USDL 04-995                                      
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                           PRODUCTIVITY AND COSTS
                             First Quarter 2004 


     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised productivity data--as measured by output per hour of all
persons--for the first quarter of 2004.  The revised seasonally adjusted
annual rates of productivity change in the first quarter were:

               4.6 percent in the business sector and
               3.8 percent in the nonfarm business sector.

In both sectors, the first-quarter productivity gains were somewhat higher
than those reported initially on May 6.

     In manufacturing, the revised productivity changes in the first quarter
were:

               2.9 percent in manufacturing,
               5.9 percent in durable goods manufacturing, and
              -0.7 percent in nondurable goods manufacturing.

     Manufacturing productivity growth was revised down from the figure
reported on May 6, reflecting a downward revision to productivity growth in
nondurable goods manufacturing--which comprises less than forty percent of
employment in the sector.  Productivity in durable goods manufacturing was
unchanged from the figure released last month.  Output and hours in
manufacturing, which includes about 13 percent of U.S. business-sector
employment, tend to vary more from quarter to quarter than data for the
aggregate business and nonfarm business sectors.  First-quarter measures are
summarized in table A and appear in detail in tables 1 through 5.

     The data sources and methods used in the preparation of the
manufacturing series differ from those used in preparing the business and
nonfarm business series, and these measures are not directly comparable.
Output measures for business and nonfarm business are based on measures of
gross domestic product prepared by the Bureau of Economic Analysis of the
U.S. Department of Commerce.  Quarterly output measures for manufacturing
reflect indexes of industrial production independently prepared by the Board
of Governors of the Federal Reserve System.  See Technical Notes for further
information on data sources.

-----------------------------------------------------------------------------
Table A. Productivity and costs: Revised first-quarter 2004 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            4.6        5.2       0.5     5.9       2.2       1.2
Nonfarm business    3.8        5.4       1.5     4.6       0.9       0.8
Manufacturing       2.9        5.8       2.8     6.2       2.5       3.1
  Durable           5.9        9.3       3.2     5.5       1.8      -0.4
  Nondurable       -0.7        1.4       2.1     7.3       3.6       8.1
  
                      Percent change from same quarter a year ago
-----------------------------------------------------------------------------                      
Business            5.6        5.9       0.3     4.8       2.8      -0.8
Nonfarm business    5.5        5.9       0.4     4.6       2.7      -0.8
Manufacturing       5.2        3.1      -2.0     6.1       4.2       0.9
  Durable           7.4        5.7      -1.6     6.3       4.4      -1.0
  Nondurable        2.8        0.1      -2.6     5.6       3.7       2.8
-----------------------------------------------------------------------------

Business

     Productivity increased 4.6 percent in the business sector (seasonally
adjusted annual rate) from the fourth quarter of 2003 to the first quarter of
2004, as output increased 5.2 percent and hours worked by all persons grew
0.5 percent (table 1).

     Hourly compensation increased 5.9 percent during the first quarter of
2004, up from 3.8 percent in the previous quarter, as revised.  The first
quarter increase was the largest in the sector since an 8.5-percent increase
in the third quarter of 2000.  This measure of compensation includes wages
and salaries, supplements, employer contributions to employee benefit plans,
and taxes.  Real hourly compensation, which takes into account changes in
consumer prices, rose by 2.2 percent in the first quarter of 2004, down from
a 3.0-percent rise in the previous quarter.
     
     Unit labor costs rose 1.2 percent during the first quarter of 2004.  In
the fourth quarter of 2003, unit labor costs had risen 1.9 percent.  The
change in unit labor costs approximates the change in hourly compensation
less the change in productivity.  The implicit price deflator for business
output, which reflects changes in both unit labor costs and unit nonlabor
payments, grew by 2.2 percent in the first quarter of 2004.

Nonfarm business

     Productivity rose 3.8 percent in the nonfarm business sector during the
first quarter of 2004, reflecting a 5.4-percent rise in output and a 1.5-
percent increase in working hours of all persons (table 2).

