3.1 2.3 0.8 1.7 

 III 3.3 4.1 0.7 7.7 4.1 4.3 -2.5 1.7 

 IV 2.4 2.2 -0.1 7.3 3.8 4.9 -2.9 1.9 

 ANNUAL 3.0 4.1 1.0 6.8 3.4 3.7 -1.7 1.7 

 2001 I 1.9 1.4 -0.5 4.5 1.2 2.6 1.4 2.2 

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

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

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

 ANNUAL 1.1 -0.2 -1.3 2.9 0.2 1.8 2.4 2.0 

 2002 I 4.3 1.4 -2.8 1.6 0.4 -2.6 6.5 0.7 

 II r4.8 2.2 -2.5 2.5 1.2 -2.2 r4.7 0.3 

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

 See footnotes following Table 6. September 5, 2002 

 r=revised Source: Bureau of Labor Statistics 
8 

 

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

 and prices, seasonally adjusted 

 Real 

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

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

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

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

 Indexes 1992=100 

 2000 I 114.7 138.7 120.9 130.8 110.0 114.0 112.3 113.4 

 II 116.4 140.5 120.7 131.5 109.8 113.0 115.6 113.9 

 III 116.6 140.6 120.6 134.3 111.1 115.2 112.8 114.3 

 IV 117.1 141.0 120.4 135.3 111.2 115.6 113.4 114.8 

 ANNUAL 116.2 140.2 120.6 133.0 110.6 114.4 113.5 114.1 

 2001 I 116.7 140.7 120.6 136.3 110.9 116.8 113.8 115.7 

 II 116.6 139.7 119.8 136.3 110.1 116.9 115.3 116.3 

 III 117.2 139.4 118.9 136.7 110.2 116.6 117.2 116.8 

 IV 119.3 140.4 117.7 137.2 110.7 115.0 119.2 116.5 

 ANNUAL 117.5 140.1 119.2 136.6 110.5 116.3 116.4 116.3 

 2002 I 121.8 142.5 117.0 138.4 111.3 113.6 121.3 116.4 

 II r122.3 r142.8 116.8 r139.7 111.3 r114.2 r121.3 116.8 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 0.2 1.9 1.7 15.2 10.7 14.9 -15.3 2.7 

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

 III 0.6 0.2 -0.4 8.7 4.9 8.0 -9.1 1.4 

 IV 1.7 1.1 -0.6 3.1 0.2 1.4 2.1 1.6 

 ANNUAL 2.9 4.0 1.0 7.0 3.5 3.9 -1.7 1.8 

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

 II -0.1 -2.7 -2.6 0.1 -2.9 0.3 5.1 2.0 

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

 IV 7.3 2.9 -4.1 1.5 1.8 -5.4 6.9 -1.0 

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

 2002 I 8.6 6.2 -2.2 3.6 2.2 -4.6 7.5 -0.2 

 II r1.5 r0.8 -0.7 r3.7 0.2 r2.1 r-0.1 r1.3 

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

 Percent change from corresponding quarter of previous year 

 2000 I 2.3 4.5 2.1 6.2 2.8 3.7 -1.8 1.7 

 II 4.0 5.4 1.3 6.6 3.2 2.5 0.7 1.8 

 III 3.3 3.9 0.6 7.9 4.3 4.5 -2.6 1.8 

 IV 2.1 2.2 0.0 7.2 3.7 4.9 -3.1 1.9 

 ANNUAL 2.9 4.0 1.0 7.0 3.5 3.9 -1.7 1.8 

 2001 I 1.7 1.4 -0.3 4.2 0.9 2.4 1.4 2.1 

 II 0.2 -0.6 -0.8 3.6 0.3 3.5 -0.3 2.1 

 III 0.5 -0.8 -1.4 1.8 -0.8 1.2 3.9 2.2 

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

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

 2002 I 4.4 1.3 -2.9 1.6 0.3 -2.7 6.6 0.6 

 II r4.8 r2.2 -2.5 2.4 1.1 r-2.3 5.2 r0.4 

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

 See footnotes following Table 6. September 5, 2002 

 r=revised Source: Bureau of Labor Statistics 
9 

 

