Internet address:      http://stats.bls.gov     USDL 96-466
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 Current data:          (202) 606-7828           UNTIL 10:00 A.M. EST
 Media contact:         (202) 606-5902           THURSDAY, NOVEMBER 7, 1996.


                            PRODUCTIVITY AND COSTS
                              Third Quarter 1996


    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 1996.  The preliminary seasonally-adjusted
 annual rates of productivity growth in the third quarter were:

                0.3 percent in the business sector, and
                0.2 percent in the nonfarm business sector.

 In both the business and the nonfarm business sectors, productivity increases
 in the third quarter were smaller than those recorded in the second quarter
 (as revised).

    In manufacturing, productivity increases in the third quarter were:

                6.3 percent in manufacturing,
                8.2 percent in durable goods manufacturing, and
                3.7 percent in nondurable goods manufacturing.

    The 6.3 percent rise in manufacturing productivity was the largest
 recorded since the first quarter of 1994.  Output and hours in manufacturing,
 which includes about 18 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 independent
 indexes of industrial production prepared by the Board of Governors of the
 Federal Reserve System.  See Technical Notes for further information on data
 sources.


 ------------------------------------------------------------------------
 Table A. Productivity and costs: Preliminary third-quarter 1996 measures
 (Seasonally adjusted annual rates)
 ------------------------------------------------------------------------
                                                        Real       
                                              Hourly    hourly     Unit
                   Produc-                    compen-   compen-    labor
 Sector            tivity    Output   Hours   sation    sation     costs
 ------------------------------------------------------------------------                   
                       Percent change from preceding quarter
 Business           0.3       2.4      2.0     4.3       2.0        4.0
 Nonfarm business   0.2       2.3      2.1     3.9       1.6        3.7
 Manufacturing      6.3       5.4     -0.8     4.6       2.2       -1.6
   Durable          8.2       7.5     -0.7     4.6       2.2       -3.3
   Nondurable       3.7       2.7     -1.0     4.7       2.3        0.9
 ------------------------------------------------------------------------
                       Percent change from same quarter a year ago
 Business           0.7       2.7      2.0     4.0       1.0        3.3
 Nonfarm business   0.3       2.5      2.2     3.8       0.8        3.4
 Manufacturing      4.6       4.1     -0.5     3.7       0.8       -0.8
   Durable          6.0       6.8      0.7     3.1       0.2       -2.7
   Nondurable       2.9       0.5     -2.3     4.4       1.4        1.4
 ------------------------------------------------------------------------


 Business
 --------

    From the second quarter to the third quarter of 1996, business sector
 productivity increased at a 0.3 percent annual rate.  Output rose 2.4
 percent, and hours of all persons engaged in the sector increased 2.0 percent
 (seasonally adjusted annual rates).  After revisions, second-quarter
 productivity in the business sector rose 1.1 percent, as output increased 5.0
 percent, and hours of all persons rose 3.9 percent (tables B and 1).
 
    Hourly compensation increased 4.3 percent during the third quarter of
 1996, similar to the 4.1 percent rise in the second quarter.  This measure
 includes wages and salaries, supplements, employer contributions to employee
 benefit plans, and taxes.  Unit labor costs, which reflect changes in both
 hourly compensation and productivity, increased at a 4.0 percent annual rate
 during the third quarter.  During the previous quarter, these costs had risen
 3.0 percent.
 
    Real hourly compensation, which takes into account changes in the
 Consumer Price Index for All Urban Consumers (CPI-U), increased 2.0 percent
 in the third quarter and 0.3 percent in the second quarter of 1996.  The
 third-quarter increase in real hourly compensation was the largest since a
 5.2 percent increase was recorded in the first quarter of 1992.
 
    The implicit price deflator for the business sector, which reflects
 changes in unit labor costs and unit nonlabor payments, increased at a 1.2
 percent annual rate in the third quarter, down from a 2.4 percent increase
 during the second quarter of 1996.
 