     Hourly compensation increased 4.6 percent in the first quarter of 2004,
slightly more rapidly than in the previous quarter when it grew by 4.2
percent.  However, when the rise in consumer prices is taken into account,
real hourly compensation in the first quarter, which rose 0.9 percent, grew
more slowly than in the fourth quarter, when it increased by 3.4 percent.

     Unit labor costs grew 0.8 percent during the first quarter of 2004, less
than the 1.7-percent increase of the fourth quarter. The implicit price
deflator for nonfarm business output rose by 2.1 percent in the first quarter
of 2004.

Manufacturing

     Productivity rose 2.9 percent in manufacturing in the first quarter of
2004, as output grew 5.8 percent and working hours of all persons increased
2.8 percent (seasonally adjusted annual rates).  In durable goods industries,
productivity grew 5.9 percent, as output expanded 9.3 percent and hours rose
3.2 percent.  In nondurable goods industries, productivity fell 0.7 percent,
as output grew 1.4 percent and hours grew faster, 2.1 percent (tables 3, 4,
and 5).

     Hourly compensation in manufacturing rose 6.2 percent during the first
quarter.  This increase reflects a rise of 5.5 percent in the hourly
compensation of persons in durable goods industries and a larger increase,
7.3 percent, in the hourly compensation of workers in nondurable goods
industries.  Real hourly compensation, which takes account of changes in
consumer prices, rose 2.5 percent for all manufacturing workers.

     Unit labor costs rose 3.1 percent in manufacturing during the first
quarter.  In durable goods industries, rapid productivity growth enabled
producers to more than offset the increase in hourly compensation and unit
labor costs declined by 0.4 percent.  In nondurable goods industries,
however, where productivity dropped in the first quarter, unit labor costs
rose substantially, 8.1 percent.

Nonfinancial corporations

     Preliminary first-quarter 2004 measures of productivity and costs for
nonfinancial corporations also were announced today (tables B and 6).
Productivity rose 2.3 percent in the first quarter, less than the 4.3-percent
rise (as revised) recorded in the fourth quarter of 2003.  Output increased
4.5 percent in first quarter 2004, while employee-hours rose 2.1 percent
(seasonally adjusted annual rates).  The 2.1-percent increase in employee
hours was the fastest one-quarter rise since a similar increase in the first
quarter of 2000.  Nonfinancial corporations include all corporations doing
business in the United States, except banks, stock and commodity brokers, and
finance and insurance agencies.

-----------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Preliminary first-quarter 2004
productivity and cost measures
(Seasonally adjusted annual rates)
-----------------------------------------------------------------------------
                                           Real                    
                                 Hourly    hourly    Unit            Implicit
         Produc-                 compen-   compen-   labor  Unit     price
Period 	 tivity   Output  Hours  sation    sation    costs  profits  deflator
-----------------------------------------------------------------------------                                                                
                 Percent change from preceding quarter
                 
2004 I     2.3      4.5    2.1     5.1      1.4       2.7     -0.9     1.9
-----------------------------------------------------------------------------
                 Percent change from same quarter a year ago
                                  
2004 I     6.4      6.7    0.3     4.9      3.0      -1.4     29.0     1.1
-----------------------------------------------------------------------------     
     
     Hourly compensation increased 5.1 percent during the first quarter of
2004.  When the rise in consumer prices is taken into account, real hourly
compensation rose 1.4 percent in the first quarter.  Unit labor costs in
nonfinancial corporations rose 2.7 percent in the first quarter, after
falling in eight of the previous nine quarters.

REVISED MEASURES

     Current and previous measures for the first quarter of 2004 in the
business, nonfarm business, and manufacturing sectors are compared in table
C.  In the business and nonfarm business sectors, both output and hours were
revised up somewhat.  Since output was revised up more than hours,
productivity also is higher than reported on May 6, based on information
available at that time.  In the manufacturing sector, hours were revised up
while output was not.  As a result, productivity was revised down in the
first quarter.

