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 information: (202) 691-5606 MATERIAL IS EMBARGOED 

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

Media contact: (202) 691-5902 WEDNESDAY, DECEMBER 3, 2003. 

PRODUCTIVITY AND COSTS 

Third Quarter 2003 

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

productivity data—as measured by output per hour of all persons—for the third quarter of 2003. 

The seasonally adjusted annual rates of productivity growth in the third quarter were: 

 8.6 percent in the business sector, and 

9.4 percent in the nonfarm business sector. 

In both sectors, upward revisions to productivity reflect much larger upward revisions to output 

than to hours. 

 In manufacturing, revised productivity increases in the third quarter were: 

9.0 percent in manufacturing, 

14.8 percent in durable goods manufacturing, and 

 3.1 percent in nondurable goods manufacturing. 

Productivity in the manufacturing sector also rose more rapidly than was reported on 

Nov. 6. Output and hours both were revised up but the revisions to output were larger than those 

to hours in the sector. Output and hours in manufacturing, which includes about 15 percent of 

U.S. business sector employment, tend to vary more from quarter to quarter than data for the 

aggregate business and nonfarm business sectors. Third-quarter measures are summarized in 

table A and appear in detail in tables 1 through 5. 

Revised historical measures through 2002 will be available on the BLS web site on Jan. 7, 2004, 

reflecting the release of revised source data. For more information see "Upcoming changes" on 

page 7. 
2 

Table A. Productivity and costs: Revised third-quarter 2003 measures 

(Seasonally adjusted annual rates) 

Sector 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

Percent change from preceding quarter

Business 8.6 10.2 1.4 2.3 0.0 -5.8

Nonfarm business 9.4 10.3 0.8 3.0 0.7 -5.8

Manufacturing 9.0 3.5 -5.0 4.1 1.7 -4.5

 Durable 14.8 8.1 -5.9 3.5 1.1 -9.9 

 Nondurable 3.1 -0.8 -3.8 5.3 2.9 2.1 

Percent change from same quarter a year ago 

Business 5.0 4.4 -0.6 2.8 0.6 -2.1

Nonfarm business 5.0 4.4 -0.5 2.7 0.5 -2.2

Manufacturing 4.4 -0.4 -4.7 4.4 2.2 0.0

 Durable 6.9 1.4 -5.1 4.0 1.8 -2.7 

 Nondurable 1.8 -2.3 -4.0 5.2 2.9 3.4 

 The data sources and methods used in the preparation of the manufacturing series differ 

from those used in preparing the business and nonfarm business series, and these measures are 

not directly comparable. Output measures for business and nonfarm business are based on 

measures of gross domestic product prepared by the Bureau of Economic Analysis of the U.S. 

Department of Commerce. Quarterly output measures for manufacturing reflect indexes of 

industrial production independently prepared by the Board of Governors of the Federal Reserve 

System. See Technical Notes for further information on data sources (page 8). 

Business 

From the second quarter to the third quarter of 2003, business sector productivity rose at 

an annual rate of 8.6 percent, as output increased 10.2 percent and hours of all persons engaged 

in the sector rose 1.4 percent (table 1). This is only the second increase in hours since they

began falling in the second quarter of 2000. The output increase was the largest since an 11.2-

percent rise in the first quarter of 1984. 

Hourly compensation rose 2.3 percent during the third quarter of 2003, less than the 4.1-

percent increase in the second quarter. 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, was unchanged in the third 

quarter of 2003. 
3 

Unit labor costs decreased 5.8 percent last quarter, a bigger drop than the 3.1-percent 

decline in the previous quarter. Unit labor costs last rose in the first quarter of the year, when

they increased 0.5 percent. The implicit price deflator for the business sector, which reflects 

changes both in unit labor costs and in unit nonlabor payments, increased at a 1.7 percent annual 

rate in the third quarter of 2003. 

Nonfarm business 

Output per hour of all persons in the nonfarm business sector increased 9.4 percent 

during the third quarter of 2003 (table 2). Output rose 10.3 percent while hours of all persons 

increased 0.8 percent. The output increase was the largest since the third quarter of 1983, when 

it rose 11.5 percent. In the nonfarm business sector, hours last increased in the first quarter of

2000, when they rose 1.6 percent. 

Hourly compensation grew 3.0 percent in the third quarter of 2003, down somewhat from 

the 3.6-percent increase in the previous quarter. When the rise in consumer prices is taken into 

account, real hourly compensation rose 0.7 percent in the third quarter of 2003. 

