Internet address: http://www.bls.gov/lpc/ USDL 08-1773 

Historical, technical TRANSMISSION OF THIS 

 information: (202) 691-5606 MATERIAL IS EMBARGOED 

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

Media contact: (202) 691-5902 WEDNESDAY, DECEMBER 3, 2008. 

PRODUCTIVITY AND COSTS 

Third 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 third quarter of 2008. 

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

 1.5 percent in the business sector and 

 1.3 percent in the nonfarm business sector. 

In both sectors, hours were revised down more than output, leading to productivity increases 

which are 0.2 percentage point higher than in preliminary estimates published November 6. 

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

 -2.7 percent in manufacturing, 

 2.9 percent in durable goods manufacturing, and 

 -10.2 percent in nondurable goods manufacturing. 

In the manufacturing sector, productivity fell 1.7 percentage points more than was 

reported on November 6, as a 2.0 percent downward revision to output was partially offset by a 

0.4 percent downward revision to hours. 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. 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 8). 
2 

Table A. Productivity and costs: Revised third-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 1.5 -1.7 -3.2 4.2 -2.4 2.6 

Nonfarm business 1.3 -1.9 -3.1 4.1 -2.4 2.8 

Manufacturing -2.7 -7.8 -5.3 4.7 -1.9 7.6 

 Durable 2.9 -5.8 -8.4 6.1 -0.6 3.1 

 Nondurable -10.2 -9.8 0.4 2.6 -3.8 14.3 

 Percent change from same quarter a year ago 

Business 1.9 0.2 -1.6 3.3 -1.8 1.4 

Nonfarm business 2.1 0.3 -1.8 3.5 -1.6 1.4 

Manufacturing 0.6 -3.2 -3.8 4.6 -0.6 4.0 

 Durable 1.8 -2.9 -4.6 5.0 -0.3 3.2 

 Nondurable -1.2 -3.6 -2.4 4.0 -1.2 5.3 

Business 

Business sector productivity grew at a 1.5 percent annual rate during the third quarter of 

2008, less than the 1.9 percent rate of growth from the third quarter of 2007 to the third quarter 

of 2008 and the 2.5 percent average annual rate from 2000 to 2007. Productivity growth in the 

third quarter was the result of hours worked falling faster than output. The hours decline of 3.2 

percent was the largest since the fourth quarter of 2001 (4.2 percent), and the output decline of 

1.7 percent was the largest since the third quarter of 2001 (3.1 percent). 

Hourly compensation in the business sector increased 4.2 percent during the third quarter 

of 2008, following a 1.2 percent increase in the second quarter (seasonally adjusted annual rates). 

This series includes accrued wages and salaries, supplements, employer contributions to 

employee benefit plans, and taxes. Real hourly compensation fell 2.4 percent, the fourth 

consecutive quarter in which it declined. This reflected the 6.7 percent increase in consumer 

prices during the third quarter, the fastest growth since a similar increase in the third quarter of 

1990. 

The revised 2.6 percent third quarter increase in unit labor costs reverses the 2.4 percent 

decline in the second quarter. Unit labor costs increased 1.4 percent over the past four quarters. 

The change in unit labor costs approximates the change in hourly compensation less the change 

in productivity. The implicit price deflator for the business sector, which reflects changes in 

both unit labor costs and unit nonlabor payments, grew 4.5 percent in the third quarter of 2008. 

This was its fastest growth since the first quarter of 1990 (4.6 percent). 

 
3 

Nonfarm business 

 Productivity in the nonfarm business sector rose at a 1.3 percent annual rate in the third 

quarter of 2008, slower than the 2.1 percent rate over the last four quarters, and slower than the 

trend rate of 2.5 percent per year from 2000 to 2007 (chart 1). As revised, output fell 1.9 percent 

and hours fell 3.1 percent in the third quarter of 2008; the two measures had not declined as 

quickly since the third quarter of 2001 and the first quarter of 2002, respectively. 

 Hourly compensation in the nonfarm business sector rose 4.1 percent in the third quarter 

of 2008. This rate is similar to trends in recent years; hourly compensation grew between 3.6 

percent and 4.1 percent each year since 2001. As in the business sector, real hourly 

compensation decreased 2.4 percent in nonfarm business during the third quarter, due to the 

increase in consumer prices. 

Nonfarm business unit labor costs increased 2.8 percent in the third quarter of 2008. 