-----------------------------------------------------------------------------
Table C. 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
-----------------------------------------------------------------------------                                                                   
                             First quarter 2004
Business:                                                          
  Previous            4.5       4.8      0.3     5.3        1.6       0.8
  Current             4.6       5.2      0.5     5.9        2.2       1.2
Nonfarm business:                                                  
  Previous            3.5       4.9      1.3     4.0        0.4       0.5
  Current             3.8       5.4      1.5     4.6        0.9       0.8
Manufacturing:                                                     
  Previous            3.1       5.8      2.7     5.2        1.5       2.0
  Current             2.9       5.8      2.8     6.2        2.5       3.1
  
                             Fourth quarter 2003
Business:                                                          
  Previous            1.8       3.9      2.0     2.1        1.3       0.2
  Current             1.8       3.9      2.0     3.8        3.0       1.9
Nonfarm business:                                                  
  Previous            2.5       4.2      1.6     2.5        1.7       0.0
  Current             2.5       4.2      1.6     4.2        3.4       1.7
Manufacturing:                                                     
  Previous            4.8       6.2      1.4     2.9        2.1      -1.8
  Current             4.8       6.2      1.4     6.8        6.0       2.0
  
                             Annual average 2003 
Business:                                                          
  Previous            4.5       3.7     -0.8     3.5        1.2      -0.9
  Current             4.5       3.7     -0.8     3.6        1.3      -0.8
Nonfarm business:                                                   
  Previous            4.4       3.7     -0.7     3.4        1.1      -1.0
  Current             4.4       3.7     -0.7     3.5        1.2      -0.9
Manufacturing:                                                     
  Previous            5.1       0.1     -4.8     5.6        3.2       0.4
  Current             5.1       0.1     -4.8     5.9        3.5       0.7
-----------------------------------------------------------------------------  
     
     Hourly compensation was revised up in all sectors in the first quarter
of 2004.  In the business and nonfarm business sectors, unit labor costs were
revised up less than hourly compensation since compensation costs were
somewhat offset by the upward revisions to productivity.  In manufacturing,
where first quarter productivity was revised down, unit labor costs were
revised up by more than the revision to hourly compensation.
     
     The BLS also announced revised hourly compensation and unit labor costs
for the fourth quarter and annual average of 2003.  In the business and
nonfarm business sectors, hourly compensation and unit labor costs grew more
rapidly than announced on May 6.  The revisions to fourth quarter hourly
compensation were large enough to change movements in the annual averages for
both sectors.  In the year 2003, hourly compensation grew 0.1 percentage-
point more--and unit labor costs dropped 0.1 percentage point less--than
reported on May 6.  In the manufacturing sector, fourth quarter hourly
compensation was revised up sharply and now shows a rise of 6.8 percent for
the quarter.  Unit labor costs, which originally had shown a decline in the
quarter, now show an increase of 2.0 percent.  For the full year 2003, both
hourly compensation and unit labor costs were revised up by 0.3 percentage
point.

REVISED MEASURES: NONFINANCIAL CORPORATIONS

     Fourth quarter and annual average 2003 measures also were revised for
the nonfinancial corporate sector.  In the fourth quarter of 2003, output
and productivity were revised up by 1.0 percentage point; productivity rose
4.3 percent.  Hourly compensation was revised up and unit labor costs now
show a decline of 0.4 percent for the quarter.  Annual average productivity
and hourly compensation rose slightly faster than reported on May 6 while
unit labor costs show less of a decline than originally reported.