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

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

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

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

 Indexes 1992=100 

 2000 I 133.6 138.3 103.5 131.4 110.5 98.4 

 II 134.9 139.8 103.6 129.3 107.9 95.9 

 III 135.4 139.3 102.9 132.2 109.4 97.7 

 IV 135.9 137.6 101.3 131.5 108.0 96.7 

 ANNUAL 134.9 138.7 102.8 131.1 109.0 97.2 

 2001 I 135.4 135.1 99.8 132.0 107.4 97.5 

 II 135.4 133.0 98.2 133.0 107.4 98.2 

 III 136.4 131.3 96.3 133.3 107.5 97.8 

 IV 137.6 129.2 93.9 134.3 108.3 97.6 

 ANNUAL 136.2 132.1 97.1 133.1 107.7 97.8 

 2002 I 140.9 130.2 92.4 136.5 109.8 96.9 

 II r142.3 r131.3 r92.3 137.5 109.7 r96.6 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 4.5 2.7 -1.7 25.3 20.5 19.9 

 II 3.8 4.4 0.5 -6.3 -9.0 -9.7 

 III 1.6 -1.3 -2.8 9.5 5.8 7.8 

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

 ANNUAL 4.1 2.5 -1.5 7.4 3.9 3.2 

 2001 I -1.5 -7.1 -5.6 1.6 -2.1 3.1 

 II 0.0 -6.2 -6.2 3.1 -0.1 3.1 

 III 2.9 -4.9 -7.6 1.0 0.3 -1.9 

 IV 3.8 -6.3 -9.7 2.9 3.2 -0.9 

 ANNUAL 0.9 -4.8 -5.6 1.5 -1.2 0.6 

 2002 I 9.7 3.0 -6.1 6.9 5.4 -2.6 

 II r4.3 r3.6 r-0.7 3.0 -0.4 r-1.2 

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

 Percent change from corresponding quarter of previous year 

 2000 I 4.4 3.6 -0.8 8.9 5.5 4.3 

 II 4.7 3.8 -0.8 6.9 3.5 2.1 

 III 4.3 2.6 -1.7 7.9 4.3 3.4 

 IV 2.9 0.2 -2.6 5.9 2.4 2.9 

 ANNUAL 4.1 2.5 -1.5 7.4 3.9 3.2 

 2001 I 1.3 -2.3 -3.6 0.5 -2.7 -0.9 

 II 0.4 -4.9 -5.2 2.9 -0.5 2.5 

 III 0.7 -5.7 -6.4 0.8 -1.8 0.1 

 IV 1.3 -6.1 -7.3 2.1 0.3 0.8 

 ANNUAL 0.9 -4.8 -5.6 1.5 -1.2 0.6 

 2002 I 4.0 -3.7 -7.4 3.4 2.2 -0.6 

 II r5.2 r-1.2 -6.1 3.4 2.1 r-1.6 

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

 See footnotes following Table 6. September 5, 2002 

 r=revised Source: Bureau of Labor Statistics 
10 

 

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

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

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

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

 Indexes 1992=100 

 2000 I 148.6 162.9 109.7 130.8 109.9 88.0 

 II 150.0 165.2 110.2 127.5 106.4 85.0 

 III 150.3 164.6 109.5 130.6 108.0 86.9 

 IV 150.1 162.0 107.9 128.4 105.5 85.5 

 ANNUAL 149.7 163.7 109.3 129.3 107.5 86.4 

 2001 I 149.0 157.9 106.0 129.4 105.3 86.8 

 II 149.1 155.3 104.1 130.5 105.4 87.5 

 III 150.1 152.2 101.4 130.2 105.0 86.7 

 IV 150.9 148.6 98.5 131.8 106.3 87.3 

 ANNUAL 149.8 153.5 102.5 130.4 105.5 87.1 

 2002 I 155.7 150.3 96.5 134.2 107.9 86.2 

 II r158.0 r152.3 96.4 135.1 107.7 r85.5 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 7.6 6.3 -1.2 29.7 24.6 20.5 