Over the last four quarters unit labor costs increased 1.4 percent (chart 2). The implicit price 

deflator for the nonfarm business sector rose 4.9 percent in the third quarter, more than in any 

quarter since the third quarter of 1982 (5.0 percent). 

-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, 2001:1-2008:3

 

-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, 2001:1-2008:3

Manufacturing 

Manufacturing output per hour fell 2.7 percent in the third quarter of 2008, as output fell 

7.8 percent and hours fell 5.3 percent. This is the largest quarterly decline in productivity in the 

entire series, going back to the second quarter of 1987. The decline in output was the largest 

since the first quarter of 1991, when output fell 8.0 percent. Third quarter 2008 saw the second 

consecutive quarter of negative manufacturing productivity growth; revised output per hour for 

the second quarter of 2008 fell 2.2 percent (chart 3 and table 3). 

The third-quarter decline in manufacturing productivity was driven by a 10.2 percent 

decline in nondurable goods productivity; output per hour in durable goods industries increased 

2.9 percent. The quarterly drop in nondurable goods productivity is the largest in the series. 

Nondurable goods output fell by 9.8 percent, 2.8 percentage points more than reported on 

November 6. In contrast to the large decline in output, hours in nondurable manufacturing rose 

slightly during the quarter, 0.4 percent (table 5). 

 
4 

In durable goods industries, a 5.8 percent decline in output was outpaced by an 8.4 

percent drop in hours, yielding a productivity increase of 2.9 percent (table 4). The declines in 

output and hours in durable manufacturing had not been as large since the fourth quarter of 2001, 

when output fell 9.9 percent and hours dropped 14.5 percent. Complete historical series can be 

found on the productivity and costs homepage: http://www.bls.gov/lpc/#data. 

 The average hourly compensation of all manufacturing workers rose 4.7 percent in the 

third quarter of 2008, and increased more in the durable goods sector, 6.1 percent, than in the 

nondurable goods sector, 2.6 percent. Real hourly compensation for all manufacturing workers 

declined 1.9 percent in the third quarter, following declines of 0.5 percent and 2.7 percent in the 

first and second quarters of 2008. 

Both the decrease in productivity and the increase in hourly compensation contributed to 

a 7.6 percent increase in unit labor costs in manufacturing during the third quarter—much higher 

than the 4.0 percent increase over the last four quarters and the 0.3 percent rate from 2000 to 

2007 (chart 4). Unit labor costs increased 3.1 percent in durable goods industries and 14.3 

percent in nondurable goods industries during the third quarter. 

-16.0

-12.0

-8.0

-4.0

0.0

4.0

8.0

12.0

16.0

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, 2001:1-2008:3

-16.0

-12.0

-8.0

-4.0

0.0

4.0

8.0

12.0

16.0

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, 2001:1-2008:3

Nonfinancial Corporations 

Third-quarter 2008 measures of productivity and costs also were released for 

nonfinancial corporations (tables B and 6). Output per all-employee hour grew at a 4.9 percent 

annual rate, with output rising 1.8 percent and hours of all employees falling 3.0 percent 

(seasonally adjusted annual rates). Over the last four quarters nonfinancial corporate sector 

productivity increased 3.5 percent. This sector includes all corporations doing business in the 

United States, except those classified as depository institutions, nondepository institutions, 

security and commodity brokers, insurance carriers, regulated investment offices, small business 

investment offices, and real estate investment trusts. 

 
5 

Table B. Nonfinancial corporations: Third-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 III 4.9 1.8 -3.0 5.0 -1.6 0.1 24.6 4.0 

Percent change from same quarter a year ago 

2008 III 3.5 2.0 -1.4 4.0 -1.2 0.5 -6.7 0.2 

Hourly compensation increased 5.0 percent during the third quarter, but when consumer 

prices are taken into account, real hourly compensation declined 1.6 percent. Real hourly 

compensation declined 1.2 percent since the third quarter of 2007. 

Unit labor costs in the nonfinancial corporate sector remained steady, increasing just 0.1 

percent during the third quarter of 2008; unit nonlabor costs increased 5.8 percent, and unit 

profits rose 24.6 percent (seasonally adjusted annual rates). As a result of these movements, the 

implicit price deflator for the output of nonfinancial corporations—which reflects a weighted 

average of these three measures—rose 4.0 percent. 

