Internet address: http://www.bls.gov/lpc/ USDL 08-1251 

Historical, technical TRANSMISSION OF THIS 

 information: (202) 691-5606 MATERIAL IS EMBARGOED 

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

Media contact: (202) 691-5902 THURSDAY, SEPTEMBER 4, 2008. 

PRODUCTIVITY AND COSTS 

Second Quarter 2008, Revised 

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

productivity data—as measured by output per hour of all persons—for the second quarter of 

2008. The seasonally adjusted annual rates of productivity change in the second quarter were: 

4.3 percent in the business sector and 

4.3 percent in the nonfarm business sector. 

In both sectors, the second-quarter productivity gains were larger than the preliminary estimates 

reported on August 8. 

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

 -2.2 percent in manufacturing, 

-4.5 percent in durable goods manufacturing, and 

 0.2 percent in nondurable goods manufacturing. 

 Manufacturing productivity decreased faster in the second quarter of 2008 than was 

reported on August 8, reflecting downward revisions to output per hour in both durable and 

nondurable manufacturing. Output and hours in manufacturing, which includes about 12 percent 

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

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

table A and appear in detail in tables 1 through 5; the differences between these measures and 

the preliminary second-quarter figures issued on August 8 are shown in table C. 

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

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

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

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

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

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

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

Table A. Productivity and costs: Revised second-quarter 2008 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 3.2 -1.0 4.0 -1.0 -0.4 

Nonfarm business 4.3 3.4 -0.8 3.7 -1.3 -0.5 

Manufacturing -2.2 -3.7 -1.5 3.9 -1.1 6.2 

 Durable -4.5 -5.9 -1.5 4.1 -0.8 9.0 

 Nondurable 0.2 -1.3 -1.6 3.3 -1.6 3.1 

 Percent change from same quarter a year ago 

Business 3.2 2.2 -1.0 3.9 -0.4 0.7 

Nonfarm business 3.4 2.2 -1.1 4.0 -0.2 0.6 

Manufacturing 2.4 -0.2 -2.5 3.8 -0.4 1.4 

 Durable 2.4 0.1 -2.3 3.4 -0.8 1.0 

 Nondurable 2.5 -0.6 -3.0 4.5 0.2 1.9 

Business 

 Labor productivity in the business sector grew 4.3 percent from the first quarter to the 

second quarter of 2008, as output increased 3.2 percent and hours worked by all persons engaged 

in the sector—employees, proprietors, and unpaid family workers—fell 1.0 percent (seasonally 

adjusted annual rates). Output per hour increased 3.2 percent over the past four quarters, 

reflecting a 2.2 percent increase in output and a 1.0 percent decrease in hours (tables A and 1). 

The four-quarter decline in hours was the largest since a 1.3 percent decline for the period 

ending with the second quarter of 2003. 

 Hourly compensation in the business sector grew at a 4.0 percent annual rate in the 

second quarter of 2008. 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, declined 1.0 percent in the second quarter of 

2008 after falling 0.6 percent in the first quarter of the year. 

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

decreased 0.4 percent in the second quarter of 2008. From the second quarter of 2007 to the 

second quarter of 2008 these costs increased 0.7 percent. The implicit price deflator for business 

output, which exhibits changes in unit labor costs and unit nonlabor payments, rose 0.9 percent 

in the second quarter of 2008. 
3 

Nonfarm business 

 Productivity in the nonfarm business sector grew at a 4.3 percent annual rate in the 

second quarter of 2008, reflecting an increase of 3.4 percent in output and a decrease of 0.8 

percent in hours of all persons (tables A and 2). From the second quarter of 2007 to the second 

quarter of 2008, nonfarm business productivity grew 3.4 percent, faster than the 2.5 percent 

average rate from 2000 to 2007. Hours decreased 1.1 percent over the past four quarters—the 

largest four-quarter decline since a 2.1 percent decline for the period ending in the third quarter 

of 2002. 

 Hourly compensation increased 3.7 percent in the second quarter of 2008, but when the 

5.0 percent increase in consumer prices was taken into account, real hourly compensation 

declined 1.3 percent. 

 Unit labor costs declined 0.5 percent in the second quarter of 2008, but rose 0.6 percent 

over the last four quarters (chart 2). The implicit price deflator for nonfarm business output rose 

0.9 percent in the second quarter. 

-6

-4

-2

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008

Percent change

From previous quarter, compound annual rate

From same quarter a year ago

Chart 1. Output per Hour, Nonfarm Business, all persons, 2001:1-2007:4 Chart 1. Output per Hour, Nonfarm Business, all persons, 2001:1-2008:2

 

-6

-4

-2

0

2

4

6

8

10

12

2001 2002 2003 2004 2005 2006 2007 2008

Percent change

From previous quarter, compound annual rate

From same quarter a year ago

Chart 2. Unit Labor Costs, Nonfarm Business, all persons, 2001:1-2008:2

Manufacturing

 Productivity decreased 2.2 percent in manufacturing in the second quarter of 2008, as 

output fell 3.7 percent and hours of all persons fell 1.5 percent (seasonally adjusted annual rates). 