 Nonfarm business
 ----------------
 
    Productivity rose 0.2 percent in the nonfarm business sector during the
 third quarter of 1996, slightly less than the 0.5 percent increase recorded
 in the second quarter of the year.  Output grew at a 2.3 percent annual rate
 in the third quarter, down from the 4.8 percent increase posted in the second
 quarter.  Hours of all persons in the nonfarm business sector rose 2.1
 percent in the third quarter of 1996 and 4.3 percent in the previous quarter
 (table 2).
 
    Hourly compensation increased at a 3.9 percent annual rate in the third
 quarter, nearly the same as the 3.8 percent increase one quarter earlier.
 When the rise in the CPI-U is taken into account, real hourly compensation
 rose at a 1.6 percent annual rate during the July-September period.  In the
 previous quarter, growth in real hourly compensation had been unchanged.
 Unit labor costs increased 3.7 percent during the third quarter of 1996,
 somewhat more rapidly than the 3.3 percent annual rate recorded during the
 second quarter of 1996.
 
    The implicit price deflator for nonfarm business output rose 1.1 percent
 in the third quarter, compared with a 2.1 percent increase one quarter
 earlier.
 
 Manufacturing
 -------------
 
    Productivity increased 6.3 percent in manufacturing in the third quarter
 of 1996, as output rose 5.4 percent and hours of all persons fell 0.8 percent
 (seasonally adjusted annual rates).  This increase in manufacturing
 productivity was the largest since a 6.7 percent increase was recorded in the
 first quarter of 1994.  In the durable goods sector, third-quarter
 productivity rose 8.2 percent as output increased 7.5 percent and hours fell
 0.7 percent.  Productivity increased 3.7 percent in the nondurable goods
 sector as output increased 2.7 percent and hours of all persons fell 1.0
 percent.  In the second quarter of 1996, manufacturing productivity posted a
 revised 2.9 percent increase as output rose 7.1 percent and hours rose 4.1
 percent (tables 3, 4, and 5).
 
    Hourly compensation of manufacturing workers increased an average 4.6
 percent during the third quarter, down from the 5.8 percent increase recorded
 in the second quarter (seasonally adjusted annual rates).  The growth in
 hourly compensation was nearly the same in the durable (4.6 percent) and
 nondurable (4.7 percent) sectors.  Real hourly compensation in total
 manufacturing rose 2.2 percent in the third quarter when the increase in the
 CPI-U is taken into account.  In the second quarter of 1996, real hourly
 compensation of manufacturing workers had risen 1.9 percent.
 
    Unit labor costs fell at a 1.6 percent annual rate in the third quarter
 of 1996.  These costs had increased 2.8 percent during the second quarter of
 1996.  The third-quarter movements in the two subsectors of manufacturing
 were quite different, reflecting the similar increases in hourly compensation
 and different productivity movements.  Unit labor costs for durable goods
 manufacturers fell 3.3 percent in the third quarter while those for
 nondurable goods manufacturers rose 0.9 percent.


 ---------------------------------------------------------------------
 Table B. Previous and revised productivity and related measures
 Quarterly percent change at seasonally adjusted annual rate
 ---------------------------------------------------------------------                                                               
                                                       Real      
                                             Hourly    hourly    Unit
                    Produc-                  compen-   compen-   labor
 Sector             tivity   Output   Hours  sation    sation    costs
 ---------------------------------------------------------------------                                                               
                              Second quarter 1996
 Business:                                                      
   Previous          1.1      5.2      4.0    4.0      0.2       2.9
   Current           1.1      5.0      3.9    4.1      0.3       3.0
 Nonfarm business:                                               
   Previous          0.5      4.9      4.4    3.7     -0.1       3.2
   Current           0.5      4.8      4.3    3.8      0.0       3.3
 Manufacturing:                                                 
   Previous          2.2      6.4      4.1    5.8      1.9       3.6
   Current           2.9      7.1      4.1    5.8      1.9       2.8
 ---------------------------------------------------------------------


 Revised Measures
 ----------------
 
    Current and previous measures for the second quarter of 1996 for the
 business, nonfarm business, and manufacturing sectors are compared in
 table B. For the business and nonfarm business sectors, the quarterly movements
 in output per hour and hourly compensation are similar to those reported on
 September 10 based on information then available.  Productivity and output
 movements in the manufacturing sector were revised upward and unit labor
 costs revised downward, based on newer information from the Federal Reserve
 Board's Indexes of Industrial Production.
    In all sectors, hours of all persons in the first and second quarters
 were revised due to a correction of the seasonal adjustment factors used with
 the establishment-based employment data.  See USDL 96-414.