Revised Measures 

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

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

revised estimates of productivity growth in the business and nonfarm business sectors are higher 

than those reported November 6, as downward revisions to hours were larger than downward 

revisions to output. Manufacturing productivity had a large downward revision in the third 

quarter as the downward revision to output outweighed the downward revision to hours. 

Hourly compensation was revised down in all three sectors. In the business and nonfarm 

business sectors unit labor costs rose 2.6 percent and 2.8 percent, respectively, in the third 

quarter. This is 0.8 percent lower than previously reported, reflecting both the downward 

revision to hourly compensation and the upward revision to productivity. Hourly compensation 

was also revised down in manufacturing, but the large downward revision in manufacturing 

productivity resulted in an upward revision to unit labor costs. 

 
6 

Table C. Previous and revised productivity and related measures: 

Quarterly percent change at seasonally adjusted annual rate 

Sector 

Productivity Output Hours 

Hourly 

compensation 

Real 

hourly 

compensation 

Unit 

labor 

costs 

Third quarter 2008 

Business: 

 Previous........................ 1.3 -1.5 -2.8 4.7 -1.9 3.4 

 Revised......................... 1.5 -1.7 -3.2 4.2 -2.4 2.6 

Nonfarm business: 

 Previous........................ 1.1 -1.7 -2.7 4.7 -1.9 3.6 

 Revised......................... 1.3 -1.9 -3.1 4.1 -2.4 2.8 

Manufacturing: 

 Previous........................ -1.0 -5.8 -4.9 5.0 -1.6 6.1 

 Revised......................... -2.7 -7.8 -5.3 4.7 -1.9 7.6 

Second quarter 2008 

Business: 

 Previous........................ 3.7 2.6 -1.0 3.8 -1.2 0.1 

 Revised......................... 3.7 2.6 -1.0 1.2 -3.7 -2.4 

Nonfarm business: 

 Previous........................ 3.6 2.8 -0.8 3.5 -1.4 -0.1 

 Revised......................... 3.6 2.8 -0.8 0.9 -3.9 -2.6 

Manufacturing: 

 Previous........................ -1.9 -3.4 -1.5 3.8 -1.2 5.8 

 Revised......................... -2.2 -3.7 -1.5 2.2 -2.7 4.5 

There were also revisions to second quarter data for the business, nonfarm business, and 

manufacturing sectors. Hourly compensation, real hourly compensation, and unit labor costs 

were revised in all three of these sectors to reflect new information on employee compensation 

published by the Bureau of Economic Analysis of the U.S. Department of Commerce on 

November 25. Hourly compensation growth was revised down 2.6 percent in the business and 

nonfarm business sectors, leading to similar downward revisions to real hourly compensation 

and unit labor costs. Second-quarter increases in manufacturing hourly compensation and unit 

labor costs were revised down to 2.2 percent and 4.5 percent, respectively. 

Manufacturing output in the second quarter was revised due to revised indexes of 

industrial production from the Board of Governors of the Federal Reserve. The downward 

revision of 0.3 percentage point led to a similar downward revision to manufacturing 

productivity. 

Revised measures: Nonfinancial corporations 

 Measures for the nonfinancial corporate sector also were revised to reflect updated 

information on output and employee compensation during second-quarter 2008 (table D). 

Output and productivity were revised down by 0.9 percentage point, and hours declined at the 

 
7 

 

same rate reported November 6. Hourly compensation growth was revised down by 1.4 

percentage points, and because hourly compensation was revised downward more than 

productivity, unit labor costs fell faster than previously reported, at a rate of 5.0 percent. 

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

Quarterly percent c anges at e h s asonally adjusted annual rates 

Productivity Output Hours 

Hourly 

compensation 

Real 

hourly 

compensation 

Unit 

labor 

costs 

Unit 

profits 

Implicit 

price 

deflator

Second quarter 2008 

Previous 8.6 6.9 -1.6 3.7 -1.3 -4.6 -8.4 -3.9 

Revised 7.7 6.0 -1.6 2.3 -2.6 -5.0 -7.7 -3.8 

Next release date 

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

February 5, 2009. Preliminary fourth-quarter and annual 2008 measures for the business, 

nonfarm business, and manufacturing sectors will be released at that time. 