-----------------------------------------------------------------------------
Table D.  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
-----------------------------------------------------------------------------                                                                  
                      Fourth quarter 2003
                      
Previous   3.3     5.0     1.6     2.3     1.6     -1.0    12.7      1.1
Current    4.3     6.0     1.6     3.9     3.1     -0.4    11.6      1.1

                      Annual average 2003
                      
Previous   5.7     4.2    -1.5     4.2     1.8     -1.5    20.5      0.2
Current    5.8     4.2    -1.5     4.3     1.9     -1.4    20.4      0.2
-----------------------------------------------------------------------------                                      
                                      
                                      
                              NEXT RELEASE DATE
                                      
     The next release of Productivity and Costs is scheduled for 8:30 AM EDT,
Tuesday, Aug. 10, 2004.  Preliminary second-quarter measures for business,
nonfarm business, and manufacturing will be released at that time.  The Aug.
10 release also will incorporate the three-year revision of the national
income and product accounts.  In addition, the release will include changes
in employment and hours due to incorporation of new hours measures for
supervisory and nonproduction workers in private nonfarm businesses and new
information on seasonal patterns.

Current and upcoming changes to productivity and cost data

     Beginning with this release of productivity and costs, BLS is issuing
revised measures for hourly compensation and unit labor costs for both of the
two previous quarters.  Previously, revisions to the earlier quarter had been
reported two months later in the next quarter's preliminary estimates.  This
change is in accordance with the announcement by the Bureau of Economic
Analysis of their new revision schedule for wage and salary data.  See "Gross
Domestic Product: First Quarter 2004 (Advance)" (BEA 04-18), released April
29.

     New estimates of average weekly hours at work for nonproduction and
supervisory workers will be introduced into the BLS major sector productivity
and cost measures beginning with the August 10, 2004, release.  An article
discussing these new measures and the effects of this change was published in
the April 2004 issue of Monthly Labor Review.  A technical note describing
the methodology will be available this summer.

     In addition, beginning on Aug. 10, concurrent seasonal adjustment will
be used when measuring employment and hours for the farm sector, nonfarm self-
employed, and nonfarm unpaid family workers and hours for employees of
government enterprises in the productivity and cost measures.  Late in 2004
or early in 2005, BLS also intends to improve the way it uses these series
from the Current Population Survey in the productivity program, adjusting
them to account for the effects of multiple jobholding.  Further information
on this change will be announced later this year.



                                      
                               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  em
ployment  data is the BLS Current Employment Statistics (CES) program,  which
provides  monthly survey data on the number of jobs held by wage  and  salary
workers in nonfarm establishments.  The CES also provides average weekly paid
hours of production and nonsupervisory workers in these establishments.   The
Office of Productivity and Technology estimates average weekly paid hours  of
nonproduction  and supervisory workers.  Weekly paid hours were  adjusted  to
hours at work using the BLS Hours at Work survey, conducted for this purpose.
Data from the National Compensation Survey are used for recent years.
     Data  from  the  BLS Current Population Survey (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.

Output: Business sector output is an annual-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 also 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
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 3-digit NAICS industries: wood  product
manufacturing;  nonmetallic  mineral  product  manufacturing;  primary  metal
manufacturing;  fabricated  metal  product manufacturing;  machinery  manufac
turing;  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 manufac
turing;  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  manu
facturing; and plastics and rubber products manufacturing.
   Nonfinancial  corporate output is an annual-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 companies,  offices
of  other  holding  companies,  or  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.
     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



  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

  2002       I     122.8      142.6     116.1     141.8       114.1      115.5       115.0      115.3
            II     123.3      143.1     116.1     142.6       113.8      115.7       115.8      115.7
           III     124.7      144.6     115.9     143.1       113.5      114.7       117.9      115.9
            IV     125.4      145.1     115.8     143.8       113.5      114.7       119.3      116.5

        ANNUAL     124.0      143.8     116.0     142.8       113.7      115.2       117.0      115.8

  2003       I     126.4      145.8     115.4     145.5       113.8      115.1       120.0      116.9
            II     128.6      147.3     114.5     147.4       115.1      114.6       121.5      117.2
           III     131.3      151.0     115.0     148.9       115.6      113.4       124.6      117.6
            IV     131.9      152.4     115.5    r150.3      r116.4     r113.9      r124.8      118.0