 -----------------------------------------------------------------------------
 Table C.  Nonfinancial corporations: Previous and revised productivity and
 cost measures
 Quarterly percent changes at seasonally adjusted annual rates
 -----------------------------------------------------------------------------                                                                     
                                              Real                    
                                     Hourly   hourly  Unit            Implicit
             Produc-                 compen-  compen- labor  Unit     price
             tivity   Output  Hours  sation   sation  costs  profits  deflator
 -----------------------------------------------------------------------------                                                                     
                             Second quarter 1996
 Previous     1.7      6.1     4.4    3.6      -0.2    1.9    6.9      1.6
 Current      1.3      5.6     4.2    3.7      -0.1    2.4    7.5      1.5
 -----------------------------------------------------------------------------


 Revised measures: Nonfinancial Corporations
 -------------------------------------------
 
    Productivity and cost measures for the second quarter for nonfinancial
 corporations also were revised to incorporate more recent information than
 was available on September 10.  Productivity and output were revised
 downward, while unit labor costs and unit profits were revised upward
 (tables C and 6).
   
   
                               Next release date
                               -----------------
   
    The next release of  Productivity and Costs is scheduled for 10:00 AM
 EST, Thursday, December 5, 1996.  Third-quarter measures for nonfinancial
 corporations and revised third-quarter measures for business, nonfarm
 business, and manufacturing will be released at that time.
                                TECHNICAL NOTES
                                      
                                      
                                      
 Labor  Hours:  The primary source of hours and employment  data  is  the  BLS
 Current  Employment Statistics (CES) program, which provides  monthly  survey
 data on total employment and average weekly paid hours of production and non-
 supervisory  workers  in  nonagricultural establishments.  Jobs  rather  than
 persons  are counted. 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 Com-
 merce and the CPS are used to measure labor input for government enterprises,
 proprietors, and unpaid family workers.
 
 Output: Business sector output is an annual-weighted 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 76 percent  of
 the  value  of  GDP  in 1992. Nonfarm business, which also excludes  farming,
 accounted for about 75 percent of GDP in 1992.
      Annual manufacturing indexes 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;  non-
 electrical  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 annual-weighted index constructed by
 excluding  from  GDP  the  following outputs: General  government;  nonprofit
 institutions; employees of private households; the rental value  of owner-oc-
 cupied  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 52 percent of the value of GDP in 1992.
 
 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: 202-606-STAT; TDD phone: 202-606-5897;
 TDD message referral phone number: 1-800-326-2577.
 
 
  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

  1994       I     100.4      104.9     104.5     104.0        99.4      103.6       104.5      103.9
            II     100.5      106.7     106.1     104.2        99.0      103.6       105.7      104.4
           III     101.1      107.7     106.6     104.7        98.6      103.6       107.6      105.1
            IV     101.2      108.7     107.4     105.6        98.9      104.4       107.8      105.6

        ANNUAL     100.7      107.0     106.2     104.5        99.0      103.8       106.5      104.7

  1995       I     100.7      108.8     108.1     106.6        99.1      105.8       107.4      106.4
            II     101.2      109.0     107.7     107.8        99.4      106.5       107.7      106.9
           III     101.6      110.3     108.5     108.8        99.8      107.1       108.2      107.5
            IV     101.5      110.4     108.8     110.0       100.3      108.4       106.6      107.8