Unit labor costs fell 5.8 percent in the third quarter, following a 3.2 percent decrease one 

quarter earlier. The implicit price deflator for nonfarm business rose 1.5 percent in the third 

quarter of 2003. 

Manufacturing 

Productivity increased 9.0 percent in manufacturing in the third quarter of 2003, as output 

increased 3.5 percent and hours of all persons dropped 5.0 percent (seasonally adjusted annual 

rates). Hours of all persons in manufacturing have fallen for thirteen consecutive quarters. In

durable goods industries, productivity rose by 14.8 percent, reflecting an 8.1-percent rise in 

output and a decline of 5.9 percent in hours. Productivity grew much more slowly in the 

nondurable goods industries, 3.1 percent, as output fell 0.8 percent and hours fell more, 3.8 

percent (tables 3, 4, and 5). 

The hourly compensation of all manufacturing workers rose 4.1 percent during the third 

quarter of 2003. In durable goods manufacturing, hourly compensation increased 3.5 percent 

and in nondurable goods manufacturing it grew 5.3 percent. When the increase in consumer

prices is taken into account, real hourly compensation for all manufacturing workers rose 1.7 

percent in the third quarter.

Unit labor costs in manufacturing fell 4.5 percent in the third quarter after rising 2.2 

percent in the previous quarter. Unit labor costs dropped 9.9 percent in durable goods 

manufacturing in the third quarter and they rose 2.1 percent in nondurable goods manufacturing.
4 

Nonfinancial Corporations 

Third-quarter 2003 measures of productivity and costs also were released for 

nonfinancial corporations (tables B and 6). Output per all-employee hour grew at a 9.2 percent 

annual rate, somewhat faster than the 8.4 percent increase in the previous quarter. Output 

increased 8.9 percent in the third quarter, and hours of all employees fell 0.2 percent (seasonally

adjusted annual rates). The third quarter increase in output was the largest since a 9.5-percent 

rise in the first quarter of 2000 while the decrease in employee hours was the smallest since the 

third quarter of 2000, when they fell 0.1 percent. Employee hours have fallen in fourteen 

consecutive quarters. 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: Third-quarter 2003 productivity and cost measures 

(Seasonally adjusted annual rates) 

Period

Productivity Output Hours

Hourly

compensation

Real

hourly

compensation

Unit 

labor 

costs

Unit 

profits

Implicit 

price 

deflator

Percent change from preceding quarter

2003 III 9.2 8.9 -0.2 3.0 0.7 -5.6 60.9 0.6

Percent change from same quarter a year ago 

2003 III 6.2 4.9 -1.2 3.3 1.1 -2.7 36.4 0.4

Hourly compensation in nonfinancial corporations increased 3.0 percent in the third 

quarter, down from the second quarter increase of 3.7 percent. When the rise in consumer prices 

is taken into account, real hourly compensation increased 0.7 percent in the third quarter. 

Unit labor costs for the sector dropped 5.6 percent in third quarter 2003. Unit nonlabor 

costs also fell, 2.4 percent, while unit profits rose at a 60.9 percent annual rate in the third 

quarter. As a result of these movements, the implicit price deflator for the output of nonfinancial 

corporations—which reflects a weighted average of these three measures—increased 0.6 percent. 
5 

Revised Measures

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

business, and manufacturing sectors are compared in table C. In the business and nonfarm 

business sectors, increases in productivity and output are larger than those reported on Nov. 6, 

based on the information available at that time. Unit labor cost measures for these sectors 

showed correspondingly larger declines. Similarly, in manufacturing rates of growth in output 

and productivity were revised up in the third quarter and unit labor costs show a larger decline 

than was reported last month. 

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 

Third quarter 2003 

Business:

 Previous........................ 7.4 8.8 1.3 2.4 0.1 -4.6 

 Current ......................... 8.6 10.2 1.4 2.3 0.0 -5.8 

Nonfarm business:

 Previous........................ 8.1 8.8 0.7 3.1 0.8 -4.6 

 Current ......................... 9.4 10.3 0.8 3.0 0.7 -5.8 

Manufacturing:

 Previous........................ 8.6 2.9 -5.2 4.3 1.9 -4.0 

 Current ......................... 9.0 3.5 -5.0 4.1 1.7 -4.5 
6 

In addition, quarterly measures of productivity, output, and unit labor costs for 

manufacturing were revised back to first quarter 2001 due to the incorporation of revised indexes 

of industrial production. The annual measures for 2001 and 2002 also were affected. In both 

years, output shows less of a decline than it had previously. Productivity was revised up by a 

corresponding amount in both years. The same revisions affected unit labor costs; they fall more 

in 2002 and increase less in 2001 than previously published. The output measures for more 

recent quarters, based on those published by the Board of Governors of the Federal Reserve 

System, were changed to incorporate additional and revised source data and updated information 

on seasonal trends. (See Federal Reserve statistical release G.17 (419), "Industrial Production 

and Capacity Utilization: the 2003 Annual Revision," Nov. 10, 2003.) 

