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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 THURSDAY, NOVEMBER 7, 2002 

PRODUCTIVITY AND COSTS 

Third Quarter 2002 

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

productivity data—as measured by output per hour of all persons—for the third quarter of 2002. 

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

 4.3 percent in the business sector and 

 4.0 percent in the nonfarm business sector. 

Productivity increased 4.3 percent in the business sector, as output grew 4.1 percent and hours 

declined 0.1 percent. The 4.0 percent increase in nonfarm business productivity also reflected a 

4.1 percent growth in output, but a 0.1 percent rise in nonfarm business hours (table A). 

 In manufacturing, productivity increases in the third quarter were: 

 5.9 percent in manufacturing, 

 8.8 percent in durable goods manufacturing, and 

 2.0 percent in nondurable goods manufacturing. 

 The increase in manufacturing productivity compares with a 4.2-percent rise reported for 

the previous quarter (as revised). 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. Third-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 6). 
2 

Effective with today’s release, measures of hourly compensation and unit labor costs will be 

revised for the previous two quarters when preliminary estimates for a new quarter are released. 

Previously, only the most recent quarter of data was revised. For nonfinancial corporations, 

measures of productivity and output are also subject to an additional quarter of revisions. 

Business 

 From the second quarter to the third quarter of 2002, business sector productivity increased 

at a 4.3 percent annual rate. Output increased 4.1 percent, while hours of all persons engaged in 

the sector declined 0.1 percent (seasonally adjusted annual rates). After revisions, second-quarter 

productivity in the business sector rose 1.8 percent, reflecting a 0.6-percent rise in output and a 

1.2-percent decline in hours (tables B and 1). 

Hourly compensation increased at an annual rate of 5.2 percent during the third quarter of 

2002. Revised results show that hourly compensation increased 4.2 percent in the second quarter 

and 3.0 percent in the first quarter of 2002 (seasonally adjusted annual rates). This measure 

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 3.2 percent in the third quarter of 2002. 

Table A. Productivity and costs: Preliminary third-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 4.3 4.1 -0.1 5.2 3.2 0.9 

 Nonfarm business 4.0 4.1 0.1 4.8 2.9 0.8 

 Manufacturing 5.9 3.4 -2.4 4.5 2.6 -1.3 

 Durable 8.8 4.5 -4.0 4.4 2.4 -4.1 

 Nondurable 2.0 2.1 0.1 5.0 3.1 2.9 

 Percent change from same quarter a year ago 

 Business 5.5 3.5 -1.9 3.4 1.8 -1.9 

 Nonfarm business 5.3 3.5 -1.7 3.3 1.7 -2.0 

 Manufacturing 5.9 0.8 -4.8 3.6 2.0 -2.1 

 Durable 7.5 1.2 -5.9 3.7 2.1 -3.5 

 Nondurable 3.6 0.4 -3.1 3.6 2.0 0.0 
3 

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

increased at a 0.9-percent annual rate during the third quarter. These costs had increased 2.4 

percent in the second quarter, following a decrease of 4.9 percent in the first quarter of 2002 (as 

revised). The implicit price deflator for the business sector increased 0.6 percent during the third 

quarter of 2002, about the same as the 0.7 percent increase in the previous quarter. 

Nonfarm business 

 Productivity in the nonfarm business sector grew at a 4.0-percent annual rate during the 

third quarter of 2002. This increase in output per hour occurred as output increased 4.1 percent 

and hours of all persons edged up 0.1 percent (seasonally adjusted annual rates). The small rise 

in hours reflects a 0.6-percent increase in employment combined with a 0.5-percent decline in 

average weekly hours at work. Nonfarm business productivity rose 1.7 percent in the second 

quarter of 2002, as output rose 0.9 percent and hours decreased 0.7 percent (table 2). 

 Hourly compensation increased at a 4.8 percent annual rate in the third quarter of 2002. 

When the rise in consumer prices is taken into account, real hourly compensation rose at a 2.9-

percent annual rate during the July-September period. During the second quarter of 2002, real 

hourly compensation had risen 0.5 percent. 

Unit labor costs increased 0.8 percent during the third quarter of 2002. In the second 

quarter, unit labor costs in the nonfarm business sector had increased 2.2 percent. The implicit 

price deflator for nonfarm business output rose 0.2 percent in the third quarter of 2002. 