        ANNUAL     101.2      109.6     108.3     108.2        99.7      107.0       107.5      107.1

  1996       I     102.0      111.2     109.1     110.8       100.2      108.7       107.3      108.2
            II    r102.2     r112.6    r110.1    r112.0       100.3      109.5      r107.6      108.8
           III     102.3      113.3     110.7     113.1       100.8      110.6       106.6      109.1
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1994       I      -1.9        1.7       3.6       2.6         0.6        4.6        -1.3        2.4
            II       0.6        6.9       6.3       0.8        -1.8        0.2         4.6        1.8
           III       2.2        4.1       1.9       2.3        -1.4        0.2         7.3        2.7
            IV       0.6        3.8       3.2       3.4         1.2        2.8         0.7        2.0

        ANNUAL       0.5        4.2       3.7       1.9        -0.6        1.4         3.5        2.2

  1995       I      -1.9        0.3       2.3       3.6         0.7        5.6        -1.5        3.0
            II       1.9        0.7      -1.1       4.6         1.2        2.7         1.2        2.2
           III       1.7        4.8       3.0       3.9         1.8        2.2         1.8        2.0
            IV      -0.6        0.5       1.1       4.4         1.9        5.0        -5.6        1.0

        ANNUAL       0.5        2.5       2.0       3.6         0.7        3.1         1.0        2.3

  1996       I       2.0        3.0       1.0       3.0        -0.2        1.0         2.4        1.5
            II       1.1       r5.0      r3.9      r4.1        r0.3       r3.0        r1.2        2.4
           III       0.3        2.4       2.0       4.3         2.0        4.0        -3.7        1.2
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1994       I       0.2        3.4       3.2       2.2        -0.2        2.0         2.4        2.2
            II       0.8        4.5       3.7       1.8        -0.6        1.0         3.7        2.0
           III       1.1        4.8       3.6       1.9        -1.0        0.8         5.1        2.3
            IV       0.3        4.1       3.7       2.3        -0.4        1.9         2.8        2.2

        ANNUAL       0.5        4.2       3.7       1.9        -0.6        1.4         3.5        2.2

  1995       I       0.3        3.8       3.4       2.5        -0.3        2.2         2.7        2.4
            II       0.7        2.2       1.5       3.5         0.4        2.8         1.9        2.5
           III       0.6        2.4       1.8       3.9         1.2        3.3         0.5        2.3
            IV       0.3        1.6       1.3       4.1         1.4        3.9        -1.1        2.0

        ANNUAL       0.5        2.5       2.0       3.6         0.7        3.1         1.0        2.3

  1996       I       1.2        2.2       1.0       4.0         1.2        2.7        -0.1        1.7
            II      r1.0        3.3      r2.2      r3.9        r1.0        2.8       r-0.1        1.7
           III       0.7        2.7       2.0       4.0         1.0        3.3        -1.5        1.5
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 7, 1996
  r=revised                                                              Source: Bureau of Labor Statistics

  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

  1994       I     100.2      104.9     104.6     103.7        99.1      103.4       104.9      103.9
            II     100.5      106.7     106.1     104.0        98.8      103.5       106.3      104.5
           III     101.0      107.8     106.7     104.6        98.4      103.5       108.4      105.3
            IV     101.2      108.8     107.5     105.5        98.8      104.3       108.4      105.7

        ANNUAL     100.7      107.0     106.3     104.3        98.8      103.7       107.0      104.9

  1995       I     100.8      109.0     108.1     106.5        99.0      105.6       108.1      106.5
            II     101.3      109.2     107.8     107.7        99.3      106.3       108.4      107.1
           III     101.8      110.6     108.6     108.8        99.8      106.8       108.8      107.5
            IV     101.5      110.7     109.0     109.9       100.2      108.2       107.0      107.8

        ANNUAL     101.3      109.9     108.4     108.2        99.6      106.7       108.1      107.2

  1996       I     102.0      111.4     109.3     110.7       100.2      108.6       107.3      108.1
            II     102.1      112.8     110.4    r111.8      r100.2     r109.5      r107.2      108.7
           III     102.2      113.4     111.0     112.9       100.5      110.5       106.3      109.0
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1994       I      -2.0        0.8       2.9       2.8         0.7        4.8        -1.6        2.5
            II       1.0        7.0       5.9       1.4        -1.2        0.3         5.6        2.2
           III       2.0        4.2       2.1       2.1        -1.6        0.1         8.1        2.9
            IV       0.9        4.0       3.1       3.9         1.6        2.9         0.0        1.9

