Internet address: http://www.bls.gov/lpc/ USDL 03-279 

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 information: (202) 691-5606 MATERIAL IS EMBARGOED 

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

Media contact: (202) 691-5902 WEDNESDAY, JUNE 4, 2003. 

PRODUCTIVITY AND COSTS 

First 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 first quarter of 2003. 

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

 2.5 percent in the business sector and 

 1.9 percent in the nonfarm business sector. 

In both sectors, the first-quarter productivity gains were somewhat higher than those reported 

initially on May 1. 

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

1.9 percent in manufacturing, 

2.1 percent in durable goods manufacturing, and 

 2.2 percent in nondurable goods manufacturing. 

 Manufacturing productivity growth was revised down from the figure reported on May 1, 

reflecting a downward revision to productivity growth in durable goods manufacturing—which 

comprises about sixty percent of employment in the sector. Productivity in nondurable goods 

manufacturing was revised up. 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. First-quarter measures are summarized 

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

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

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

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

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

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

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

System. See Technical Notes for further information on data sources (page 7). 
2 

Table A. Productivity and costs: Revised first-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 2.5 2.0 -0.5 3.8 0.0 1.3

Nonfarm business 1.9 1.8 -0.1 3.4 -0.4 1.5

Manufacturing 1.9 -0.7 -2.6 4.5 0.7 2.6

Durable 2.1 0.1 -2.0 4.3 0.4 2.1

 Nondurable 2.2 -1.2 -3.4 4.8 0.9 2.5 

Percent change from same quarter a year ago 

Business 2.6 2.4 -0.2 3.5 0.6 0.9

Nonfarm business 2.4 2.4 0.0 3.3 0.4 0.8

Manufacturing 2.8 0.5 -2.2 4.1 1.1 1.3

Durable 4.4 1.4 -2.9 4.6 1.7 0.2

 Nondurable 0.8 -0.4 -1.2 3.3 0.4 2.5 

Business 

Productivity increased 2.5 percent in the business sector (seasonally adjusted annual rate) 

from the fourth quarter of 2002 to the first quarter of 2003, as output increased 2.0 percent and 

hours worked by all persons decreased 0.5 percent (table 1). 

Hourly compensation increased 3.8 percent during the first quarter of 2003. This measure 

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

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

consumer prices, was unchanged. 

Unit labor costs, which reflect changes in hourly compensation and productivity, rose 1.3 

percent during the first quarter of 2003. The change in unit labor costs usually approximates the 

change in hourly compensation less the change in productivity. The implicit price deflator for 

business output, which reflects changes in both unit labor costs and unit nonlabor payments, 

grew by 1.7 percent from the fourth quarter of 2002 to the first quarter of 2003. 

Nonfarm business 

Productivity rose 1.9 percent in the nonfarm business sector during the first quarter of 

2003, reflecting a 1.8-percent rise in output and a 0.1-percent decrease in working hours of all 

persons. Hours worked in the nonfarm business sector now have declined in 10 of the last 12 

quarters (table 2). 

 
3 

Hourly compensation increased 3.4 percent in the first quarter of 2003. When the rise in 

consumer prices is taken into account, real hourly compensation fell 0.4 percent in the first 

quarter. 

Unit labor costs grew 1.5 percent during the first quarter of 2003. The implicit price 

deflator for nonfarm business output also rose by 1.5 percent. 

Manufacturing 

Productivity rose 1.9 percent in manufacturing in the first quarter of 2003, as output 

decreased 0.7 percent and working hours of all persons declined 2.6 percent (seasonally adjusted 

annual rates). In durable goods industries, productivity grew 2.1 percent, as output edged up by

0.1 percent and hours fell 2.0 percent. In nondurable goods industries, productivity rose 2.2 

percent, as output dropped 1.2 percent and hours declined by 3.4 percent (tables 3, 4, and 5). 

Hourly compensation in manufacturing rose 4.5 percent during the first quarter. This 

increase reflects a rise of 4.3 percent in the hourly compensation of persons in durable goods 

industries and a larger increase, 4.8 percent, in the hourly compensation of workers in nondurable 

goods industries. Real hourly compensation, which takes account of changes in consumer prices, 

rose 0.7 percent for all manufacturing workers. 

Unit labor costs rose 2.6 percent in manufacturing during the first quarter. In durable 

goods industries, unit labor costs grew 2.1 percent. In nondurable goods industries, unit labor 

costs rose 2.5 percent last quarter. 