        ANNUAL     129.6      149.1     115.1    r148.0      r115.2     r114.2      r122.8      117.4

  2004       I    r133.5     r154.4    r115.7    r152.4      r117.1     r114.2      r125.9      118.6
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2002       I       8.4        5.6      -2.6       0.9        -0.4       -6.9        11.0       -0.7
            II       1.5        1.4      -0.1       2.3        -1.1        0.9         3.0        1.6
           III       4.9        4.3      -0.5       1.3        -1.0       -3.4         7.4        0.5
            IV       2.0        1.6      -0.5       2.2         0.3        0.1         4.9        1.9

        ANNUAL       4.9        2.3      -2.5       2.2         0.6       -2.5         6.8        0.8

  2003       I       3.5        1.9      -1.5       4.8         1.0        1.3         2.3        1.6
            II       7.2        4.2      -2.8       5.3         4.6       -1.7         5.2        0.9
           III       8.7       10.3       1.5       4.1         1.6       -4.3        10.6        1.3
            IV       1.8        3.9       2.0      r3.8        r3.0       r1.9        r0.4        1.3

        ANNUAL       4.5        3.7      -0.8      r3.6        r1.3      r-0.8        r4.9        1.4

  2004       I      r4.6       r5.2      r0.5      r5.9        r2.2       r1.2        r3.9       r2.2
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2002       I       5.1        1.0      -3.9       2.6         1.4       -2.3         7.4        1.1
            II       4.7        1.6      -2.9       2.5         1.2       -2.1         5.7        0.7
           III       5.5        3.4      -2.1       2.1         0.5       -3.3         7.7        0.6
            IV       4.2        3.2      -0.9       1.7        -0.6       -2.4         6.5        0.8

        ANNUAL       4.9        2.3      -2.5       2.2         0.6       -2.5         6.8        0.8

  2003       I       3.0        2.3      -0.6       2.6        -0.2       -0.3         4.4        1.4
            II       4.4        3.0      -1.3       3.4         1.2       -1.0         4.9        1.2
           III       5.3        4.4      -0.8       4.1         1.9       -1.2         5.7        1.4
            IV       5.3        5.0      -0.2      r4.5        r2.5      r-0.7        r4.6        1.3

        ANNUAL       4.5        3.7      -0.8      r3.6        r1.3      r-0.8        r4.9        1.4

  2004       I      r5.6       r5.9      r0.3      r4.8        r2.8      r-0.8        r5.0        1.4
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       June 3, 2004
  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

  2002       I     122.6      143.1     116.7     141.1       113.5      115.1       116.9      115.8
            II     122.8      143.4     116.8     141.9       113.2      115.6       117.6      116.3
           III     124.2      144.8     116.6     142.4       112.9      114.6       119.9      116.6
            IV     124.9      145.4     116.4     143.2       113.0      114.6       121.3      117.1

        ANNUAL     123.6      144.2     116.6     142.1       113.2      115.0       119.0      116.4

  2003       I     126.0      146.3     116.1     144.6       113.1      114.8       122.2      117.5
            II     127.9      147.6     115.4     146.3       114.2      114.4       123.4      117.7
           III     130.8      151.3     115.7     148.0       114.9      113.2       126.5      118.1
            IV     131.6      152.9     116.2    r149.5      r115.9     r113.6      r126.1      118.2

        ANNUAL     129.1      149.5     115.9    r147.1      r114.5     r114.0      r124.6      117.9

  2004       I    r132.8     r154.9    r116.6    r151.2      r116.1     r113.9      r127.4     r118.9
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2002       I       9.8        6.7      -2.9       1.2        -0.1       -7.8        13.0       -0.7
            II       0.7        0.8       0.1       2.3        -1.1        1.6         2.3        1.9
           III       4.5        4.0      -0.5       1.3        -1.0       -3.1         8.2        1.0
            IV       2.3        1.6      -0.7       2.2         0.3       -0.1         4.8        1.7