Table D. Manufacturing industries: Previous and revised productivity and related measures 

Annual percent changes 

Sector 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

Annual average 2002 

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

Current ........................... 6.5 -0.7 -6.8 4.7 3.1 -1.7

Annual average 2001 

Previous.......................... 1.6 -4.9 -6.4 2.4 -0.4 0.8

Current ........................... 1.8 -4.7 -6.4 2.4 -0.4 0.6

Although the Federal Reserve revised and reclassified its indexes of industrial production 

(IIP) back to 1972 when they released their historical revisions in December 2002, the Bureau of

Labor Statistics has not yet incorporated these changes into its historical quarterly measures for

years before 2001. When revised historical productivity data are released on Jan. 7, 2004, the 

updated information from the IIP will be incorporated into the quarterly measures. 
7 

Next release date

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

February 5, 2004. Preliminary fourth-quarter and annual 2003 measures will be released at that 

time. 

Scheduled release dates for productivity and costs measures for major sectors of the U.S. 

economy in 2004 are: 

Reference period 2004 release date

2003:

Fourth quarter, Annual February 5 

Fourth quarter, Annual (revised) March 4 

2004:

First quarter May 6 

First quarter (revised) June 3 

Second quarter August 10 

Second quarter (revised) September 2 

Third quarter November 4 

Third quarter (revised) December 7 

These dates are based on presently available schedules for the release of underlying

source data in 2004. Each issue of Productivity and Costs contains a "Next release date"

paragraph that readers should use to confirm the dates above. 

Upcoming changes 

In order to provide users with information on long-term productivity and cost trends 

reflecting the release of the revised national income and product accounts by the Bureau of 

Economic Analysis, U.S. Department of Commerce, on Dec. 10, 2003, revised historical 

measures of productivity and costs for all sectors will be prepared by the BLS. Revised data for 

the manufacturing and nonfinancial corporate sectors also will reflect conversion from the 1987 

Standard Industrial Classification to the 2002 North American Industry Classification System. 

On Jan. 7, 2004, the BLS will post revised historical measures through the fourth quarter of 2002 

on its web site http://www.bls.gov/lpc/, but will not incorporate these data into the LABSTAT 

database at that time. In keeping with usual practices, revised data for the second and third 

quarters of 2003 will be reported in the "Productivity and Costs" release of Feb. 5, 2004, which 

also will include revised first-quarter 2003 data. All revised historical data will be incorporated 

into the LABSTAT database at the time of that release.
8 

TECHNICAL NOTES

Labor Hours: Hours data for the labor

productivity and cost measures include hours for

all persons working in the sector—wage and

salary workers, the self-employed, and unpaid

family workers. The primary source of hours and

employment data is the BLS Current 

Employment Statistics (CES) program, which

provides monthly survey data on the number of

jobs held by wage and salary workers in nonfarm

establishments. The CES also provides average

weekly paid hours of production and 

nonsupervisory workers in these establishments. 

The Office of Productivity and Technology

estimates average weekly paid hours of

nonproduction and supervisory workers. Weekly

paid hours were adjusted to hours at work using 

the BLS Hours at Work survey, conducted for

this purpose. Data from the National 

Compensation Survey are used for recent years. 

Data from the BLS Current Population 

Survey (CPS) are used for farm labor, nonfarm

proprietors, and nonfarm unpaid family workers.

Estimates of labor input for government 

enterprises are derived from the CPS, the CES,

and the National Income and Product Accounts

(NIPA) prepared by the Bureau of Economic

Analysis (BEA) of the Department of Commerce.

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

gross domestic product (GDP) the following

outputs: General government, nonprofit

institutions, paid employees of private 

households, and the rental value of owneroccupied 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 owneroccupied dwellings; unincorporated business; and

those corporations which are depository

institutions, nondepository institutions, security

and commodity brokers, insurance carriers,

regulated investment offices, small business 

investment offices, and real estate investment 

trusts. Nonfinancial corporations accounted for

about 53 percent of the value of GDP in 1996. 