 
4 

Nonfinancial corporations 

Preliminary first-quarter 2003 measures of productivity and costs for nonfinancial 

corporations also were announced today (tables B and 6). Productivity rose 2.9 percent in the 

first quarter, less than the 5.0-percent rise recorded in the fourth quarter of 2002. Output 

increased 2.4 percent in first quarter 2003, while employee-hours declined 0.5 percent 

(seasonally adjusted annual rates). This marked the 10th consecutive decline in hours of 

nonfinancial corporate employees. Nonfinancial corporations include all corporations doing

business in the United States, except banks, stock and commodity brokers, and finance and 

insurance agencies. 

Table B. Nonfinancial corporations: Preliminary first-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 I 2.9 2.4 -0.5 4.7 0.8 1.7 2.2 1.0

Percent change from same quarter a year ago 

2003 I 4.3 3.4 -0.8 4.2 1.3 -0.1 2.5 0.3

Hourly compensation increased 4.7 percent during the first quarter of 2003. When the 

rise in consumer prices is taken into account, real hourly compensation rose 0.8 percent in the 

first quarter. Unit labor costs in nonfinancial corporations rose 1.7 percent in the first quarter, 

after falling in the previous seven quarters. 

Unit profits grew 2.2 percent in first quarter 2003, less than the 20.8-percent climb in the 

fourth quarter of 2002. The implicit price deflator for nonfinancial corporate output increased 

1.0 percent in the first quarter of 2003. 

 
5 

REVISED MEASURES

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

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

sectors, output and productivity were revised up from the data reported on May 1, based on 

information then available. Unit labor costs were revised downward. In the manufacturing

sector, productivity, output, and hourly compensation all were revised down. Because hourly

compensation was revised down by more than productivity, unit labor costs also were revised 

down. 

Table C. Previous and revised productivity and related measures 

(Quarterly percent change at seasonally adjusted annual rate) 

Sector 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

First quarter 2003 

Business:

Previous........................ 2.2 1.7 -0.5 3.9 0.1 1.7

Current ......................... 2.5 2.0 -0.5 3.8 0.0 1.3

Nonfarm business:

Previous........................ 1.6 1.4 -0.1 3.5 -0.3 1.9

Current ......................... 1.9 1.8 -0.1 3.4 -0.4 1.5

Manufacturing:

 Previous........................ 2.1 -0.6 -2.6 4.8 1.0 2.7 

 Current ......................... 1.9 -0.7 -2.6 4.5 0.7 2.6 

 
6 

Next release date 

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

Aug. 7, 2003. Preliminary second-quarter measures for business, nonfarm business, and 

manufacturing will be released at that time. This release will incorporate the annual benchmark 

revision to the employment levels in the BLS establishment survey data. In addition, the release 

will include changes in employment and hours due to incorporation of new ratios of the hours at 

work to hours paid and revisions due to updated population weights in the Current Population 

Survey. (See below.) All employment and hours series will incorporate new information on 

seasonal patterns. 

Current and upcoming changes to productivity and cost data 

Measures of employment and hours for self-employed persons and unpaid family workers 

in nonfarm establishments, hours of employees in government enterprises, and employment and 

hours of all persons working on farms incorporate data from the Current Population Survey

(CPS). Data from this survey were revised to incorporate population controls from the 2000 

population census and new industry and occupational classification systems. For the productivity

and costs measures, historical measures of employment and hours through the fourth quarter of 

2002 have not yet been revised to incorporate these changes to the household survey. Firstquarter measures were constructed by calculating the change in the first-quarter 2003 data to 

revised fourth-quarter 2002 data and applying the movements to unrevised fourth-quarter levels. 

Historical revisions to the employment and hours measures constructed from the CPS will be 

incorporated in the Aug. 7 release. 

At that time, historical revisions to employment and hours data for the business and 

nonfarm business sectors based on data from the nonfarm payroll series also will be incorporated. 

These revisions will include conversion to the 2002 North American Industry Classification 

System (NAICS) from the 1987 Standard Industrial Classification (SIC), the annual benchmark 

to employment levels from the Covered Employment and Wages program, and new information 

on seasonal patterns. 

In addition, new ratios of hours worked to hours paid will be incorporated into the 

measures of employee hours on Aug. 7. The Hours at Work Surveys, which had been used to 

adjust the paid hours of wage and salary employees to their hours at the workplace, will be 

replaced with a comparable set of measures derived from information on scheduled hours of 

work and paid leave collected from employers participating in the National Compensation 

Survey. These ratios will be adjusted to levels from the Hours at Work Survey and will cover the

period following 2000. 