        ANNUAL       0.5        4.0       3.5       2.1        -0.5        1.5         3.5        2.3

  1995       I      -1.6        0.6       2.2       3.7         0.8        5.4        -1.0        3.0
            II       2.0        0.9      -1.0       4.6         1.1        2.6         1.0        2.0
           III       2.0        5.0       2.9       4.0         1.9        1.9         1.3        1.7
            IV      -1.1        0.3       1.5       4.1         1.6        5.2        -6.4        0.9

        ANNUAL       0.7        2.7       2.0       3.7         0.8        3.0         1.0        2.2

  1996       I      r1.7        2.7       1.0       3.3         0.0        1.5         1.1        1.4
            II       0.5       r4.8      r4.3      r3.8        r0.0       r3.3       r-0.1        2.1
           III       0.2        2.3       2.1       3.9         1.6        3.7        -3.5        1.1
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1994       I       0.1        3.3       3.2       2.1        -0.4        2.0         2.1        2.1
            II       0.8        4.3       3.5       1.9        -0.5        1.1         3.9        2.1
           III       0.9        4.3       3.4       2.0        -0.8        1.1         5.1        2.5
            IV       0.5        4.0       3.5       2.5        -0.1        2.0         3.0        2.4

        ANNUAL       0.5        4.0       3.5       2.1        -0.5        1.5         3.5        2.3

  1995       I       0.6        3.9       3.3       2.7        -0.1        2.2         3.1        2.5
            II       0.8        2.4       1.6       3.5         0.5        2.7         2.0        2.5
           III       0.8        2.6       1.8       4.0         1.4        3.2         0.3        2.1
            IV       0.3        1.7       1.4       4.1         1.4        3.8        -1.3        1.9

        ANNUAL       0.7        2.7       2.0       3.7         0.8        3.0         1.0        2.2

  1996       I      r1.1        2.2       1.1       4.0         1.2        2.8        -0.8        1.5
            II       0.8        3.2       2.4       3.8         0.9       r3.0       r-1.1        1.5
           III       0.3        2.5       2.2       3.8         0.8        3.4        -2.3        1.4
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 7, 1996
  r=revised                                                              Source: Bureau of Labor Statistics

  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

  1994       I            104.8        107.3        102.4        104.4           99.9          99.7
            II            106.2        109.5        103.2        104.7           99.5          98.6
           III            106.6        110.9        104.0        105.5           99.4          99.0
            IV            107.7        113.0        105.0        106.4           99.6          98.8

        ANNUAL            106.1        110.2        103.8        105.1           99.5          99.0

  1995       I            108.3        114.1        105.3        107.2           99.7          99.0
            II            109.0        113.5        104.1        108.3           99.9          99.4
           III            110.4        114.2        103.4        109.7          100.6          99.3
            IV            111.5        114.6        102.8        110.8          101.0          99.4

        ANNUAL            109.8        114.1        103.9        109.0          100.3          99.3

  1996       I            113.0        115.3       r102.0        110.9          100.3          98.2
            II           r113.8       r117.3        103.1        112.5          100.8         r98.9
           III            115.5        118.8        102.9        113.8          101.4          98.5
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1994       I              6.7          8.8          2.0          3.3            1.3          -3.1
            II              5.5          8.5          2.9          1.1           -1.4          -4.1
           III              1.7          5.1          3.4          3.1           -0.6           1.5
            IV              4.1          7.9          3.6          3.1            0.9          -0.9

        ANNUAL              4.0          6.5          2.4          2.7            0.1          -1.2

  1995       I              2.4          3.9          1.4          3.2            0.4           0.8
            II              2.7         -2.1         -4.7          4.3            0.8           1.5
           III              5.3          2.6         -2.5          5.1            3.0          -0.2
            IV              3.7          1.4         -2.2          4.1            1.7           0.4