This was the largest quarterly decline in manufacturing productivity since a 2.5 percent decrease 

in the second quarter of 1989; it was concentrated in the durable goods sector, where 

productivity declined 4.5 percent. In nondurable goods, productivity edged up 0.2 percent as 

output and hours fell 1.3 percent and 1.6 percent, respectively (tables A, 3, 4, and 5). 

 The hourly compensation of all manufacturing workers increased 3.9 percent during the 

second quarter of 2008, reflecting increases in hourly compensation of 4.1 percent in durable 

goods industries and 3.3 percent in the nondurable goods sector. Real hourly compensation in 

the total manufacturing sector fell 1.1 percent in the second quarter after consumer prices were 

taken into account. 

 Unit labor costs in manufacturing increased 6.2 percent in the second quarter of 2008, as 

unit labor costs jumped 9.0 percent in durable goods industries and increased 3.1 percent in 

nondurable goods industries. 
4 

-16

-12

-8

-4

0

4

8

12

16

2001 2002 2003 2004 2005 2006 2007 2008

Percent change

From previous quarter, compound annual rate

From same quarter a year ago

Chart 3. Output per Hour, Manufacturing, all persons, 2001:1-2008:2

 

-16

-12

-8

-4

0

4

8

12

16

2001 2002 2003 2004 2005 2006 2007 2008

Percent change

From previous quarter, compound annual rate

From same quarter a year ago

Chart 4. Unit Labor Costs, Manufacturing, all persons, 2001:1-2008:2

Nonfinancial corporations

Preliminary second-quarter 2008 measures of productivity and costs were reported today 

for nonfinancial corporations. Productivity increased 5.6 percent during the second quarter, 

reflecting a 3.8 percent rise in output and a 1.7 percent fall in employee hours (tables B and 6). 

Over the last four quarters output per hour increased 2.3 percent, output increased 1.7 percent, 

and hours worked declined 0.5 percent—the first decline in hours since the four quarters ending 

with fourth-quarter 2003, when hours declined 0.9 percent. Nonfinancial corporations include 

all corporations doing business in the United States except those classified as depository 

institutions, nondepository institutions, security and commodity brokers, insurance carriers, 

regulated investment offices, small business investment offices, and real estate investment trusts. 

Table B. Nonfinancial corporations: Preliminary second-quarter 2008 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 

2008 II 5.6 3.8 -1.7 3.7 -1.2 -1.8 -24.7 -3.6 

Percent change from same quarter a year ago 

2008 II 2.3 1.7 -0.5 3.8 -0.4 1.5 -18.8 -0.9 

Hourly compensation rose 3.7 percent in the second quarter of 2008, but when the rise in 

consumer prices is taken into account, real hourly compensation fell 1.2 percent. Unit labor 

costs for nonfinancial corporations decreased 1.8 percent in the second quarter of 2008. 

Unit profits fell 24.7 percent in the second quarter of 2008. This was the fourth 

consecutive double-digit decline in this measure (table 6). The implicit price deflator for 
5 

nonfinancial corporate output fell 3.6 percent in the second quarter and 0.9 percent over the past 

four quarters. 

Revised Measures 

Current and previous measures for the first and second quarters of 2008 for the business, 

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

In the second quarter of 2008, productivity was revised up in the business and nonfarm 

business sectors, as output was revised up significantly and hours decreased more than 

previously reported. In both of these sectors the upward revisions to productivity were much 

larger than those to hourly compensation, and unit labor costs were revised down. 

Productivity was revised down in the manufacturing sector in the second quarter of 2008 

due to both a downward revision to output and an upward revision to hours. The downward 

revision to productivity was largely offset by a downward revision to hourly compensation, so 

unit labor costs rose only slightly more than previously reported. 

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

related measures 

(Quarterly percent changes a seasonally adjusted an ual rates) t n

Sector 

Productivity Output Hours 

Hourly 

compensation 

Real 

hourly 

compensation 

Unit 

labor 

costs 

Second quarter 2008 

Business: 

 Previous ....................... 2.3 1.5 -0.7 3.8 -1.2 1.5 

 Revised......................... 4.3 3.2 -1.0 4.0 -1.0 -0.4 

Nonfarm business: 

 Previous ....................... 2.2 1.7 -0.5 3.6 -1.4 1.3 

 Revised......................... 4.3 3.4 -0.8 3.7 -1.3 -0.5 

Manufacturing: 

 Previous ....................... -1.4 -3.5 -2.0 4.6 -0.4 6.1 

 Revised......................... -2.2 -3.7 -1.5 3.9 -1.1 6.2 

First quarter 2008 

Business: 

 Previous ....................... 2.2 0.7 -1.5 5.0 0.6 2.7 

 Revised......................... 2.3 0.7 -1.6 3.6 -0.6 1.3 

Nonfarm business: 