 
7 

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 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.

 
8 

 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 117.5 140.4 119.5 137.3 111.8 116.9 112.3 115.2 

 II 117.4 139.4 118.7 137.5 111.0 117.1 113.6 115.8 

 III 117.9 139.1 117.9 137.8 111.0 116.8 115.5 116.4 

 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 122.5 142.3 116.1 139.3 112.1 113.7 119.9 116.0 

 II 123.1 142.5 115.8 140.8 112.3 114.4 119.3 116.2 

 III 124.8 144.4 115.6 141.5 112.3 113.4 121.4 116.3 

 IV 124.9 145.0 116.1 142.8 112.7 114.3 120.9 116.8 

 ANNUAL 123.8 143.5 115.9 141.1 112.3 113.9 120.4 116.3 

 2003 I r125.7 r145.7 115.9 144.2 112.7 r114.7 r121.6 117.3 

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

 Percent change from previous quarter at annual rate(5) 

 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 -2.7 0.7 4.9 2.2 

 III 1.8 -0.9 -2.6 0.9 0.0 -0.9 6.8 1.8 

 IV 7.6 3.5 -3.8 1.4 1.9 -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 3.0 1.8 -4.9 9.5 0.3 

 II 1.8 0.6 -1.2 4.3 0.7 2.4 -2.1 0.7 

 III 5.8 5.3 -0.5 2.2 0.1 -3.4 7.0 0.5 

 IV 0.3 1.7 1.5 3.6 1.6 3.3 -1.4 1.5 

 ANNUAL 4.8 2.7 -2.0 2.5 0.9 -2.2 5.0 0.4 

 2003 I r2.5 r2.0 -0.5 r3.8 r0.0 r1.3 r2.4 r1.7 

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

 Percent change from corresponding quarter of previous year 

 2001 I 1.9 1.4 -0.5 4.5 1.1 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 1.4 0.2 -2.8 6.8 0.7 

 II 4.8 2.3 -2.5 2.4 1.1 -2.3 5.0 0.3 

 III 5.9 3.8 -1.9 2.7 1.1 -3.0 5.1 0.0 

 IV 4.0 3.4 -0.6 3.3 1.0 -0.7 3.2 0.7 

 ANNUAL 4.8 2.7 -2.0 2.5 0.9 -2.2 5.0 0.4 

 2003 I r2.6 r2.4 -0.2 3.5 0.6 r0.9 r1.4 1.1 

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

 See footnotes following Table 6. June 4, 2003 

 r=revised Source: Bureau of Labor Statistics 

 
9 

 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 116.7 140.7 120.6 136.3 110.9 116.8 113.8 115.7 

 II 116.6 139.7 119.8 136.3 110.1 116.9 115.3 116.3 

 III 117.2 139.4 118.9 136.7 110.1 116.6 117.2 116.8 

 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 121.8 142.5 117.0 138.1 111.1 113.4 121.7 116.4 

 II 122.3 142.9 116.8 139.5 111.3 114.1 121.7 116.8 

 III 123.9 144.7 116.8 140.1 111.2 113.1 123.5 116.9 

 IV 124.2 145.3 117.0 141.5 111.7 113.9 123.1 117.3 

 ANNUAL 123.1 143.9 116.9 139.8 111.3 113.6 122.5 116.9 

 2003 I r124.8 r146.0 117.0 142.7 111.6 r114.4 r123.6 r117.7 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I -1.4 -0.9 0.5 2.8 -0.9 4.3 1.5 3.3 

 II -0.1 -2.7 -2.6 0.1 -3.0 0.3 5.1 2.0 

 III 2.1 -0.8 -2.9 1.0 0.1 -1.1 6.8 1.7 

 IV 7.2 2.9 -4.0 1.5 2.1 -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 -2.3 2.9 1.6 -5.3 8.8 -0.2 

 II 1.7 0.9 -0.7 4.0 0.4 2.3 0.1 1.4 

 III 5.5 5.2 -0.2 1.8 -0.3 -3.4 6.1 0.1 

 IV 0.7 1.7 0.9 3.9 1.9 3.2 -1.4 1.4 

 ANNUAL 4.8 2.7 -2.0 2.4 0.8 -2.3 5.3 0.5 

 2003 I r1.9 r1.8 -0.1 r3.4 r-0.4 r1.5 r1.7 r1.5 

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

 Percent change from corresponding quarter of previous year 

 2001 I 1.7 1.4 -0.3 4.2 0.8 2.4 1.4 2.1 

 II 0.2 -0.6 -0.8 3.7 0.3 3.5 -0.3 2.1 

 III 0.6 -0.8 -1.4 1.8 -0.9 1.2 3.8 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 1.4 0.2 -2.9 6.9 0.6 