        ANNUAL              3.4          3.5          0.1          3.7            0.8           0.2

  1996       I              5.6          2.4        r-3.1          0.4           -2.8          -4.9
            II             r2.9         r7.1          4.1          5.8            1.9          r2.8
           III              6.3          5.4         -0.8          4.6            2.2          -1.6
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1994       I              3.1          4.7          1.5          3.1            0.6           0.0
            II              4.5          6.5          1.9          2.8            0.4          -1.7
           III              4.5          7.1          2.4          2.9            0.0          -1.6
            IV              4.5          7.6          3.0          2.7            0.0          -1.7

        ANNUAL              4.0          6.5          2.4          2.7            0.1          -1.2

  1995       I              3.4          6.3          2.8          2.7           -0.2          -0.7
            II              2.7          3.6          0.9          3.5            0.4           0.7
           III              3.6          3.0         -0.6          3.9            1.3           0.3
            IV              3.5          1.4         -2.0          4.2            1.5           0.7

        ANNUAL              3.4          3.5          0.1          3.7            0.8           0.2

  1996       I              4.3          1.0         -3.1         r3.5            0.7          -0.8
            II             r4.4         r3.4        r-1.0          3.8            0.9         r-0.5
           III              4.6          4.1         -0.5          3.7            0.8          -0.8
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 7, 1996
  r=revised                                                       Source: Bureau of Labor Statistics

 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

  1994       I            107.0        110.4        103.2        104.3           99.7          97.5
            II            108.2        112.6        104.1        104.5           99.3          96.6
           III            109.0        114.8        105.3        105.3           99.1          96.6
            IV            110.3        117.5        106.6        106.0           99.3          96.1

        ANNUAL            108.4        113.8        105.0        104.8           99.2          96.7

  1995       I            111.5        119.5        107.2        106.8           99.2          95.7
            II            111.8        119.0        106.4        107.7           99.3          96.3
           III            113.6        120.4        106.0        109.1          100.1          96.1
            IV            114.8        121.5        105.9        110.1          100.4          95.9

        ANNUAL            112.9        120.1        106.4        108.4           99.8          96.0

  1996       I            116.9        123.1        105.3        109.5           99.0          93.6
            II            118.0        126.3        107.0        111.3           99.7          94.3
           III            120.4        128.6        106.8        112.5          100.3          93.5
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1994       I              7.4         11.0          3.3          3.1            1.0          -4.1
            II              4.8          8.6          3.6          1.0           -1.5          -3.7
           III              3.0          7.8          4.7          2.9           -0.8          -0.1
            IV              4.7          9.9          5.0          2.8            0.6          -1.8

        ANNUAL              4.9          8.5          3.5          2.5            0.0          -2.2

  1995       I              4.4          7.0          2.4          2.7           -0.1          -1.6
            II              1.2         -1.9         -3.1          3.6            0.2           2.4
           III              6.4          5.1         -1.2          5.3            3.2          -1.0
            IV              4.3          3.6         -0.7          3.6            1.2          -0.7

        ANNUAL              4.1          5.5          1.3          3.4            0.5          -0.7

  1996       I              7.8          5.5         -2.1         -2.2           -5.3          -9.3
            II             r3.7        r10.7         r6.7          6.8           r2.9          r3.0
           III              8.2          7.5         -0.7          4.6            2.2          -3.3
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1994       I              4.4          6.8          2.3          3.1            0.6          -1.2
            II              5.3          8.4          2.9          2.8            0.4          -2.4
           III              5.8          9.5          3.5          2.9            0.0          -2.8
            IV              5.0          9.3          4.1          2.4           -0.2          -2.4

        ANNUAL              4.9          8.5          3.5          2.5            0.0          -2.2

  1995       I              4.2          8.3          3.9          2.4           -0.5          -1.8
            II              3.3          5.6          2.2          3.0            0.0          -0.3
           III              4.2          4.9          0.7          3.6            1.0          -0.5
            IV              4.1          3.4         -0.7          3.8            1.1          -0.2