 Previous ....................... 2.6 0.9 -1.6 5.2 0.8 2.5 

 Revised......................... 2.6 0.9 -1.7 3.8 -0.4 1.2 

Manufacturing: 

 Previous ....................... 3.4 -0.8 -4.0 6.2 1.8 2.8 

 Revised......................... 3.3 -0.9 -4.0 3.8 -0.5 0.5 
6 

In the first quarter of 2008, hourly compensation was updated to reflect revised estimates 

of compensation released by the Bureau of Economic Analysis of the U.S. Department of 

Commerce August 28. As revised, hourly compensation increased 3.6 percent in the business 

sector, and 3.8 percent in both the nonfarm business and manufacturing sectors. In all of the 

major sectors, hourly compensation grew more slowly in the first quarter than BLS reported 

August 8, therefore unit labor costs in these sectors rose less than in preliminary estimates. 

Revised Measures: Nonfinancial Corporations 

Data for the first quarter of 2008 were also revised for the nonfinancial corporate sector 

(table D). Productivity was revised down along with output; hours were not revised. Hourly 

compensation was revised down more than productivity; revised unit labor costs increased 3.2 

percent, rather than 3.9 percent as reported August 8. 

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

(Quarterly percent hanges at seasonall adjuste annual rat s) c y d e

Productivity Output Hours 

Hourly 

compensation 

Real 

hourly 

compensation 

Unit 

labor 

costs 

Unit 

profits 

Implicit 

price 

deflator

First quarter 2008 

Previous ........... 1.0 -0.1 -1.1 4.9 0.6 3.9 -14.7 0.5 

Revised............. -0.2 -1.4 -1.1 2.9 -1.3 3.2 -13.6 0.5 

Next release date 

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

November 6, 2008. Preliminary third-quarter measures for business, nonfarm business, and 

manufacturing will be released at that time.
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. Weekly paid 

hours are adjusted to hours at work using data from the National Compensation Survey (NCS). 

The BLS Hours at Work survey, conducted for this purpose, was used for earlier years. The 

Office of Productivity and Technology estimates average weekly hours at work for 

nonproduction and supervisory workers using information from the Current Population Survey 

(CPS), the CES, and the NCS. 

Data from the CPS are used for farm labor, nonfarm proprietors, and nonfarm unpaid 

family workers. Estimates of labor input for government enterprises are derived from the CPS, 

the CES, and the National Income and Product Accounts (NIPA) prepared by the Bureau of 

Economic Analysis (BEA) of the Department of Commerce. 

The CES measures jobs, counting a person who is employed by two or more 

establishments at each place of employment. In contrast, the CPS features measures of 

employment that count each person only once and classify each person according to his or her 

primary job; hours worked at all jobs by that person accrue to his or her primary job. However, 

the CPS also collects more detailed information on employment and hours worked at primary 

jobs and all other jobs, separately. The BLS productivity measures use the more detailed 

information on employment and hours to assign all hours worked to the correct industrial sector 

and avoid duplicating hours data from the CES. 

Output: Business sector output is a chain-type, current-weighted index constructed after 

excluding from gross domestic product (GDP) the following outputs: general government, 

nonprofit institutions, and private households (including owner-occupied housing). 

Corresponding exclusions also are made in labor inputs. Business output accounted for about 78 

percent of the value of GDP in 2000. Nonfarm business, which excludes farming, accounted for 

about 77 percent of GDP in 2000. 

Annual indexes for manufacturing and its durable and nondurable goods components are 

constructed by deflating current-dollar industry value of production data from the U.S. Bureau of 

the Census with deflators from the BLS. These deflators are based on data from the BLS 

producer price program and other sources. The industry shipments are aggregated using annual 

weights, and intrasector transactions are removed. Quarterly manufacturing output measures are 

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

Federal Reserve System, adjusted to be consistent with annual indexes of manufacturing sector 

output prepared by BLS. Durables include the following 3-digit NAICS industries: wood 

product manufacturing; nonmetallic mineral product manufacturing; primary metal 

manufacturing; fabricated metal product manufacturing; machinery manufacturing; computer 

and electronic product manufacturing; electrical equipment and appliance manufacturing; 

transportation equipment manufacturing; furniture and related product manufacturing; and 

miscellaneous manufacturing. Nondurables include: food manufacturing; beverage and tobacco 

product manufacturing; textile mills; textile product mills; apparel manufacturing; leather and 

allied product manufacturing; paper manufacturing; printing and related support activities; 

petroleum and coal products manufacturing; chemical manufacturing; and plastics and rubber 

products manufacturing. 

Nonfinancial corporate output is a chain-type, current-weighted index calculated on the 

basis of the costs incurred and the incomes earned from production. The output measure 

excludes the following outputs from GDP: general government; nonprofit institutions; private 

households; unincorporated business; and those corporations classified as offices of bank 
8 

holding companies, offices of other holding companies, or offices in the finance and insurance 

sector. Nonfinancial corporations accounted for about 54 percent of the value of GDP in 2000. 