 II 4.9 2.3 -2.5 2.3 1.0 -2.4 5.6 0.5 

 III 5.7 3.8 -1.8 2.5 0.9 -3.0 5.4 0.1 

 IV 4.1 3.5 -0.6 3.2 0.9 -0.9 3.3 0.7 

 ANNUAL 4.8 2.7 -2.0 2.4 0.8 -2.3 5.3 0.5 

 2003 I r2.4 r2.4 0.0 3.3 0.4 r0.8 r1.6 r1.1 

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

 See footnotes following Table 6. June 4, 2003 

 r=revised Source: Bureau of Labor Statistics 

 
10 

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

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

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

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

 Indexes 1992=100 

 2001 I 135.2 134.9 99.8 132.0 107.5 97.6 

 II 135.2 132.8 98.2 133.0 107.4 98.4 

 III 136.2 131.1 96.3 133.3 107.4 97.9 

 IV 137.5 129.1 93.9 134.3 108.4 97.7 

 ANNUAL 136.0 132.0 97.1 133.1 107.7 97.9 

 2002 I 140.1 129.5 92.4 135.6 109.1 96.8 

 II 141.5 130.6 92.3 137.2 109.4 96.9 

 III 143.4 131.6 91.7 137.7 109.2 96.0 

 IV 143.3 130.3 91.0 139.5 110.1 97.4 

 ANNUAL 142.1 130.5 91.8 137.5 109.4 96.8 

 2003 I r143.9 130.1 90.4 r141.1 r110.3 98.0 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.1 -7.6 -5.6 1.6 -2.1 3.7 

 II 0.0 -6.2 -6.2 3.1 -0.2 3.1 

 III 3.0 -4.9 -7.6 1.0 0.1 -1.9 

 IV 3.9 -6.1 -9.7 2.9 3.5 -1.0 

 ANNUAL 0.8 -4.9 -5.6 1.5 -1.2 0.8 

 2002 I 7.8 1.2 -6.1 3.8 2.6 -3.7 

 II 4.2 3.5 -0.7 5.0 1.4 0.7 

 III 5.5 3.0 -2.4 1.4 -0.8 -3.9 

 IV -0.5 -3.7 -3.2 5.4 3.4 5.9 

 ANNUAL 4.5 -1.1 -5.4 3.3 1.6 -1.2 

 2003 I r1.9 r-0.7 -2.6 r4.5 r0.7 r2.6 

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

 Percent change from corresponding quarter of previous year 

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

 II 0.2 -5.0 -5.2 2.9 -0.5 2.6 

 III 0.6 -5.9 -6.4 0.8 -1.8 0.2 

 IV 1.2 -6.2 -7.3 2.1 0.3 1.0 

 ANNUAL 0.8 -4.9 -5.6 1.5 -1.2 0.8 

 2002 I 3.6 -4.0 -7.4 2.7 1.5 -0.9 

 II 4.7 -1.7 -6.1 3.2 1.9 -1.5 

 III 5.3 0.3 -4.8 3.3 1.6 -2.0 

 IV 4.2 1.0 -3.1 3.9 1.6 -0.3 

 ANNUAL 4.5 -1.1 -5.4 3.3 1.6 -1.2 

 2003 I 2.8 0.5 -2.2 4.1 r1.1 1.3 

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

 See footnotes following Table 6. June 4, 2003 

 r=revised Source: Bureau of Labor Statistics 

 
11 

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

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

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

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

 Indexes 1992=100 

 2001 I 149.3 158.3 106.0 129.4 105.3 86.7 

 II 148.8 154.9 104.1 130.5 105.4 87.7 

 III 149.6 151.8 101.4 130.2 104.9 87.0 

 IV 151.0 148.6 98.5 131.8 106.4 87.3 

 ANNUAL 149.6 153.4 102.5 130.4 105.5 87.2 

 2002 I 154.7 149.4 96.5 132.7 106.7 85.8 

 II 156.8 151.2 96.4 134.8 107.5 86.0 

 III 159.8 152.6 95.5 135.2 107.3 84.6 

 IV 160.7 151.5 94.2 137.3 108.4 85.4 

 ANNUAL 158.0 151.2 95.7 135.0 107.5 85.4 

 2003 I r161.6 r151.5 r93.8 r138.8 r108.5 85.9 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.1 -8.9 -6.9 3.1 -0.6 5.3 