Manufacturing 

 Productivity increased 5.9 percent in manufacturing in the third quarter of 2002, as output 

grew 3.4 percent and hours of all persons fell 2.4 percent (seasonally adjusted annual rates). A 

4.2 percent increase in labor productivity was recorded in the previous quarter, reflecting a 3.5-

percent increase in output and a 0.7-percent decline in hours. Total manufacturing output has 

increased in each of the last three quarters, after having fallen in each of the six previous 

quarters. In durable goods, productivity grew 8.8 percent in the third quarter as output increased 

4.5 percent and hours of all persons fell 4.0 percent. Productivity increased 2.0 percent in 

nondurable goods, as output rose 2.1 percent and hours of all persons increased 0.1 percent 

(tables 3, 4, and 5). 

 Hourly compensation of manufacturing workers increased an average of 4.5 percent during 

the third quarter, the largest increase in this series since the third quarter of 2000, when it grew 

9.5 percent (seasonally adjusted annual rates). Hourly compensation grew 4.4 percent in durable 

goods and 5.0 percent in nondurable goods in the third quarter of 2002. When the increase in 

consumer prices is taken into account, real hourly compensation in total manufacturing rose 2.6 

percent in the third quarter. 
4 

 Unit labor costs in manufacturing decreased 1.3 percent in the third quarter of 2002. This 

was the fifth consecutive quarterly decline in these costs. In the durable goods sector, unit labor 

costs in the third quarter fell 4.1 percent. Unit labor costs rose 2.9 percent in the nondurable 

goods sector. 

Revised Measures 

 Current and previous measures for the first and second quarters of 2002 for the business, 

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

nonfarm business sectors, growth in output and productivity is slightly higher in the second 

quarter than reported on Sept. 5, based on information then available. In the first quarter of 2002, 

growth in hourly compensation in all of these sectors was revised down substantially, which 

resulted in larger declines in unit labor costs. 

Table B. 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 ....................... 1.7 0.5 -1.2 4.0 0.5 2.3 

 Current ......................... 1.8 0.6 -1.2 4.2 0.8 2.4 

Nonfarm business: 

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

 Current ......................... 1.7 0.9 -0.7 3.9 0.5 2.2 

Manufacturing: 

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

 Current ......................... 4.2 3.5 -0.7 3.2 -0.2 -1.0 

 First quarter 2002 

Business: 

 Previous ....................... 8.3 5.9 -2.2 3.8 2.3 -4.2 

 Current ......................... 8.3 5.9 -2.2 3.0 1.6 -4.9 

Nonfarm business: 

 Previous ....................... 8.6 6.2 -2.2 3.6 2.2 -4.6 

 Current ......................... 8.6 6.2 -2.2 2.9 1.4 -5.3 

Manufacturing: 

 Previous ....................... 9.7 3.0 -6.1 6.9 5.4 -2.6 

 Current ......................... 9.7 3.0 -6.1 3.8 2.4 -5.3 
5 

Revised measures: Nonfinancial Corporations 

Productivity and cost measures for nonfinancial corporations for the first and second 

quarters of 2002 also were revised to incorporate more recent information than was available on 

Sept. 5. 

Productivity and output in this sector were revised up for the second quarter of 2002. 

Productivity grew at an annual rate of 5.9 percent, compared with the increase of 5.0 percent 

published Sept. 5. Hourly compensation was revised up much less than output per hour, so unit 

labor costs fell more, 1.3 percent, than the 0.8-percent decline reported at that time. Unit profits 

rose 0.9 percent in the second quarter of 2002 compared with the preliminary estimate of a 3.7- 

percent drop. Nonfinancial corporate output, productivity, and hourly compensation grew less 

during the first quarter of 2002 than reported Sept. 5. Because hourly compensation was revised 

down more than productivity, unit labor costs were revised down as well (tables C and 6). 

 

Table C. Nonfinancial corporations: Previous and revised productivity and cost measures 

Quarterly percent changes at seasonally adjusted annual rates 

 

Productivity Output Hours 

Hourly 

compensation 

Real 

hourly 

compensation 

Unit 

labor 

costs 

Unit 

profits 

Implicit 

price 

deflator 

 Second quarter 2002 

Previous............ 5.0 4.4 -0.6 4.2 0.8 -0.8 -3.7 -0.4 

Current ............. 5.9 5.3 -0.5 4.4 1.0 -1.3 0.9 -0.4 

 First quarter 2002 

Previous............ 5.1 3.7 -1.3 4.1 2.6 -0.9 -0.6 -0.8 

Current ............. 4.6 3.3 -1.3 3.4 2.0 -1.1 -0.1 -0.8 

Next release date

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

Dec. 4, 2002. Third-quarter measures for nonfinancial corporations and revised third-quarter 

measures for business, nonfarm business, and manufacturing will be released at that time. 
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 r139.3 r112.0 r113.7 r119.9 116.0 