Productivity: These productivity measures describe the relationship between real output and the 

labor time involved in its production. They show the changes from period to period in the 

amount of goods and services produced per hour. Although these measures relate output to hours 

at work of all persons engaged in a sector, they do not measure the specific contribution of labor, 

capital, or any other factor of production. Rather, they reflect the joint effects of many 

influences, including changes in technology; capital investment; level of output; utilization of 

capacity, energy, and materials; the organization of production; managerial skill; and the 

characteristics and effort of the work force. 

Labor Compensation: Estimates of labor compensation by major sector, required for measures 

of hourly compensation and unit labor costs, are based primarily on employee compensation data 

from the NIPA, prepared by the BEA. The compensation of employees in general government, 

nonprofit institutions and private households are subtracted from compensation of domestic 

employees to derive employee compensation for the business sector. The labor compensation of 

proprietors cannot be explicitly identified and must be estimated. This is done by assuming that 

proprietors have the same hourly compensation as employees in the same sector. The quarterly 

labor productivity and cost measures do not contain estimates of compensation for unpaid family 

workers. 

Unit Labor Costs: The measures of unit labor costs in this release describe the relationship 

between compensation per hour and productivity, or real output per hour, and can be used as an 

indicator of inflationary pressure on producers. Increases in hourly compensation increase unit 

labor costs; labor productivity increases offset compensation increases and lower unit labor 

costs. 

Presentation of the data: The quarterly data in this release are presented in three ways; as 

index number series where 1992=100, as percent changes from the corresponding quarter of the 

previous year, and as percent changes from the previous quarter presented at a compound annual 

rate. Annual data are presented both as index number series and percent changes from the 

previous year. 

 The index numbers and rates of change reported in the productivity and costs news 

release are rounded to one decimal place. All percent changes in this release and on the BLS 

web site are calculated using index numbers to three decimal places. These index numbers are 

available at the BLS web site, http://www.bls.gov/data/home.htm, or by contacting the BLS 

Division of Major Sector Productivity. (Telephone 202-691-5606 or email 

DPRWEB@BLS.GOV) 

Information in this release will be made available to sensory-impaired individuals upon 

request. Voice phone: 202-691-5606; Federal Relay Service number: 1-800-877-8339. 
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 

2006 I r136.1 162.8 r119.6 r168.0 r120.7 r123.5 r133.4 127.2 

 II r136.6 164.0 r120.1 r168.1 r119.7 r123.1 r136.2 128.0 

 III r135.9 164.1 r120.8 r169.0 r119.1 r124.3 r136.2 128.8 

 IV r135.9 164.8 r121.2 r172.6 r122.1 r127.0 r133.4 129.4 

 ANNUAL r136.1 163.9 r120.4 r169.5 r120.4 r124.5 r134.8 128.3 

2007 I r135.9 164.5 r121.0 r174.7 r122.4 128.5 134.3 130.7 

 II r137.6 166.8 r121.2 r175.5 r121.6 r127.5 r137.4 131.2 

 III r139.7 169.0 r121.0 r177.0 r121.9 r126.7 r139.7 131.6 

 IV r139.7 168.8 r120.8 r178.9 r121.7 r128.1 r139.2 132.2 

 ANNUAL 138.2 167.3 121.0 176.5 121.9 127.7 137.7 131.4 

2008 I 140.5 169.1 120.3 r180.6 r121.5 r128.5 r140.2 132.9 

 II r142.0 r170.4 r120.0 r182.3 r121.2 r128.4 r141.3 r133.2 

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

 Percent change from previous quarter at annual rate(5) 