        ANNUAL              4.1          5.5          1.3          3.4            0.5          -0.7

  1996       I              4.9          3.0         -1.8          2.5           -0.2          -2.2
            II             r5.5          6.2          0.6          3.3            0.4          -2.1
           III              6.0          6.8          0.7          3.1            0.2          -2.7
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 7, 1996
  r=revised                                                       Source: Bureau of Labor Statistics

 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

  1994       I            102.8        104.3        101.4        104.5           99.9         101.7
            II            104.3        106.3        101.9        104.8           99.6         100.4
           III            104.4        106.9        102.4        105.7           99.5         101.2
            IV            105.3        108.3        102.8        106.5           99.7         101.1

        ANNUAL            104.2        106.5        102.2        105.3           99.7         101.1

  1995       I            105.4        108.4        102.8        107.5          100.0         102.0
            II            106.7        107.8        101.0        108.8          100.3         102.0
           III            107.8        107.7         99.9        110.0          100.9         102.1
            IV            108.6        107.3         98.8        111.3          101.5         102.5

        ANNUAL            107.1        107.8        100.6        109.4          100.8         102.1

  1996       I           r109.4        106.9         97.7        112.5          101.8         102.9
            II           r109.9       r107.5         97.8       r113.5         r101.7        r103.3
           III            110.9        108.2         97.6        114.9          102.3         103.6
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1994       I              6.2          6.4          0.1          3.5            1.5          -2.6
            II              6.0          8.1          1.9          1.1           -1.4          -4.7
           III              0.3          2.0          1.7          3.3           -0.5           3.0
            IV              3.5          5.4          1.8          3.4            1.1          -0.2

        ANNUAL              3.1          4.1          1.0          2.6            0.1          -0.5

  1995       I              0.5          0.6          0.1          3.8            0.9           3.3
            II              4.8         -2.5         -7.0          4.9            1.5           0.2
           III              4.1         -0.3         -4.3          4.4            2.3           0.3
            IV              3.0         -1.4         -4.3          4.7            2.3           1.6

        ANNUAL              2.9          1.3         -1.6          3.9            1.1           1.0

  1996       I             r3.0         -1.5        r-4.4          4.6            1.3           1.6
            II             r2.0         r2.4          0.4         r3.6          r-0.2          r1.6
           III              3.7          2.7         -1.0          4.7            2.3           0.9
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1994       I              1.9          2.4          0.5          3.0            0.5           1.1
            II              3.9          4.4          0.5          2.6            0.2          -1.2
           III              3.2          4.3          1.0          2.6           -0.2          -0.6
            IV              4.0          5.4          1.4          2.8            0.2          -1.1

        ANNUAL              3.1          4.1          1.0          2.6            0.1          -0.5

  1995       I              2.5          4.0          1.4          2.9            0.0           0.3
            II              2.2          1.3         -0.9          3.8            0.7           1.6
           III              3.2          0.7         -2.4          4.1            1.4           0.9
            IV              3.1         -0.9         -3.9          4.5            1.7           1.3

        ANNUAL              2.9          1.3         -1.6          3.9            1.1           1.0

  1996       I              3.7         -1.4         -5.0          4.7           r1.9           0.9
            II             r3.0        r-0.2         -3.1         r4.3           r1.4          r1.3
           III              2.9          0.5         -2.3          4.4            1.4           1.4
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 7, 1996
  r=revised                                                       Source: Bureau of Labor Statistics

 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-r   labor    labor    cost     fits   deflator
      quarter   hour      Output  hours      (1)      sation(2)  costs    cost(6)  (7)      (8)      (4)
  ----------------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  1994       I    102.7    107.4     104.6    103.7      99.2     101.0    102.1    101.3    120.5    102.8
            II    102.5    108.9     106.2    103.7      98.6     101.2     98.7    100.5    134.5    103.1
           III    102.4    109.7     107.0    104.1      98.0     101.6     99.3    101.0    136.5    103.7
            IV    102.9    111.5     108.3    104.8      98.1     101.9     98.3    100.9    141.5    104.0