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

economy in 2009 are: 

Reference period 2009 release date

2008:

Fourth quarter, Annual February 5 

Fourth quarter, Annual (revised) March 5 

2009:

First quarter May 7 

First quarter (revised) June 4 

Second quarter August 11 

Second quarter (revised) September 2 

Third quarter November 5 

Third quarter (revised) December 3 

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

source data in 2009. Each issue of Productivity and Costs contains a "Next release date"

paragraph that readers should use to confirm the dates above. 
8 

TECHNICAL NOTES 

Labor Hours: Hours data for the labor productivity and cost measures include hours for all 

persons working in the sector—wage and salary workers, the self-employed and unpaid family 

workers. The primary source of hours and employment data is the BLS Current Employment 

Statistics (CES) program, which provides monthly survey data on the number of jobs held by 

wage and salary workers in nonfarm establishments. The CES also provides average weekly 

paid hours of production and nonsupervisory workers in these establishments. 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 holding 
9 

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. 
10 

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 136.1 162.8 119.6 168.0 120.7 123.5 133.4 127.2 

 II 136.6 164.0 120.1 168.1 119.7 123.1 136.2 128.0 

 III 135.9 164.1 120.8 169.0 119.1 124.3 136.2 128.8 

 IV 135.9 164.8 121.2 172.6 122.1 127.0 133.4 129.4 

 ANNUAL 136.1 163.9 120.4 169.5 120.4 124.5 134.8 128.3 

2007 I 135.9 164.5 121.0 174.7 122.4 128.5 134.3 130.7 

 II 137.6 166.8 121.2 175.5 121.6 127.5 137.4 131.2 

 III 139.7 169.0 121.0 177.0 121.9 126.7 139.7 131.6 

 IV 139.7 168.8 120.8 178.9 121.7 128.1 139.2 132.2 

 ANNUAL 138.2 167.3 121.0 176.5 121.9 127.7 137.7 131.4 

2008 I 140.5 169.1 120.3 180.6 121.5 128.5 140.2 132.9 

 II 141.8 170.2 120.0 r181.1 r120.4 r127.7 r142.3 133.2 

 III r142.3 r169.4 r119.1 r182.9 r119.7 r128.6 r144.9 r134.7 

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

 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 10.6 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 -0.1 -0.7 -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 -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 2.3 0.7 -1.6 3.6 -0.6 1.3 3.1 2.0 

 II 3.7 2.6 -1.0 r1.2 r-3.7 r-2.4 r6.1 0.9 

 III r1.5 r-1.7 r-3.2 r4.2 r-2.4 r2.6 r7.4 4.5 

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

 Percent change from corresponding quarter of previous year 

2006 I 1.3 3.6 2.3 4.3 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 0.7 1.7 1.0 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 -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 3.4 -0.7 0.0 4.4 1.7 

 II 3.0 2.0 -1.0 r3.2 r-1.0 r0.2 r3.6 1.5 

 III r1.9 r0.2 r-1.6 r3.3 r-1.8 r1.4 r3.7 2.3 

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

See footnotes following Table 6. December 3, 2008 

r=revised Source: Bureau of Labor Statistics 
11 

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 135.1 163.2 120.8 166.8 119.8 123.5 135.5 127.9 

 II 135.7 164.3 121.1 167.1 118.9 123.2 138.6 128.8 

 III 135.0 164.4 121.8 167.9 118.3 124.4 138.3 129.5 

 IV 135.0 165.0 122.2 171.7 121.4 127.1 134.8 130.0 

 ANNUAL 135.2 164.2 121.5 168.4 119.6 124.6 136.8 129.1 

2007 I 135.0 164.7 122.0 173.7 121.8 128.7 135.2 131.1 

 II 136.4 167.0 122.4 174.1 120.7 127.7 138.2 131.5 

 III 138.3 169.2 122.3 175.5 120.8 126.9 140.3 131.8 

 IV 138.6 168.9 121.9 177.8 120.9 128.3 139.8 132.5 

 ANNUAL 137.1 167.5 122.2 175.3 121.1 127.9 138.4 131.7 

2008 I 139.5 169.3 121.4 179.5 120.8 128.7 141.0 133.2 

 II 140.8 170.5 121.1 r179.9 r119.6 r127.8 r143.3 133.5 

 III r141.2 r169.7 r120.2 r181.7 r118.9 r128.7 r146.2 r135.1 

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

 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 1.9 -2.0 4.1 -0.9 2.1 

 IV 0.2 1.4 1.2 9.3 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 -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 5.3 0.3 4.5 -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 -1.7 3.8 -0.4 1.2 3.6 2.1 