2006 I 2.6 5.6 3.0 5.5 3.6 2.8 3.1 3.0 

 II 1.4 2.9 1.5 0.2 -3.3 -1.2 8.6 2.6 

 III -2.0 0.3 2.4 2.0 -1.9 4.1 -0.1 2.4 

 IV 0.2 1.7 1.5 9.0 r10.6 8.8 -8.0 1.9 

 ANNUAL 0.9 3.0 2.1 3.8 0.5 2.9 3.3 3.0 

2007 I r-0.1 -0.7 r-0.6 4.8 1.1 4.8 2.8 4.0 

 II 5.0 5.6 0.6 1.9 -2.6 -2.9 9.6 1.7 

 III 6.2 5.5 -0.7 3.6 0.8 r-2.5 6.9 1.1 

 IV 0.1 -0.6 -0.7 4.4 -0.6 4.3 -1.6 2.0 

 ANNUAL 1.5 2.0 0.5 4.2 1.3 2.6 2.1 2.4 

2008 I r2.3 0.7 r-1.6 r3.6 r-0.6 r1.3 r3.1 2.0 

 II r4.3 r3.2 r-1.0 r4.0 r-1.0 r-0.4 r3.0 r0.9 

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

 Percent change from corresponding quarter of previous year 

2006 I 1.3 3.6 2.3 r4.3 0.5 2.9 3.9 3.3 

 II 1.7 3.5 1.8 4.0 0.1 2.3 5.2 3.4 

 III 0.2 2.4 2.2 2.9 -0.4 2.7 3.5 3.0 

 IV 0.5 2.6 2.1 4.1 2.1 3.6 0.7 2.5 

 ANNUAL 0.9 3.0 2.1 3.8 0.5 2.9 3.3 3.0 

2007 I -0.1 1.0 1.2 3.9 1.5 4.1 0.7 2.7 

 II r0.7 1.7 r1.0 4.4 1.7 3.6 0.9 2.5 

 III 2.8 3.0 0.2 4.8 2.4 1.9 2.6 2.2 

 IV 2.8 2.4 r-0.3 3.7 -0.3 0.9 4.3 2.2 

 ANNUAL 1.5 2.0 0.5 4.2 1.3 2.6 2.1 2.4 

2008 I 3.4 2.8 -0.6 r3.4 r-0.7 r0.0 r4.4 1.7 

 II r3.2 r2.2 r-1.0 r3.9 r-0.4 r0.7 r2.8 r1.5 

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

See footnotes following Table 6. September 4, 2008 

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 

2006 I r135.1 163.2 r120.8 r166.8 r119.8 r123.5 r135.5 127.9 

 II r135.7 164.3 r121.1 r167.1 r118.9 r123.2 r138.6 128.8 

 III r135.0 164.4 r121.8 r167.9 r118.3 r124.4 r138.3 129.5 

 IV r135.0 165.0 r122.2 r171.7 r121.4 r127.1 r134.8 130.0 

 ANNUAL r135.2 164.2 r121.5 r168.4 r119.6 r124.6 r136.8 129.1 

2007 I r135.0 164.7 r122.0 r173.7 r121.8 128.7 r135.2 131.1 

 II r136.4 167.0 r122.4 r174.1 r120.7 r127.7 r138.2 131.5 

 III r138.3 169.2 r122.3 r175.5 r120.8 r126.9 r140.3 131.8 

 IV r138.6 168.9 r121.9 r177.8 r120.9 r128.3 r139.8 132.5 

 ANNUAL 137.1 167.5 122.2 175.3 121.1 127.9 138.4 131.7 

2008 I 139.5 169.3 121.4 r179.5 r120.8 r128.7 r141.0 133.2 

 II r141.0 r170.7 r121.1 r181.1 r120.4 r128.5 r142.2 r133.5 

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

 Percent change from previous quarter at annual rate(5) 

2006 I 2.5 6.0 3.3 5.2 3.3 2.6 3.9 3.1 

 II 1.8 2.9 1.1 0.7 -2.8 -1.1 9.4 2.9 

 III -2.1 0.3 2.4 r1.9 -2.0 4.1 -0.9 2.1 

 IV 0.2 1.4 1.2 r9.3 11.0 9.1 -9.5 1.5 

 ANNUAL 1.0 3.2 2.2 3.8 0.5 2.8 3.6 3.1 

2007 I 0.0 -0.9 r-0.8 4.9 1.2 4.9 0.9 3.4 

 II 4.1 5.8 1.6 0.8 -3.6 -3.2 9.4 1.5 

 III 5.8 5.5 -0.3 3.3 0.5 -2.4 6.3 0.9 

 IV 0.8 -0.7 -1.6 r5.3 r0.3 4.5 r-1.5 2.1 

 ANNUAL 1.4 2.0 0.5 4.1 1.3 2.7 1.2 2.1 

2008 I 2.6 0.9 r-1.7 r3.8 r-0.4 r1.2 r3.6 2.1 

 II r4.3 r3.4 r-0.8 r3.7 r-1.3 r-0.5 r3.3 r0.9 

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

 Percent change from corresponding quarter of previous year 

2006 I 1.3 3.7 2.4 4.2 0.5 2.9 4.3 3.4 

 II 1.7 3.7 2.0 3.9 0.0 2.2 5.9 3.6 

 III 0.3 2.6 2.3 2.9 -0.5 2.6 3.8 3.1 

 IV 0.6 2.6 2.0 4.3 2.2 3.6 0.5 2.4 

 ANNUAL 1.0 3.2 2.2 3.8 0.5 2.8 3.6 3.1 

2007 I 0.0 0.9 r1.0 4.2 1.7 4.2 -0.2 2.5 

 II 0.5 1.6 1.1 4.2 1.5 3.7 -0.2 2.1 

 III 2.5 2.9 0.4 r4.5 r2.1 2.0 1.5 1.8 

 IV 2.7 2.4 -0.3 3.6 -0.4 0.9 3.7 2.0 

 ANNUAL 1.4 2.0 0.5 4.1 1.3 2.7 1.2 2.1 

2008 I 3.3 2.8 -0.5 r3.3 r-0.8 r0.0 r4.3 1.6 

 II r3.4 r2.2 r-1.1 r4.0 r-0.2 r0.6 r2.9 r1.5 

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

See footnotes following Table 6. September 4, 2008 

r=revised Source: Bureau of Labor Statistics 
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 