 II 3.9 5.8 1.8 -9.6 -12.1 -13.0 

 III 0.8 -1.6 -2.3 9.9 6.1 9.1 

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

 ANNUAL 4.4 3.6 -0.7 7.7 4.2 3.2 

 2001 I -3.0 -9.7 -6.9 3.1 -0.6 6.2 

 II 0.4 -6.5 -6.9 3.6 0.4 3.2 

 III 2.7 -7.6 -10.0 -1.0 -1.7 -3.6 

 IV 2.3 -9.2 -11.2 5.0 5.4 2.7 

 ANNUAL 0.0 -6.2 -6.2 0.9 -1.9 0.8 

 2002 I 13.2 4.7 -7.5 7.5 6.0 -5.0 

 II r6.0 r5.4 r-0.6 2.8 -0.6 r-3.1 

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

 Percent change from corresponding quarter of previous year 

 2000 I 5.2 5.1 -0.1 10.5 7.0 5.0 

 II 5.1 5.3 0.2 7.4 4.0 2.2 

 III 4.3 3.2 -1.1 8.1 4.5 3.6 

 IV 2.9 1.0 -1.9 4.8 1.4 1.8 

 ANNUAL 4.4 3.6 -0.7 7.7 4.2 3.2 

 2001 I 0.3 -3.1 -3.3 -1.1 -4.2 -1.3 

 II -0.6 -6.0 -5.5 2.3 -1.0 3.0 

 III -0.1 -7.5 -7.4 -0.3 -2.8 -0.2 

 IV 0.6 -8.2 -8.8 2.6 0.8 2.1 

 ANNUAL 0.0 -6.2 -6.2 0.9 -1.9 0.8 

 2002 I 4.5 -4.8 -8.9 3.7 2.5 -0.8 

 II r6.0 r-1.9 r-7.4 3.5 2.2 r-2.3 

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

 See footnotes following Table 6. September 5, 2002 

 r=revised Source: Bureau of Labor Statistics 
11 

 

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

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

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

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

 Indexes 1992=100 

 2000 I 120.6 114.9 95.3 130.6 109.8 108.3 

 II 121.8 115.6 95.0 130.4 108.9 107.1 

 III 122.6 115.4 94.1 133.2 110.2 108.7 

 IV 123.9 114.5 92.4 135.0 110.9 108.9 

 ANNUAL 122.2 115.1 94.2 132.3 110.0 108.3 

 2001 I 123.9 113.4 91.6 134.7 109.7 108.7 

 II 123.6 111.7 90.4 135.5 109.4 109.6 

 III 124.4 111.3 89.5 137.2 110.6 110.3 

 IV 125.9 110.5 87.8 137.1 110.6 108.9 

 ANNUAL 124.4 111.7 89.8 136.1 110.1 109.4 

 2002 I 127.5 110.8 86.9 139.1 111.8 109.1 

 II r128.3 r111.3 r86.8 140.3 111.9 109.3 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 0.8 -1.8 -2.5 17.8 13.3 17.0 

 II 3.8 2.4 -1.4 -0.5 -3.4 -4.2 

 III 2.6 -0.9 -3.5 8.7 4.9 5.9 

 IV 4.6 -3.0 -7.2 5.6 2.5 0.9 

 ANNUAL 3.8 1.1 -2.6 6.7 3.3 2.9 

 2001 I -0.1 -3.7 -3.6 -0.8 -4.4 -0.7 

 II -0.9 -5.9 -5.0 2.3 -0.8 3.2 

 III 2.5 -1.5 -3.8 5.1 4.4 2.5 

 IV 4.9 -2.9 -7.4 -0.3 0.0 -5.0 

 ANNUAL 1.8 -2.9 -4.7 2.9 0.1 1.0 

 2002 I 5.3 1.2 -3.9 6.1 4.6 0.8 

 II r2.6 r1.8 r-0.8 r3.4 r0.0 r0.8 

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

 Percent change from corresponding quarter of previous year 

 2000 I 3.4 1.6 -1.8 6.1 2.8 2.6 

 II 4.4 1.8 -2.5 5.8 2.5 1.4 

 III 4.4 1.7 -2.5 7.4 3.8 2.9 

 IV 2.9 -0.8 -3.7 7.7 4.2 4.6 

 ANNUAL 3.8 1.1 -2.6 6.7 3.3 2.9 

 2001 I 2.7 -1.3 -3.9 3.1 -0.1 0.4 

 II 1.5 -3.4 -4.8 3.9 0.5 2.3 

 III 1.5 -3.5 -4.9 3.0 0.4 1.5 

 IV 1.6 -3.5 -5.0 1.5 -0.3 0.0 

 ANNUAL 1.8 -2.9 -4.7 2.9 0.1 1.0 

 2002 I 2.9 -2.3 -5.0 3.2 2.0 0.3 

 II r3.8 -0.3 -4.0 3.5 2.2 -0.3 

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

 See footnotes following Table 6. September 5, 2002 

 r=revised Source: Bureau of Labor Statistics 
12 

 

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

 and prices, seasonally adjusted 

 