 II -1.4 -8.2 -6.9 3.6 0.3 5.1 

 III 2.4 -7.9 -10.0 -1.0 -1.9 -3.3 

 IV 3.5 -8.0 -11.2 5.0 5.6 1.5 

 ANNUAL -0.1 -6.3 -6.2 0.9 -1.9 0.9 

 2002 I 10.4 2.1 -7.5 2.8 1.5 -6.9 

 II 5.5 4.9 -0.5 6.7 3.0 1.1 

 III 7.9 3.8 -3.8 1.2 -1.0 -6.2 

 IV 2.3 -2.9 -5.1 6.3 4.3 4.0 

ANNUAL 5.6 -1.5 -6.7 3.5 1.9 -2.0

2003 I r2.1 r0.1 -2.0 r4.3 r0.4 2.1

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

 Percent change from corresponding quarter of previous year 

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

 II -0.8 -6.3 -5.5 2.3 -1.0 3.2 

 III -0.4 -7.8 -7.4 -0.3 -2.9 0.1 

 IV 0.6 -8.2 -8.8 2.6 0.8 2.1 

ANNUAL -0.1 -6.3 -6.2 0.9 -1.9 0.9

2002 I 3.6 -5.6 -8.9 2.6 1.3 -1.0

 II 5.4 -2.4 -7.4 3.3 2.0 -2.0 

 III 6.8 0.5 -5.9 3.9 2.3 -2.7 

 IV 6.5 1.9 -4.3 4.2 1.9 -2.1 

ANNUAL 5.6 -1.5 -6.7 3.5 1.9 -2.0

2003 I r4.4 r1.4 -2.9 r4.6 1.7 0.2

of Labor Statistics

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

 See footnotes following Table 6. June 4, 2003 

r=revised Source: Bureau

 
12 

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

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

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

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

 Indexes 1992=100 

 2001 I 123.1 112.7 91.6 134.7 109.7 109.4 

 II 123.6 111.7 90.4 135.5 109.4 109.7 

 III 124.3 111.3 89.5 137.2 110.5 110.3 

 IV 125.5 110.1 87.8 137.1 110.6 109.2 

 ANNUAL 124.1 111.5 89.8 136.1 110.1 109.7 

 2002 I 126.8 110.2 86.9 139.1 111.9 109.7 

 II 127.7 110.8 86.7 139.8 111.5 109.5 

 III 128.4 111.4 86.7 140.5 111.4 109.4 

 IV 127.1 110.1 86.6 142.0 112.1 111.7 

 ANNUAL 127.5 110.6 86.7 140.3 111.7 110.1 

 2003 I r127.8 r109.7 85.9 r143.6 r112.3 r112.4 

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

 Percent change from previous quarter at annual rate(5) 

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

 II 1.3 -3.8 -5.0 2.3 -0.9 0.9 

 III 2.6 -1.4 -3.8 5.1 4.1 2.4 

 IV 3.6 -4.0 -7.4 -0.3 0.2 -3.8 

 ANNUAL 1.6 -3.2 -4.7 2.9 0.1 1.3 

 2002 I 4.3 0.3 -3.9 6.0 4.7 1.6 

 II 2.9 1.9 -0.9 2.2 -1.3 -0.7 

 III 2.4 2.3 -0.1 1.9 -0.2 -0.4 

 IV -4.1 -4.6 -0.5 4.3 2.3 8.9 

 ANNUAL 2.7 -0.8 -3.4 3.1 1.5 0.4 

 2003 I r2.2 r-1.2 r-3.4 r4.8 r0.9 r2.5 

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

 Percent change from corresponding quarter of previous year 

 2001 I 2.1 -1.9 -3.9 3.1 -0.3 1.0 

 II 1.5 -3.4 -4.8 3.9 0.5 2.4 

 III 1.5 -3.5 -4.9 3.0 0.3 1.5 

 IV 1.2 -3.8 -5.0 1.5 -0.3 0.3 

 ANNUAL 1.6 -3.2 -4.7 2.9 0.1 1.3 

 2002 I 3.0 -2.2 -5.0 3.2 2.0 0.2 

 II 3.4 -0.8 -4.0 3.2 1.9 -0.2 

 III 3.3 0.1 -3.1 2.4 0.8 -0.9 

 IV 1.3 -0.1 -1.4 3.6 1.3 2.3 

 ANNUAL 2.7 -0.8 -3.4 3.1 1.5 0.4 

 2003 I r0.8 r-0.4 -1.2 r3.3 r0.4 r2.5 

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

 See footnotes following Table 6. June 4, 2003 

 r=revised Source: Bureau of Labor Statistics 

 
13 

 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 118.8 147.9 124.6 131.3 106.9 110.6 111.6 110.8 93.1 109.3 