2006 I 172.6 147.2 85.3 170.9 122.7 99.0 

 II 172.7 147.4 85.4 169.5 120.7 98.2 

 III 174.5 148.0 84.8 170.3 120.0 97.6 

 IV 175.4 147.4 84.0 174.6 123.5 99.5 

 ANNUAL 173.8 147.5 84.9 171.3 121.7 98.6 

2007 I 177.0 147.8 83.5 176.9 124.0 100.0 

 II 178.7 149.6 83.7 176.4 122.3 98.7 

 III 180.6 151.2 83.7 176.4 121.4 97.6 

 IV 182.5 151.0 82.8 179.7 122.2 98.5 

 ANNUAL 179.7 149.9 83.4 177.3 122.5 98.7 

2008 I r184.0 r150.7 81.9 r181.4 r122.1 r98.6 

 II r183.0 r149.3 r81.6 r183.1 r121.7 r100.1 

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

 Percent change from previous quarter at annual rate(5) 

2006 I -0.6 1.8 2.4 14.3 12.3 15.0 

 II 0.2 0.6 0.4 -3.1 -6.5 -3.3 

 III 4.3 1.6 -2.5 1.8 -2.1 -2.3 

 IV 2.2 -1.7 -3.8 10.4 12.1 8.0 

 ANNUAL 1.1 1.8 0.8 4.1 0.8 3.0 

2007 I 3.6 1.2 -2.3 5.5 1.8 1.8 

 II 3.8 4.9 1.0 -1.1 -5.5 -4.8 

 III 4.5 4.3 -0.2 -0.1 -2.8 -4.4 

 IV 4.2 -0.4 -4.4 7.8 2.7 3.4 

 ANNUAL 3.4 1.6 -1.7 3.5 0.7 0.1 

2008 I r3.3 r-0.9 -4.0 r3.8 r-0.5 r0.5 

 II r-2.2 r-3.7 r-1.5 r3.9 r-1.1 r6.2 

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

 Percent change from corresponding quarter of previous year 

2006 I 1.5 2.4 0.9 5.4 1.6 3.8 

 II 0.4 2.1 1.7 3.3 -0.6 2.9 

 III 0.9 2.3 1.4 2.3 -1.0 1.4 

 IV 1.5 0.6 -0.9 5.6 3.6 4.1 

 ANNUAL 1.1 1.8 0.8 4.1 0.8 3.0 

2007 I 2.6 0.4 -2.1 3.5 1.1 0.9 

 II 3.5 1.5 -1.9 4.1 1.4 0.6 

 III 3.5 2.1 -1.3 3.6 1.2 0.0 

 IV 4.0 2.5 -1.5 2.9 -1.0 -1.1 

 ANNUAL 3.4 1.6 -1.7 3.5 0.7 0.1 

2008 I r3.9 r1.9 -1.9 r2.5 r-1.6 r-1.4 

 II r2.4 r-0.2 r-2.5 r3.8 r-0.4 r1.4 

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

See footnotes following Table 6. September 4, 2008 

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 

2006 I 198.8 179.6 90.3 166.0 119.2 83.5 

 II 198.9 180.5 90.7 164.6 117.1 82.7 

 III 201.7 181.1 89.8 165.3 116.5 81.9 

 IV 202.4 180.1 89.0 170.2 120.4 84.1 

 ANNUAL 200.4 180.3 90.0 166.5 118.3 83.1 

2007 I 204.4 180.3 88.2 173.0 121.3 84.7 

 II 207.9 183.9 88.4 172.5 119.6 83.0 

 III 210.9 186.9 88.6 172.2 118.6 81.7 

 IV 214.3 187.0 87.3 175.5 119.4 81.9 

 ANNUAL 209.4 184.5 88.1 173.3 119.7 82.8 

2008 I r215.4 r186.8 86.7 r176.6 r118.9 r82.0 

 II r213.0 r184.0 r86.4 r178.4 r118.6 r83.8 

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

 Percent change from previous quarter at annual rate(5) 