        ANNUAL    102.6    109.3     106.6    104.1      98.5     101.4     99.6    100.9    133.4    103.4

  1995       I    102.2    111.4     109.0    105.6      98.2     103.4    100.0    102.5    130.9    104.7
            II    102.9    112.1     108.9    106.8      98.4     103.8    100.9    103.0    130.1    105.1
           III    104.2    114.0     109.4    107.8      98.9     103.5     99.7    102.5    142.1    105.5
            IV    104.8    115.2     109.9    108.9      99.3     103.9    100.0    102.8    140.4    105.7

        ANNUAL    103.6    113.2     109.3    107.3      98.8     103.6    100.1    102.7    136.0    105.2

  1996       I    105.1    115.8     110.2    109.6      99.1     104.3     99.3    102.9    145.1    106.1
            II   r105.5   r117.4    r111.3    110.6      99.1    r104.9    r98.4   r103.1   r147.8   r106.5
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  1994       I      0.8      5.0       4.2      3.5       1.4       2.6     12.0      5.1    -22.4      2.2
            II     -0.5      5.7       6.2      0.0      -2.5       0.5    -12.8     -3.3     55.2      1.2
           III     -0.3      2.8       3.2      1.4      -2.3       1.7      2.4      1.9      5.9      2.3
            IV      1.7      6.7       5.0      2.9       0.6       1.2     -3.7     -0.1     15.6      1.4

        ANNUAL      1.3      5.6       4.2      1.8      -0.7       0.5     -0.3      0.3     16.2      1.7

  1995       I     -2.7     -0.2       2.5      3.2       0.3       6.0      7.0      6.3    -26.8      2.4
            II      2.8      2.4      -0.3      4.3       0.9       1.5      3.7      2.1     -2.4      1.6
           III      5.2      7.2       1.9      4.1       2.0      -1.1     -4.7     -2.1     42.2      1.6
            IV      2.5      4.3       1.8      4.0       1.6       1.5      1.0      1.4     -4.8      0.7

        ANNUAL      0.9      3.5       2.5      3.1       0.3       2.2      0.6      1.8      1.9      1.8

  1996       I      1.1      2.2      r1.1      2.6      -0.6       1.5     -2.6      0.4     14.3      1.7
            II     r1.3     r5.6      r4.2     r3.7     r-0.1      r2.4    r-3.6     r0.8     r7.5     r1.5
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  1994       I      2.5      6.1       3.5      2.2      -0.3      -0.3      1.5      0.2     17.1      1.5
            II      1.6      5.8       4.2      1.8      -0.6       0.2     -1.3     -0.2     20.6      1.6
           III      1.0      5.2       4.2      1.6      -1.2       0.7     -0.6      0.3     18.1      1.9
            IV      0.4      5.1       4.6      1.9      -0.7       1.5     -0.9      0.9     10.2      1.8

        ANNUAL      1.3      5.6       4.2      1.8      -0.7       0.5     -0.3      0.3     16.2      1.7

  1995       I     -0.5      3.7       4.2      1.9      -1.0       2.4     -2.1      1.1      8.6      1.8
            II      0.3      2.9       2.6      2.9      -0.1       2.6      2.3      2.5     -3.3      1.9
           III      1.7      4.0       2.2      3.6       0.9       1.9      0.5      1.5      4.1      1.8
            IV      1.9      3.4       1.4      3.9       1.2       1.9      1.7      1.9     -0.8      1.6

        ANNUAL      0.9      3.5       2.5      3.1       0.3       2.2      0.6      1.8      1.9      1.8

  1996       I      2.9      4.0       1.1      3.7       0.9       0.8     -0.7      0.4     10.9      1.4
            II     r2.5     r4.8      r2.2      3.6       0.7      r1.1    r-2.5      0.1    r13.6      1.4
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        November 7, 1996
  r=revised                                                               Source: Bureau of Labor Statistics

 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 30
 days after the close of the reference period; revisions appear 30 days later,
 and second revisions after an additional 60 days.



                               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)  Compensation per hour adjusted for changes in the Consumer Price Index for
      All Urban Consumers.
 
 (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 cost includes 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 cost is the sum of unit labor and nonlabor costs.
 
 (8)  Unit profits include corporate profits with inventory valuation and capital
      consumption adjustments.