 II 3.6 2.8 -0.8 r0.9 r-3.9 r-2.6 r6.6 0.9 

 III r1.3 r-1.9 r-3.1 r4.1 r-2.4 r2.8 r8.3 r4.9 

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

 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 1.0 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 4.5 2.1 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 3.3 -0.8 0.0 4.3 1.6 

 II 3.2 2.1 -1.1 r3.3 r-0.9 r0.1 r3.7 1.5 

 III r2.1 0.3 r-1.8 r3.5 r-1.6 r1.4 r4.2 2.5 

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

See footnotes following Table 6. December 3, 2008 

r=revised Source: Bureau of Labor Statistics 
12 

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 184.0 150.7 81.9 181.4 122.1 98.6 

 II r183.0 r149.3 81.6 r182.4 r121.3 r99.7 

 III r181.7 r146.3 r80.5 r184.5 r120.7 r101.5 

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

 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 3.3 -0.8 -4.0 3.8 -0.5 0.5 

 II r-2.2 r-3.7 -1.5 r2.2 r-2.7 r4.5 

 III r-2.7 r-7.8 r-5.3 r4.7 r-1.9 r7.6 

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

 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 4.0 2.0 -1.9 2.5 -1.6 -1.4 

 II r2.4 r-0.2 -2.5 r3.4 r-0.8 r0.9 

 III r0.6 r-3.2 r-3.8 r4.6 r-0.6 r4.0 

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

See footnotes following Table 6. December 3, 2008 

r=revised Source: Bureau of Labor Statistics 
13 

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 215.5 186.9 86.7 176.6 118.9 82.0 

 II r213.1 r184.2 86.4 r178.1 r118.4 r83.6 

 III r214.7 r181.5 r84.5 r180.8 r118.3 r84.2 

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

 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 2.1 -0.4 -2.5 2.5 -1.7 0.4 

 II r-4.3 -5.6 -1.4 r3.5 r-1.5 r8.1 

 III r2.9 r-5.8 r-8.4 r6.1 r-0.6 r3.1 

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

 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 3.7 -1.7 2.1 -2.0 -3.2 

 II 2.5 0.2 -2.3 r3.3 r-1.0 r0.7 

 III r1.8 r-2.9 r-4.6 r5.0 r-0.3 r3.2 

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

See footnotes following Table 6. December 3, 2008 

r=revised Source: Bureau of Labor Statistics 
14 

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 155.0 115.7 74.6 188.0 126.5 121.3 

 II r155.0 r115.2 74.3 r187.9 r124.9 r121.2 

 III r150.9 r112.3 r74.4 r189.1 r123.7 r125.3 

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

 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 5.8 -1.3 -6.7 6.0 1.7 0.3 

 II r0.0 r-1.7 -1.7 r-0.3 r-5.0 r-0.3 

 III r-10.2 r-9.8 0.4 r2.6 r-3.8 r14.3 

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

 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 2.5 0.1 -2.4 3.4 -0.8 0.8 

 II r2.4 r-0.7 -3.0 r3.6 r-0.7 r1.1 

 III r-1.2 r-3.6 r-2.4 r4.0 r-1.2 r5.3 

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

See footnotes following Table 6. December 3, 2008 

r=revised Source: Bureau of Labor Statistics 
15 

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 148.7 181.1 121.8 176.2 118.6 118.5 119.0 118.6 150.3 121.5 

 II r151.5 r183.8 121.3 r177.2 r117.8 r117.0 r119.4 r117.6 r147.3 r120.3 

 III 153.3 184.6 120.4 179.4 117.4 117.0 121.1 118.1 155.7 121.5 

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

 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 -0.2 -1.4 -1.1 2.9 -1.3 3.2 0.3 2.4 -13.6 0.5 

 II r7.7 r6.0 -1.6 r2.3 r-2.6 r-5.0 r1.2 r-3.4 r-7.7 r-3.8 

 III 4.9 1.8 -3.0 5.0 -1.6 0.1 5.8 1.7 24.6 4.0 

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

 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 1.7 1.8 0.1 3.5 -0.7 1.7 1.6 1.7 -12.5 -0.1 

 II r2.8 r2.3 -0.5 r3.5 r-0.7 r0.7 r1.7 1.0 r-14.6 -1.0 

 III 3.5 2.0 -1.4 4.0 -1.2 0.5 2.8 1.1 -6.7 0.2 

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

See footnotes following Table 6. December 3, 2008 

r=revised Source: Bureau of Labor Statistics, 
16 

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 +1.4 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 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.