Productivity: These productivity measures 

describe the relationship between real output and

the labor time involved in its production. They

show the changes from period to period in the

amount of goods and services produced per hour.

Although these measures relate output to hours at

work of all persons engaged in a sector, they do

not measure the specific contribution of labor,

capital, or any other factor of production. Rather,

they reflect the joint effects of many influences,

including changes in technology; capital

investment; level of output; utilization of

capacity, energy, and materials; the organization 

of production; managerial skill; and the

characteristics and effort of the work force. 

Information in this release will be made available 

to sensory-impaired individuals upon request.

Voice phone: 202-691-5200; Federal Relay

Service number: 1-800-877-8339. 

 
9 

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

 and prices, seasonally adjusted 

 Real 

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

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

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

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

 Indexes 1992=100 

 2001 I 117.4 140.4 119.6 137.4 111.9 117.1 112.0 115.2 

 II 117.8 139.4 118.3 138.2 111.6 117.3 113.3 115.8 

 III 118.8 139.1 117.1 139.1 112.1 117.1 115.1 116.4 

 IV 121.3 140.3 115.6 139.8 112.8 115.2 117.0 115.9 

 ANNUAL 118.8 139.8 117.6 138.6 112.1 116.7 114.3 115.8 

 2002 I 123.9 142.3 114.9 141.0 113.4 113.8 119.7 116.0 

 II 124.1 142.5 114.8 142.4 113.5 114.7 118.8 116.2 

 III 125.9 144.4 114.6 143.1 113.5 113.6 120.9 116.3 

 IV 126.4 145.0 114.7 143.7 113.4 113.7 122.1 116.8 

 ANNUAL 125.1 143.5 114.7 142.5 113.5 113.9 120.4 116.3 

 2003 I 127.2 145.5 114.3 144.8 113.3 113.8 123.0 117.2 

 II 129.5 147.1 113.6 146.3 114.2 112.9 125.3 117.5 

 III r132.2 r150.7 r114.0 r147.1 114.2 r111.3 r129.6 118.0 

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

 Percent change from previous quarter at annual rate(5) 