        ANNUAL       5.0        2.3      -2.6       2.3         0.7       -2.5         7.1        0.9

  2003       I       3.4        2.4      -1.0       4.0         0.2        0.6         3.0        1.5
            II       6.2        3.8      -2.3       4.9         4.2       -1.3         4.0        0.7
           III       9.5       10.4       0.9       4.7         2.3       -4.3        10.2        1.1
            IV       2.5        4.2       1.6      r4.2        r3.4       r1.7       r-1.1        0.6

        ANNUAL       4.4        3.7      -0.7      r3.5        r1.2      r-0.9        r4.7        1.2

  2004       I      r3.8       r5.4      r1.5      r4.6        r0.9       r0.8        r4.2       r2.1
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2002       I       5.3        1.1      -4.0       2.7         1.4       -2.5         7.6        1.0
            II       4.7        1.6      -3.0       2.6         1.3       -2.0         5.7        0.7
           III       5.5        3.2      -2.1       2.2         0.6       -3.1         8.0        0.8
            IV       4.3        3.2      -1.0       1.8        -0.5       -2.4         7.0        1.0

        ANNUAL       5.0        2.3      -2.6       2.3         0.7       -2.5         7.1        0.9

  2003       I       2.7        2.2      -0.5       2.5        -0.4       -0.3         4.5        1.5
            II       4.1        2.9      -1.1       3.1         0.9       -1.0         5.0        1.2
           III       5.3        4.5      -0.8       4.0         1.7       -1.3         5.4        1.3
            IV       5.4        5.1      -0.2      r4.5        r2.5      r-0.9        r3.9        1.0

        ANNUAL       4.4        3.7      -0.7      r3.5        r1.2      r-0.9        r4.7        1.2

  2004       I      r5.5       r5.9       0.4      r4.6        r2.7      r-0.8        r4.2        1.1
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       June 3, 2004
  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

  2002       I            144.0        130.5         90.6        141.1          113.5          98.0
            II            146.3        131.8         90.1        143.3          114.3          97.9
           III            148.5        132.4         89.2        144.6          114.7          97.4
            IV            149.5        131.3         87.8        146.5          115.7          98.0

        ANNUAL            147.1        131.5         89.4        143.8          114.5          97.8

  2003       I            151.4        131.3         86.7        149.0          116.5          98.4
            II            152.6        130.1         85.3        151.2          118.0          99.0
           III            156.4        131.5         84.1        153.2          118.9          98.0
            IV            158.2        133.5         84.4       r155.8         r120.7         r98.5

        ANNUAL            154.6        131.6         85.1       r152.3         r118.5         r98.5

  2004       I           r159.3        135.4         85.0       r158.1         r121.4         r99.2
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2002       I             10.2          2.5         -7.0          4.2            2.8          -5.5
            II              6.5          4.0         -2.3          6.2            2.7          -0.2
           III              6.0          1.7         -4.1          3.7            1.4          -2.2
            IV              3.0         -3.1         -5.9          5.5            3.6           2.5

        ANNUAL              7.2         -0.6         -7.3          4.0            2.4          -3.0

  2003       I              5.1          0.1         -4.8          6.9            3.0           1.7
            II              3.3         -3.6         -6.6          5.9            5.2           2.6
           III             10.1          4.3         -5.3          5.6            3.1          -4.1
            IV              4.8          6.2          1.4         r6.8           r6.0          r2.0

        ANNUAL              5.1          0.1         -4.8         r5.9           r3.5          r0.7

  2004       I             r2.9          5.8         r2.8         r6.2           r2.5          r3.1
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2002       I              6.7         -3.4         -9.5          1.8            0.5          -4.6
            II              7.6         -1.1         -8.1          4.3            3.0          -3.1
           III              8.1          0.9         -6.6          5.2            3.5          -2.7
            IV              6.4          1.2         -4.9          4.9            2.6          -1.4