 Output Hourly Real Unit Total Unit Implicit 

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

 and employee Employee sation compen- labor labor costs fits deflator 

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

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

 Indexes 1992=100 

 2000 I 116.7 146.0 125.1 126.9 106.7 108.7 105.4 107.8 120.5 108.9 

 II 116.8 146.0 125.0 127.8 106.6 109.4 107.7 108.9 120.4 109.9 

 III 117.6 146.9 125.0 130.4 107.9 110.9 108.9 110.4 111.4 110.5 

 IV 117.3 146.4 124.8 131.7 108.2 112.2 111.0 111.9 100.4 110.9 

 ANNUAL 117.1 146.3 125.0 129.2 107.4 110.3 108.3 109.8 113.2 110.0 

 2001 I 116.6 145.2 124.6 131.3 106.9 112.6 113.7 112.9 94.9 111.4 

 II 117.3 145.1 123.7 131.9 106.5 112.5 115.6 113.3 97.2 112.0 

 III 118.2 145.0 122.7 132.7 107.0 112.3 117.6 113.7 99.7 112.5 

 IV 121.3 146.9 121.2 133.6 107.8 110.2 116.2 111.8 109.6 111.6 

 ANNUAL 118.3 145.6 123.0 132.4 107.0 111.9 115.8 112.9 100.3 111.9 

 2002 I 122.8 148.3 120.8 134.9 108.5 109.9 116.0 111.6 109.4 111.4 

 II 124.3 149.9 120.6 136.3 108.7 109.7 116.5 111.5 108.4 111.3 

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

 Percent change from previous quarter at annual rate(5) 

 2000 I 5.3 7.6 2.3 14.2 9.8 8.5 1.3 6.5 -17.6 3.9 

 II 0.3 -0.2 -0.4 2.8 -0.1 2.6 8.9 4.2 -0.5 3.8 

 III 2.6 2.6 0.0 8.5 4.7 5.7 4.5 5.4 -26.8 2.0 

 IV -0.7 -1.3 -0.5 4.1 1.1 4.9 7.8 5.6 -33.9 1.7 

 ANNUAL 2.1 3.7 1.5 6.7 3.2 4.4 4.6 4.5 -14.1 2.5 

 2001 I -2.6 -3.2 -0.7 -1.2 -4.8 1.4 10.1 3.6 -20.2 1.6 

 II 2.3 -0.4 -2.7 1.8 -1.3 -0.5 7.1 1.5 10.0 2.1 

 III 3.2 -0.3 -3.4 2.5 1.9 -0.7 7.2 1.5 10.7 2.1 

 IV 10.8 5.4 -4.8 2.7 3.0 -7.3 -5.0 -6.7 46.0 -3.3 

 ANNUAL 1.0 -0.5 -1.5 2.5 -0.3 1.4 6.9 2.9 -11.3 1.7 

 2002 I 5.1 3.7 -1.3 4.1 2.6 -0.9 -0.6 -0.8 -0.6 -0.8 

 II 5.0 4.4 -0.6 4.2 0.8 -0.8 1.8 -0.1 -3.7 -0.4 

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

 Percent change from corresponding quarter of previous year 

 2000 I 2.1 4.8 2.6 5.6 2.3 3.4 3.8 3.5 -12.1 1.8 

 II 2.1 4.0 1.9 6.2 2.8 4.0 5.0 4.3 -11.2 2.6 

 III 2.6 3.8 1.2 7.6 4.0 4.9 4.1 4.7 -12.9 2.9 

 IV 1.8 2.1 0.3 7.3 3.8 5.4 5.6 5.4 -20.6 2.8 

 ANNUAL 2.1 3.7 1.5 6.7 3.2 4.4 4.6 4.5 -14.1 2.5 

 2001 I -0.1 -0.5 -0.4 3.5 0.2 3.6 7.8 4.7 -21.3 2.3 

 II 0.4 -0.6 -1.0 3.2 -0.1 2.8 7.3 4.0 -19.3 1.9 

 III 0.5 -1.3 -1.8 1.8 -0.8 1.2 8.0 3.1 -10.5 1.9 

 IV 3.3 0.3 -2.9 1.4 -0.4 -1.8 4.7 -0.1 9.1 0.6 

 ANNUAL 1.0 -0.5 -1.5 2.5 -0.3 1.4 6.9 2.9 -11.3 1.7 

 2002 I 5.3 2.1 -3.1 2.8 1.5 -2.4 2.0 -1.2 15.3 0.0 

 II 6.0 3.3 -2.5 3.4 2.1 -2.5 0.7 -1.6 11.5 -0.6 

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

 See footnotes following Table 6. September 5, 2002 

 r=revised Source: Bureau of Labor Statistics 
13 

 

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 –1.6 and +1.7 index points 

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

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

Footnotes, Tables 1-6

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

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

for the self-employed. 

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

(CPI-U). The trend from 1978-2001 is based on the Consumer Price Index research 

series (CPI-U-RS). 

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

income of persons, and indirect taxes. 

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

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

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

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

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

zero by definition. 

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

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

adjustments.