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

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

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

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

 ANNUAL 2.0 -0.2 -2.1 3.8 1.0 1.8 2.3 2.0 

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

 II 0.8 0.6 -0.2 4.0 0.4 3.1 -3.2 0.7 

 III 5.9 5.3 -0.6 2.1 0.0 -3.6 7.6 0.5 

 IV 1.5 1.7 0.2 1.6 -0.4 0.1 3.8 1.5 

 ANNUAL 5.3 2.7 -2.5 2.8 1.2 -2.3 5.3 0.4 

 2003 I 2.7 1.4 -1.2 3.2 -0.6 0.5 3.2 1.6 

 II 7.4 4.5 -2.7 4.1 3.5 -3.1 7.7 1.0 

 III r8.6 r10.2 r1.4 r2.3 r0.0 r-5.8 r14.2 r1.7 

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

 Percent change from corresponding quarter of previous year 

 2001 I 2.2 1.4 -0.8 4.9 1.4 2.6 1.4 2.2 

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

 III 1.7 -1.0 -2.6 3.3 0.6 1.6 3.7 2.3 

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

 ANNUAL 2.0 -0.2 -2.1 3.8 1.0 1.8 2.3 2.0 

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

 II 5.4 2.3 -2.9 3.0 1.7 -2.2 4.9 0.3 

 III 6.0 3.8 -2.1 2.9 1.3 -2.9 5.0 0.0 

 IV 4.2 3.4 -0.8 2.8 0.5 -1.4 4.3 0.7 

 ANNUAL 5.3 2.7 -2.5 2.8 1.2 -2.3 5.3 0.4 

 2003 I 2.7 2.2 -0.5 2.7 -0.1 0.0 2.8 1.1 

 II 4.3 3.2 -1.1 2.8 0.6 -1.5 5.5 1.1 

 III r5.0 r4.4 -0.6 2.8 0.6 r-2.1 r7.1 1.4 

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

 See footnotes following Table 6. December 3, 2003 

 r=revised Source: Bureau of Labor Statistics 

 
10 

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

 and prices, seasonally adjusted 

 Real 

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

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

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

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

 Indexes 1992=100 

 2001 I 116.9 140.7 120.3 136.7 111.3 117.0 113.5 115.7 

 II 117.4 139.7 119.0 137.4 111.0 117.1 114.9 116.3 

 III 118.3 139.4 117.8 138.2 111.4 116.8 116.8 116.8 

 IV 120.7 140.4 116.3 138.9 112.1 115.1 119.0 116.5 

 ANNUAL 118.3 140.1 118.4 137.8 111.4 116.5 116.1 116.3 

 2002 I 123.4 142.5 115.5 140.2 112.8 113.6 121.5 116.4 

 II 123.7 142.9 115.5 141.5 112.9 114.4 121.2 116.8 

 III 125.5 144.7 115.3 142.2 112.8 113.3 123.1 116.9 

 IV 126.0 145.3 115.3 142.8 112.7 113.3 124.3 117.3 

 ANNUAL 124.7 143.9 115.4 141.7 112.8 113.6 122.5 116.9 

 2003 I 126.7 145.8 115.1 143.7 112.4 113.4 125.2 117.7 

 II 128.9 147.5 114.4 145.0 113.2 112.5 127.5 117.9 

 III r131.8 r151.1 r114.7 146.1 113.4 r110.8 r131.6 r118.3 

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

 Percent change from previous quarter at annual rate(5) 

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

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

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

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

 ANNUAL 1.9 -0.1 -2.0 3.6 0.8 1.7 2.4 1.9 

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

 II 1.0 0.9 0.0 3.9 0.3 2.9 -0.9 1.4 

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

 IV 1.7 1.7 0.0 1.6 -0.4 -0.1 3.9 1.4 

 ANNUAL 5.4 2.7 -2.5 2.8 1.2 -2.4 5.6 0.5 

 2003 I 2.1 1.4 -0.7 2.6 -1.2 0.4 2.8 1.4 

 II 7.0 4.6 -2.2 3.6 3.0 -3.2 7.4 0.8 

 III r9.4 r10.3 r0.8 r3.0 r0.7 r-5.8 r13.5 1.5 

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

 Percent change from corresponding quarter of previous year 

 2001 I 2.0 1.4 -0.6 4.5 1.1 2.5 1.4 2.1 

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

 III 1.7 -0.8 -2.5 3.0 0.3 1.3 3.7 2.2 

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

ANNUAL 1.9 -0.1 -2.0 3.6 0.8 1.7 2.4 1.9

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

 II 5.4 2.3 -3.0 3.0 1.7 -2.3 5.4 0.5 

 III 6.1 3.8 -2.1 2.9 1.3 -3.0 5.4 0.1 

 IV 4.4 3.5 -0.9 2.8 0.5 -1.6 4.5 0.7 

ANNUAL 5.4 2.7 -2.5 2.8 1.2 -2.4 5.6 0.5

2003 I 2.6 2.3 -0.3 2.5 -0.4 -0.1 3.1 1.1

----

Labor Statistics

 II 4.1 3.2 -0.9 2.4 0.3 -1.6 5.2 0.9 

 III r5.0 r4.4 r-0.5 2.7 0.5 r-2.2 r6.8 1.3 

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

 See footnotes following Table 6. December 3, 2003 

r=revised Source: Bureau of

 
11 

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

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

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

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

 Indexes 1992=100 

 2001 I r135.1 r134.8 99.8 132.0 107.5 r97.7 

 II r136.1 r133.1 97.8 133.6 107.9 r98.2 

 III r137.9 r131.2 95.1 135.0 108.8 97.9 

 IV r140.6 r129.7 92.3 136.7 110.3 r97.2 

 ANNUAL r137.3 r132.2 96.3 134.3 108.6 r97.8 

 2002 I r144.0 r130.4 90.6 138.3 111.3 r96.1 

 II r145.9 r131.5 90.2 140.5 112.0 r96.3 

 III r147.7 r132.0 89.4 141.3 112.1 r95.7 

 IV r147.9 r131.1 88.6 142.4 112.4 r96.3 

 ANNUAL r146.3 r131.3 89.7 140.6 112.0 r96.1 

 2003 I r150.0 r131.4 87.6 144.3 112.9 r96.2 

 II r151.0 r130.3 86.3 146.1 114.1 r96.8 

 III r154.3 r131.5 85.2 147.6 114.6 r95.7 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I r-2.4 r-8.0 -5.7 1.6 -2.1 r4.1 