        ANNUAL              7.2         -0.6         -7.3          4.0            2.4          -3.0

  2003       I              5.1          0.6         -4.3          5.6            2.6           0.4
            II              4.3         -1.3         -5.4          5.5            3.3           1.1
           III              5.3         -0.6         -5.7          6.0            3.7           0.6
            IV              5.8          1.7         -3.9         r6.3           r4.3          r0.5

        ANNUAL              5.1          0.1         -4.8         r5.9           r3.5          r0.7

  2004       I             r5.2          3.1         -2.0         r6.1           r4.2          r0.9
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                June 3, 2004 
  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

  2002       I            161.2        152.6         94.7        140.0          112.6          86.8
            II            164.4        154.7         94.1        142.4          113.5          86.6
           III            167.4        155.9         93.1        143.5          113.8          85.7
            IV            171.0        156.1         91.3        145.7          115.0          85.2

        ANNUAL            166.0        154.8         93.3        142.9          113.7          86.1

  2003       I            173.8        156.6         90.1        147.8          115.6          85.0
            II            175.5        155.1         88.4        150.1          117.2          85.5
           III            181.6        158.3         87.2        152.5          118.4          84.0
            IV            184.1        161.9         87.9       r155.1         r120.1         r84.2

        ANNUAL            178.7        158.0         88.4       r151.4         r117.8         r84.7

  2004       I           r186.8        165.5         88.6       r157.2         r120.7         r84.2
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2002       I             11.9          2.8         -8.1          1.7            0.4          -9.1
            II              8.0          5.5         -2.3          7.0            3.4          -0.9
           III              7.7          3.3         -4.1          3.3            0.9          -4.1
            IV              8.9          0.4         -7.8          6.1            4.1          -2.6

        ANNUAL              8.5         -0.7         -8.5          3.8            2.1          -4.4

  2003       I              6.7          1.4         -5.0          6.0            2.2          -0.7
            II              4.0         -3.9         -7.5          6.5            5.8           2.4
           III             14.5          8.4         -5.3          6.5            4.0          -7.0
            IV              5.6          9.4          3.5         r6.8           r6.0          r1.1

        ANNUAL              7.7          2.0         -5.3         r6.0           r3.6         r-1.6

  2004       I              5.9          9.3         r3.2         r5.5           r1.8         r-0.4
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2002       I              6.9         -4.9        -11.0          1.5            0.3          -5.0
            II              8.4         -1.8         -9.4          4.1            2.8          -4.0
           III              9.4          1.2         -7.5          5.0            3.3          -4.1
            IV              9.1          3.0         -5.6          4.5            2.2          -4.2

        ANNUAL              8.5         -0.7         -8.5          3.8            2.1          -4.4

  2003       I              7.8          2.6         -4.8          5.6            2.6          -2.1
            II              6.8          0.3         -6.1          5.5            3.2          -1.2
           III              8.5          1.5         -6.4          6.3            4.0          -2.0
            IV              7.6          3.7         -3.7         r6.5           r4.5         r-1.1

        ANNUAL              7.7          2.0         -5.3         r6.0           r3.6         r-1.6

  2004       I              7.4          5.7         -1.6         r6.3           r4.4         r-1.0
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                June 3, 2004 
  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

  2002       I            126.6        107.2         84.7        141.6          113.9         111.8
            II            128.1        107.8         84.1        143.3          114.3         111.9
           III            129.4        107.7         83.3        144.9          114.9         112.0
            IV            127.9        105.7         82.7        146.7          115.8         114.7

        ANNUAL            128.0        107.1         83.7        144.1          114.7         112.6

  2003       I            128.8        105.3         81.8        149.7          117.1         116.3
            II            129.4        104.4         80.7        151.6          118.4         117.1
           III            131.1        104.3         79.6        153.1          118.8         116.8
            IV            132.6        105.0         79.2       r155.4         r120.4        r117.2