 II r123.1 142.5 115.8 r140.8 r112.2 r114.4 r119.3 r116.2 

 III 124.4 144.0 115.7 142.5 113.1 114.6 119.4 116.4 

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

 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 r3.0 r1.6 r-4.9 r9.6 0.3 

 II r1.8 r0.6 -1.2 r4.2 r0.8 r2.4 r-2.0 r0.7 

 III 4.3 4.1 -0.1 5.2 3.2 0.9 0.2 0.6 

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

 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 r1.4 r0.2 r-2.8 r6.8 0.7 

 II 4.8 r2.3 -2.5 r2.4 r1.1 r-2.4 r5.0 0.3 

 III 5.5 3.5 -1.9 3.4 1.8 -1.9 3.3 0.0 

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

 See footnotes following Table 6. November 7, 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 r138.2 r111.1 r113.4 r121.7 116.4 

 II 122.3 r142.9 116.8 r139.5 r111.2 r114.0 r121.7 116.8 

 III 123.5 144.3 116.8 141.1 112.0 114.3 121.5 116.9 

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

 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 r2.9 r1.4 r-5.3 r8.8 -0.2 

 II r1.7 r0.9 -0.7 r3.9 r0.5 r2.2 r0.1 r1.4 

 III 4.0 4.1 0.1 4.8 2.9 0.8 -0.7 0.2 

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

 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 r1.4 r0.1 r-2.9 r6.9 0.6 

 II r4.9 r2.3 -2.5 r2.3 r1.0 r-2.4 r5.6 r0.5 

 III 5.3 3.5 -1.7 3.3 1.7 -2.0 3.7 0.1 

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

 See footnotes following Table 6. November 7, 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 r135.6 r109.0 r96.2 

 II 142.3 131.3 92.3 r136.6 r108.9 r96.0 

 III 144.4 132.4 91.7 138.1 109.6 95.7 

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

 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 r3.8 r2.4 r-5.3 

 II r4.2 r3.5 -0.7 r3.2 r-0.2 r-1.0 

 III 5.9 3.4 -2.4 4.5 2.6 -1.3 

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

 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 r2.7 r1.4 r-1.3 

 II r5.1 r-1.3 -6.1 r2.7 r1.4 r-2.3 

 III 5.9 0.8 -4.8 3.6 2.0 -2.1 

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

 See footnotes following Table 6. November 7, 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 r132.7 r106.7 r85.2 

 II 158.0 152.3 96.4 r133.6 r106.5 r84.6 

 III 161.4 154.0 95.4 135.0 107.2 83.7 

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

 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 r2.8 r1.3 r-9.2 

 II 6.0 5.4 r-0.5 2.8 -0.6 r-3.0 

 III 8.8 4.5 -4.0 4.4 2.4 -4.1 

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

 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 r2.6 r1.3 r-1.9 

 II r5.9 -1.9 -7.4 r2.4 r1.1 r-3.4 

 III 7.5 1.2 -5.9 3.7 2.1 -3.5 

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

 See footnotes following Table 6. November 7, 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 128.3 r111.2 r86.7 r140.4 r112.0 r109.5 

 III 128.9 111.8 86.7 142.1 112.8 110.3 

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

 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 r6.0 r4.5 r0.6 

 II r2.4 r1.5 r-0.9 r3.9 r0.5 r1.5 

 III 2.0 2.1 0.1 5.0 3.1 2.9 

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

 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 r3.7 r-0.4 -4.0 r3.6 r2.3 r-0.1 

 III 3.6 0.4 -3.1 3.6 2.0 0.0 

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

 See footnotes following Table 6. November 7, 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 r122.6 r148.1 120.8 r134.7 r108.3 r109.8 r116.1 r111.5 r109.5 111.4 

 II r124.4 r150.0 120.6 r136.2 r108.6 r109.5 r116.6 r111.4 r109.8 111.3 

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

 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 r4.6 r3.3 -1.3 r3.4 r2.0 r-1.1 r-0.2 r-0.9 r-0.1 -0.8 

 II r5.9 r5.3 r-0.5 r4.4 r1.0 r-1.3 r1.7 r-0.5 r0.9 -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 r5.2 r2.0 -3.1 r2.6 r1.4 r-2.5 r2.1 -1.2 r15.4 0.0 

 II r6.1 r3.4 -2.5 r3.3 r1.9 r-2.7 r0.8 r-1.7 r13.0 -0.6 

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

 See footnotes following Table 6. November 7, 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 –1.5 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 second 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.