2006 I -1.8 0.4 2.3 13.7 11.7 15.9 

 II 0.3 2.1 1.8 -3.3 -6.6 -3.6 

 III 5.7 1.2 -4.3 1.6 -2.3 -3.9 

 IV 1.4 -2.1 -3.4 12.6 14.4 11.1 

 ANNUAL 2.2 3.3 1.1 3.9 0.6 1.7 

2007 I 3.9 0.4 -3.4 6.7 3.0 2.7 

 II 7.1 8.2 1.0 -1.2 -5.5 -7.7 

 III 6.0 6.8 0.8 -0.7 -3.3 -6.2 

 IV 6.6 0.3 -6.0 7.9 2.8 1.2 

 ANNUAL 4.5 2.3 -2.0 4.1 1.3 -0.3 

2008 I r2.0 r-0.5 -2.5 r2.5 r-1.7 r0.4 

 II r-4.5 r-5.9 r-1.5 r4.1 r-0.8 r9.0 

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

 Percent change from corresponding quarter of previous year 

2006 I 3.2 4.8 1.6 4.9 1.1 1.6 

 II 2.0 4.6 2.5 3.1 -0.8 1.1 

 III 2.2 3.6 1.4 1.9 -1.5 -0.4 

 IV 1.4 0.4 -1.0 5.9 3.9 4.5 

 ANNUAL 2.2 3.3 1.1 3.9 0.6 1.7 

2007 I 2.8 0.4 -2.4 4.3 1.8 1.4 

 II 4.5 1.8 -2.5 4.8 2.1 0.3 

 III 4.6 3.2 -1.3 4.2 1.8 -0.3 

 IV 5.9 3.9 -1.9 3.1 -0.8 -2.6 

 ANNUAL 4.5 2.3 -2.0 4.1 1.3 -0.3 

2008 I 5.4 3.6 -1.7 r2.1 r-2.0 r-3.2 

 II r2.4 r0.1 r-2.3 r3.4 r-0.8 r1.0 

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

See footnotes following Table 6. September 4, 2008 

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 

2006 I 148.0 115.0 77.7 178.0 127.8 120.2 

 II 148.4 114.8 77.3 176.6 125.7 119.0 

 III 149.0 115.4 77.4 177.8 125.3 119.3 

 IV 150.3 115.1 76.6 180.4 127.6 120.0 

 ANNUAL 148.9 115.1 77.2 178.2 126.6 119.6 

2007 I 151.2 115.6 76.5 181.9 127.5 120.3 

 II 151.4 116.0 76.6 181.4 125.8 119.9 

 III 152.7 116.4 76.3 181.8 125.2 119.1 

 IV 152.9 116.1 75.9 185.3 126.0 121.2 

 ANNUAL 152.0 116.0 76.3 182.6 126.1 120.1 

2008 I r155.0 r115.7 74.6 r188.0 r126.5 r121.3 

 II r155.1 r115.3 r74.4 r189.6 r126.0 r122.2 

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

 Percent change from previous quarter at annual rate(5) 

2006 I 1.0 3.6 2.6 15.5 13.4 14.4 

 II 1.1 -0.9 -1.9 -3.1 -6.5 -4.1 

 III 1.5 2.2 0.6 2.6 -1.4 1.1 

 IV 3.5 -1.1 -4.4 6.1 7.7 2.5 

 ANNUAL 0.2 0.3 0.1 4.5 1.1 4.3 

2007 I 2.5 2.0 -0.5 3.3 -0.3 0.8 

 II 0.4 1.3 0.9 -1.0 -5.3 -1.4 

 III 3.5 1.6 -1.9 0.7 -2.0 -2.7 

 IV 0.6 -1.1 -1.7 7.9 2.8 7.3 

 ANNUAL 2.1 0.9 -1.2 2.5 -0.3 0.4 

2008 I r5.7 r-1.3 -6.7 r6.0 r1.7 r0.3 

 II r0.2 -1.3 r-1.6 r3.3 r-1.6 r3.1 

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

 Percent change from corresponding quarter of previous year 

2006 I 0.2 -0.1 -0.3 6.2 2.4 6.0 

 II -0.7 -0.6 0.1 3.5 -0.4 4.2 

 III -0.4 1.0 1.4 3.1 -0.2 3.6 

 IV 1.8 0.9 -0.8 5.1 3.0 3.2 

 ANNUAL 0.2 0.3 0.1 4.5 1.1 4.3 

2007 I 2.1 0.5 -1.6 2.2 -0.2 0.0 

 II 2.0 1.1 -0.9 2.7 0.1 0.7 

 III 2.5 0.9 -1.5 2.3 -0.1 -0.2 

 IV 1.7 0.9 -0.8 2.7 -1.2 1.0 

 ANNUAL 2.1 0.9 -1.2 2.5 -0.3 0.4 

2008 I r2.5 0.1 -2.4 r3.4 r-0.8 r0.8 

 II r2.5 r-0.6 r-3.0 r4.5 r0.2 r1.9 

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

See footnotes following Table 6. September 4, 2008 

r=revised Source: Bureau of Labor Statistics 
14 

Table 6. Nonfinancial corporate sector: 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 