 II r3.2 r-4.9 -7.9 5.0 1.7 r1.7 

 III r5.2 r-5.7 -10.3 4.1 3.2 r-1.0 

 IV r8.0 r-4.3 -11.5 5.1 5.7 r-2.8 

 ANNUAL r1.8 r-4.7 -6.4 2.4 -0.4 r0.6 

 2002 I r10.0 r2.1 -7.2 5.0 3.7 r-4.6 

 II r5.4 r3.4 -1.9 6.3 2.7 r0.9 

 III r5.3 r1.7 -3.4 2.5 0.3 r-2.6 

 IV r0.4 r-2.9 -3.3 3.1 1.1 r2.7 

 ANNUAL r6.5 r-0.7 -6.8 4.7 3.1 r-1.7 

 2003 I r5.8 r1.0 -4.5 5.4 1.5 r-0.3 

 II r2.8 r-3.2 -5.8 5.0 4.4 r2.2 

 III r9.0 r3.5 r-5.0 r4.1 r1.7 r-4.5 

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

 Percent change from corresponding quarter of previous year 

 2001 I r1.1 r-2.5 -3.6 0.5 -2.9 r-0.6 

 II r1.0 r-4.8 -5.7 3.4 0.0 r2.4 

 III 1.8 r-5.8 -7.5 2.1 -0.6 r0.2 

 IV r3.4 r-5.7 -8.9 3.9 2.1 r0.5 

 ANNUAL r1.8 r-4.7 -6.4 2.4 -0.4 r0.6 

 2002 I r6.6 r-3.3 -9.2 4.8 3.6 r-1.7 

 II r7.1 r-1.2 -7.8 5.1 3.8 r-1.9 

 III r7.2 r0.7 -6.1 4.7 3.1 r-2.3 

 IV r5.2 1.0 -4.0 4.2 1.9 -0.9 

 ANNUAL r6.5 r-0.7 -6.8 4.7 3.1 r-1.7 

 2003 I r4.2 r0.8 -3.3 4.3 1.4 r0.2 

 II r3.5 r-0.9 -4.2 4.0 1.8 r0.5 

 III r4.4 r-0.4 -4.7 r4.4 2.2 r0.0 

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

 See footnotes following Table 6. December 3, 2003 

 r=revised Source: Bureau of Labor Statistics 

 
12 

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

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

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

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

 Indexes 1992=100 

 2001 I r149.4 158.3 106.0 129.4 105.3 86.6 

 II r150.4 r155.7 103.5 131.3 106.1 r87.3 

 III r152.4 r152.5 100.1 132.0 106.4 r86.6 

 IV r155.3 r150.1 96.7 134.3 108.4 r86.5 

 ANNUAL r151.8 r154.1 101.5 131.7 106.5 r86.8 

 2002 I r160.0 r151.2 94.5 135.6 109.1 r84.8 

 II r162.8 r153.2 94.1 138.2 110.3 r84.9 

 III r165.9 r154.5 93.1 138.8 110.1 r83.6 

 IV r168.0 r154.6 92.0 140.0 110.5 r83.3 

 ANNUAL r164.2 r153.4 93.4 138.1 110.0 r84.1 

 2003 I r170.2 r155.2 91.2 141.5 110.6 r83.1 

 II r171.4 r153.6 89.7 143.1 111.7 r83.5 

 III r177.4 r156.7 88.3 r144.3 r112.0 r81.4 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I r-1.8 r-8.7 -7.0 3.1 -0.6 r5.0 