 II 119.4 147.8 123.7 131.9 106.5 110.4 113.5 111.3 95.4 109.9 

 III 120.4 147.7 122.7 132.7 106.9 110.3 115.5 111.7 97.9 110.5 

 IV 123.5 149.6 121.2 133.6 107.8 108.2 114.1 109.8 107.6 109.6 

 ANNUAL 120.5 148.2 123.0 132.4 107.0 109.9 113.7 110.9 98.5 109.8 

 2002 I 124.9 150.8 120.8 134.7 108.4 107.9 114.0 109.5 107.6 109.4 

 II 126.7 152.8 120.6 136.2 108.6 107.5 114.5 109.4 107.8 109.3 

 III 127.7 153.4 120.1 137.2 108.8 107.4 115.4 109.6 104.6 109.1 

 IV 129.3 155.1 120.0 138.8 109.6 107.4 114.7 109.3 109.7 109.4 

 ANNUAL 127.1 153.0 120.4 136.7 108.8 107.5 114.6 109.5 107.4 109.3 

 2003 I 130.2 156.0 119.8 140.4 109.8 107.8 114.3 109.6 110.3 109.6 

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

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.6 -3.3 -0.7 -1.2 -4.8 1.4 10.1 3.7 -20.2 1.7 

 II 2.2 -0.5 -2.7 1.8 -1.4 -0.4 7.1 1.6 10.0 2.2 

 III 3.2 -0.3 -3.4 2.5 1.6 -0.6 7.2 1.5 10.8 2.2 

 IV 10.7 5.4 -4.8 2.6 3.2 -7.3 -4.9 -6.7 46.1 -3.3 

 ANNUAL 1.4 -0.1 -1.5 2.5 -0.3 1.0 6.5 2.5 -11.7 1.2 

 2002 I 4.7 3.3 -1.3 3.5 2.2 -1.2 -0.2 -0.9 -0.2 -0.8 

 II 5.8 5.3 -0.5 4.5 0.9 -1.3 1.7 -0.5 0.9 -0.3 

 III 3.4 1.7 -1.6 2.9 0.7 -0.5 3.1 0.5 -11.2 -0.5 

 IV 5.0 4.5 -0.5 4.9 2.8 -0.1 -2.3 -0.7 20.8 0.9 

 ANNUAL 5.5 3.2 -2.2 3.3 1.7 -2.1 0.9 -1.3 9.0 -0.5 

 2003 I 2.9 2.4 -0.5 4.7 0.8 1.7 -1.3 0.9 2.2 1.0 

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

 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 0.9 -0.1 -1.0 3.2 -0.2 2.3 6.8 3.5 -19.7 1.3 

 III 0.7 -1.1 -1.8 1.8 -0.9 1.1 7.8 2.9 -10.6 1.7 

 IV 3.3 0.3 -2.9 1.4 -0.4 -1.8 4.7 0.0 9.2 0.7 

 ANNUAL 1.4 -0.1 -1.5 2.5 -0.3 1.0 6.5 2.5 -11.7 1.2 

 2002 I 5.2 1.9 -3.0 2.6 1.4 -2.4 2.2 -1.2 15.5 0.0 

 II 6.1 3.4 -2.5 3.3 2.0 -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 4.7 3.7 -1.0 3.9 1.6 -0.8 0.6 -0.4 1.9 -0.2 

 ANNUAL 5.5 3.2 -2.2 3.3 1.7 -2.1 0.9 -1.3 9.0 -0.5 

 2003 I 4.3 3.4 -0.8 4.2 1.3 -0.1 0.3 0.0 2.5 0.3 

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

 See footnotes following Table 6. June 4, 2003 

 r=revised Source: Bureau of Labor Statistics 

 
14 

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

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

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

Statistics and the Bureau of Economic Analysis. 

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

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

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

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

per hour of all persons has differed from the initial value by between –1.5 and +1.6 index points 

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

between the fourth quarter of 1995 and the fourth quarter of 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 1978-2002 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.