2006 I 146.3 176.2 120.4 164.5 118.1 112.4 112.9 112.5 182.5 118.8 

 II 146.0 176.5 120.9 164.5 117.0 112.6 114.4 113.1 183.1 119.4 

 III 147.0 178.5 121.5 165.1 116.3 112.3 114.2 112.8 193.0 120.0 

 IV 146.0 177.8 121.8 167.8 118.7 114.9 116.2 115.3 173.9 120.5 

 ANNUAL 146.3 177.3 121.1 165.5 117.5 113.1 114.4 113.4 183.1 119.7 

2007 I 146.2 177.8 121.7 170.3 119.4 116.5 117.2 116.7 171.8 121.6 

 II 147.4 179.7 121.9 171.3 118.7 116.2 117.4 116.5 172.5 121.5 

 III 148.1 180.9 122.1 172.5 118.7 116.5 117.8 116.8 166.8 121.3 

 IV 148.8 181.7 122.1 175.0 119.0 117.6 118.9 117.9 155.9 121.3 

 ANNUAL 147.6 180.0 122.0 172.3 119.0 116.7 117.9 117.0 166.7 121.4 

2008 I r148.7 r181.1 121.8 r176.2 r118.6 r118.5 r119.0 r118.6 r150.3 121.5 

 II 150.8 182.8 121.3 177.9 118.2 118.0 119.7 118.4 140.0 120.4 

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

 Percent change from previous quarter at annual rate(5) 

2006 I 4.4 7.0 2.4 8.3 6.3 3.7 -0.6 2.5 12.1 3.7 

 II -0.9 0.8 1.7 0.0 -3.5 0.9 5.3 2.1 1.4 2.0 

 III 2.7 4.7 1.9 1.5 -2.5 -1.2 -0.5 -1.0 23.3 2.1 

 IV -2.6 -1.6 1.0 6.9 8.5 9.7 6.9 9.0 -34.1 1.7 

 ANNUAL 2.1 4.4 2.2 3.6 0.3 1.5 1.4 1.4 12.2 2.8 

2007 I 0.4 0.0 -0.3 6.1 2.4 5.7 3.6 5.1 -4.7 3.8 

 II 3.4 4.3 0.8 2.2 -2.3 -1.2 0.8 -0.7 1.7 -0.4 

 III 1.8 2.6 0.7 2.8 0.1 1.0 1.3 1.0 -12.5 -0.8 

 IV 1.9 1.9 0.0 5.9 0.9 3.9 3.9 3.9 -23.7 0.2 

 ANNUAL 0.9 1.6 0.7 4.1 1.3 3.2 3.0 3.2 -9.0 1.5 

2008 I r-0.2 r-1.4 -1.1 r2.9 r-1.3 r3.2 r0.3 r2.4 r-13.6 0.5 

 II 5.6 3.8 -1.7 3.7 -1.2 -1.8 2.4 -0.7 -24.7 -3.6 

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

 Percent change from corresponding quarter of previous year 

2006 I 3.2 5.9 2.6 4.1 0.4 0.9 1.4 1.0 17.1 3.0 

 II 1.6 3.9 2.3 3.7 -0.2 2.0 2.7 2.2 9.8 3.2 

 III 2.9 5.2 2.2 2.6 -0.7 -0.3 -1.3 -0.6 26.8 2.6 

 IV 0.9 2.7 1.8 4.1 2.1 3.2 2.7 3.1 -2.0 2.4 

 ANNUAL 2.1 4.4 2.2 3.6 0.3 1.5 1.4 1.4 12.2 2.8 

2007 I -0.1 1.0 1.1 3.6 1.1 3.7 3.8 3.7 -5.9 2.4 

 II 1.0 1.8 0.8 4.1 1.4 3.1 2.7 3.0 -5.8 1.8 

 III 0.7 1.3 0.6 4.5 2.1 3.7 3.1 3.6 -13.6 1.1 

 IV 1.9 2.2 0.3 4.3 0.3 2.3 2.4 2.3 -10.3 0.7 

 ANNUAL 0.9 1.6 0.7 4.1 1.3 3.2 3.0 3.2 -9.0 1.5 

2008 I r1.7 r1.8 0.1 r3.5 r-0.7 r1.7 r1.6 1.7 r-12.5 -0.1 

 II 2.3 1.7 -0.5 3.8 -0.4 1.5 2.0 1.7 -18.8 -0.9 

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

See footnotes following Table 6. September 4, 2008 

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 –1.5 and +1.3 index points approximately 95 percent of the time. This interval is 

based on the performance of this measure between the fourth quarter of 1995 and the first quarter of 2008. 

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 self-employed, 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 1978-2007 is based on the Consumer Price Index research series (CPI-U-RS). 

(3) Unit nonlabor payments include profits, consumption of fixed capital, taxes on production and imports 

less subsidies, net interest and miscellaneous payments, business current transfer payments, rental 

income of persons, and the current surplus of government enterprises. 

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

(5) Quarterly changes: Percent change compounded at annual rate is calculated using index numbers to 

three decimal places. Indexes published in the news release are rounded to one decimal place for 

convenience. Annual changes: Percent change is calculated using annual average indexes to three 

decimal places. 

(6) Unit nonlabor costs include consumption of fixed capital, taxes on production and imports less subsidies, 

net interest and miscellaneous payments, and business current transfer payments. 

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

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

adjustments.