 II r2.9 r-6.5 -9.1 6.2 2.9 r3.3 

 III r5.3 r-8.0 -12.6 2.0 1.1 r-3.1 

 IV r7.9 r-5.9 -12.8 7.2 7.8 r-0.7 

 ANNUAL r1.4 r-5.8 -7.1 1.8 -0.9 r0.4 

 2002 I r12.6 r2.8 -8.7 3.9 2.6 r-7.7 

 II r7.4 r5.5 -1.7 8.1 4.4 r0.7 

 III r7.8 r3.3 -4.2 1.6 -0.5 r-5.8 

 IV r5.1 r0.4 -4.4 3.5 1.5 r-1.5 

 ANNUAL r8.1 r-0.5 -8.0 4.9 3.3 r-3.0 

 2003 I r5.4 r1.4 -3.8 4.4 0.5 r-0.9 

 II r2.7 r-3.9 -6.4 4.6 4.0 r1.8 

 III r14.8 r8.1 r-5.9 r3.5 r1.1 r-9.9 

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

 Percent change from corresponding quarter of previous year 

 2001 I r0.6 r-2.8 -3.3 -1.1 -4.3 -1.6 

 II r0.3 r-5.8 -6.1 3.0 -0.4 r2.7 

 III r1.4 r-7.4 -8.6 1.1 -1.6 r-0.3 

 IV r3.5 r-7.3 -10.4 4.6 2.7 r1.1 

 ANNUAL r1.4 r-5.8 -7.1 1.8 -0.9 r0.4 

 2002 I r7.1 r-4.5 -10.8 4.8 3.6 r-2.1 

 II r8.2 r-1.6 -9.1 5.3 3.9 r-2.8 

 III r8.9 r1.3 -7.0 5.2 3.5 r-3.4 

 IV r8.2 r3.0 -4.8 4.2 2.0 r-3.6 

 ANNUAL r8.1 r-0.5 -8.0 4.9 3.3 r-3.0 

 2003 I r6.4 r2.6 -3.5 4.4 1.4 r-1.9 

 II r5.2 r0.3 -4.7 3.5 1.3 r-1.6 

 III r6.9 r1.4 r-5.1 r4.0 1.8 r-2.7 

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

 See footnotes following Table 6. December 3, 2003 

 r=revised Source: Bureau of Labor Statistics 

 
13 

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

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

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

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

 Indexes 1992=100 

 2001 I r122.8 r112.4 91.6 134.7 109.7 r109.7 

 II 123.8 r111.6 90.2 135.8 109.7 109.7 

 III r124.9 r110.7 88.6 138.6 111.7 r110.9 

 IV r127.2 r110.0 86.4 139.2 112.4 r109.5 

 ANNUAL r124.6 r111.2 89.2 137.0 110.8 r109.9 

 2002 I r129.2 r110.3 85.4 141.6 113.9 r109.6 

 II r130.3 r110.6 84.9 142.9 113.9 r109.6 

 III r131.0 r110.7 84.4 144.3 114.5 r110.1 

 IV r129.4 r108.8 84.1 145.3 114.7 r112.3 

 ANNUAL r130.0 r110.1 84.7 143.5 114.3 r110.4 

 2003 I r131.5 r109.0 82.9 147.8 115.5 r112.4 

 II r132.3 r108.4 81.9 149.9 117.0 r113.3 

 III r133.3 r108.1 81.1 151.8 117.9 r113.9 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I r-3.6 r-7.0 -3.6 -0.8 -4.4 r2.9 

 II r3.2 r-2.9 -5.9 3.3 0.0 r0.1 

 III r3.8 r-3.2 -6.7 8.4 7.4 r4.5 

 IV r7.5 r-2.6 -9.4 1.9 2.5 r-5.2 

 ANNUAL r2.0 r-3.4 -5.3 3.6 0.8 r1.6 

 2002 I r6.5 r1.3 -4.9 7.1 5.8 r0.5 

 II r3.4 r1.2 -2.1 3.5 0.0 r0.1 

 III r2.3 r0.0 -2.2 4.2 2.0 r1.9 

 IV r-4.9 r-6.4 -1.6 2.6 0.6 r7.9 

 ANNUAL r4.3 r-1.0 -5.0 4.7 3.1 r0.4 

 2003 I r6.5 r0.7 -5.5 7.0 3.1 r0.5 

 II r2.6 r-2.4 -4.9 5.9 5.3 r3.2 

 III r3.1 r-0.8 r-3.8 5.3 2.9 r2.1 

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

 Percent change from corresponding quarter of previous year 

 2001 I r1.8 r-2.2 -3.9 3.1 -0.3 r1.3 

 II 1.7 r-3.5 -5.1 4.1 0.7 2.4 

 III r1.9 r-4.0 -5.9 4.1 1.3 r2.1 

 IV r2.6 r-4.0 -6.4 3.1 1.3 r0.5 

 ANNUAL r2.0 r-3.4 -5.3 3.6 0.8 r1.6 

 2002 I r5.2 r-1.9 -6.7 5.1 3.9 r-0.1 

 II 5.3 r-0.9 -5.8 5.2 3.9 -0.1 

 III r4.9 r0.0 -4.7 4.2 2.5 r-0.7 

 IV r1.7 r-1.0 -2.7 4.3 2.1 r2.6 

 ANNUAL r4.3 r-1.0 -5.0 4.7 3.1 r0.4 

 2003 I r1.7 r-1.2 -2.9 4.3 1.4 r2.5 

 II r1.5 r-2.1 -3.6 4.9 2.7 r3.3 

 III 1.8 -2.3 -4.0 5.2 r2.9 r3.4 

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

 See footnotes following Table 6. December 3, 2003 

 r=revised Source: Bureau of Labor Statistics 

 
14 

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

 and prices, seasonally adjusted 

 

 Output Hourly Real Unit Total Unit Implicit 

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

 and employee Employee sation compen- labor labor costs fits deflator 

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

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

 Indexes 1992=100 

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

 II 120.0 147.8 123.1 132.6 107.1 110.4 113.5 111.3 95.4 109.9 

 III 121.3 147.7 121.7 133.8 107.8 110.3 115.5 111.7 97.9 110.5 

 IV 124.5 149.6 120.2 134.7 108.7 108.2 114.1 109.8 107.6 109.6 

 ANNUAL 121.1 148.2 122.4 133.0 107.6 109.9 113.7 110.9 98.5 109.8 

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

 II 127.7 152.8 119.6 137.3 109.5 107.5 114.5 109.4 107.8 109.3 

 III 128.7 153.4 119.2 138.2 109.7 107.4 115.4 109.6 104.6 109.1 

 IV 129.9 154.5 118.9 139.2 109.9 107.1 115.2 109.3 110.1 109.4 

 ANNUAL 128.1 152.9 119.3 137.7 109.6 107.5 114.8 109.4 107.5 109.3 

 2003 I 131.0 155.2 118.4 140.5 109.9 107.2 114.9 109.3 112.4 109.6 

 II 133.7 157.6 117.9 141.8 110.7 106.1 112.6 107.8 126.8 109.4 

 III 136.7 161.0 117.8 142.8 110.9 104.5 111.9 106.5 142.8 109.6 

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

 Percent change from previous quarter at annual rate(5) 

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

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

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

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

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

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

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

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

 IV 3.8 2.8 -1.0 2.8 0.8 -1.0 -0.6 -0.9 22.8 0.9 

 ANNUAL 5.8 3.1 -2.5 3.5 1.9 -2.2 1.0 -1.3 9.1 -0.5 

 2003 I 3.4 1.9 -1.5 3.8 0.0 0.4 -1.0 0.0 8.5 0.7 

 II 8.4 6.3 -1.9 3.7 3.1 -4.3 -7.9 -5.3 61.6 -0.5 

 III 9.2 8.9 -0.2 3.0 0.7 -5.6 -2.4 -4.7 60.9 0.6 

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

 Percent change from corresponding quarter of previous year 

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

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

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

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

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

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

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

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

 IV 4.4 3.2 -1.1 3.3 1.1 -1.0 1.0 -0.4 2.4 -0.2 

 ANNUAL 5.8 3.1 -2.5 3.5 1.9 -2.2 1.0 -1.3 9.1 -0.5 

 2003 I 4.0 2.9 -1.1 3.4 0.5 -0.6 0.8 -0.2 4.5 0.2 

 II 4.7 3.1 -1.5 3.2 1.1 -1.4 -1.7 -1.5 17.6 0.1 

 III 6.2 4.9 -1.2 3.3 1.1 -2.7 -3.0 -2.8 36.4 0.4 

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

 See footnotes following Table 6. December 3, 2003 

 r=revised Source: Bureau of Labor Statistics 

 
15 

SOURCES: Output data are from the Bureau of Economic Analysis and the Census Bureau of 

the U.S. Department of Commerce; the Bureau of Labor Statistics, U.S. Department of Labor; 

and the Federal Reserve Board. Compensation and hours data are from the Bureau of Labor 

Statistics and the Bureau of Economic Analysis. 

RELIABILITY: Productivity and cost measures are regularly revised as more complete 

information becomes available. The measures are first published within 40 days of the close of

the reference period; revisions appear 30 days later, and second revisions after an additional 60 

days. In the business sector, the third publication (second revision) of a quarterly index of output 

per hour of all persons has differed from the initial value by between –1.4 and +1.5 index points 

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

between the fourth quarter of 1995 and the second quarter of 2003. 

Footnotes, Tables 1-6

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

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

for the self-employed. 

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

(CPI-U). The trend from 1978-2002 is based on the Consumer Price Index research 

series (CPI-U-RS). 

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

income of persons, and indirect taxes. 

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

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

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

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

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

zero by definition. 

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

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

adjustments.