        ANNUAL            130.5        104.8         80.3       r152.4         r118.6        r116.8

  2004       I           r132.3       r105.4        r79.6       r158.2         r121.5        r119.5
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2002       I              7.5          2.0         -5.1          9.5            8.1           1.8
            II              4.8          2.2         -2.5          4.9            1.3           0.1
           III              4.1         -0.2         -4.1          4.6            2.2           0.5
            IV             -4.7         -7.3         -2.8          5.0            3.0          10.1

        ANNUAL              5.1         -0.6         -5.4          4.9            3.2          -0.2

  2003       I              2.9         -1.5         -4.3          8.6            4.7           5.5
            II              2.0         -3.2         -5.2          5.1            4.5           3.1
           III              5.2         -0.4         -5.3          3.9            1.4          -1.3
            IV              4.7          2.6         -1.9         r6.2           r5.5          r1.5

        ANNUAL              1.9         -2.2         -4.0         r5.8           r3.4          r3.8

  2004       I            r-0.7         r1.4         r2.1         r7.3           r3.6          r8.1
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2002       I              5.5         -1.7         -6.9          2.8            1.6          -2.6
            II              5.8         -0.4         -5.8          5.0            3.7          -0.7
           III              6.0          0.5         -5.2          5.8            4.1          -0.2
            IV              2.8         -0.9         -3.6          6.0            3.6           3.0

        ANNUAL              5.1         -0.6         -5.4          4.9            3.2          -0.2

  2003       I              1.7         -1.8         -3.4          5.8            2.8           4.0
            II              1.0         -3.1         -4.1          5.8            3.6           4.7
           III              1.3         -3.1         -4.4          5.6            3.4           4.3
            IV              3.7         -0.7         -4.2         r6.0           r4.0          r2.2

        ANNUAL              1.9         -2.2         -4.0         r5.8           r3.4          r3.8

  2004       I             r2.8         r0.1        r-2.6         r5.6           r3.7          r2.8
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                June 3, 2004 
  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-    labor    labor    costs    fits   deflator
      quarter   hour      Output  hours      (1)      sation(2)  costs    costs(6) (7)      (8)      (4)
  ----------------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  2002       I    126.4    150.2     118.8    138.1     111.1     109.3    111.9    110.0    105.3    109.5
            II    128.3    152.2     118.7    139.6     111.4     108.8    111.5    109.6    112.3    109.8
           III    129.8    153.4     118.2    140.6     111.5     108.3    111.5    109.2    111.8    109.4
            IV    131.4    154.5     117.6    142.0     112.1     108.1    111.3    109.0    116.2    109.6

        ANNUAL    128.9    152.6     118.3    140.1     111.5     108.6    111.5    109.4    111.4    109.6

  2003       I    132.2    154.7     117.0    143.3     112.1     108.4    110.7    109.0    114.0    109.5
            II    135.3    157.3     116.3    145.3     113.5     107.4    108.0    107.6    130.7    109.6
           III    138.4    160.9     116.3    147.1     114.1     106.3    107.4    106.6    143.4    109.9
            IV   r139.8   r163.2     116.7   r148.5    r115.0    r106.2   r107.5    106.5   r147.4    110.2

        ANNUAL   r136.4   r159.0     116.6   r146.0    r113.7    r107.1    108.4    107.4   r134.1    109.8

  2004       I    140.6    165.0     117.3    150.3     115.4     106.9    107.8    107.1    147.1    110.7

  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2002       I      4.6      2.3      -2.2     -2.5      -3.7      -6.7      1.5     -4.6     42.4     -1.4
            II      6.0      5.6      -0.4      4.4       0.9      -1.5     -1.4     -1.5     29.5      0.9
           III      4.9      3.2      -1.6      3.0       0.7      -1.8      0.0     -1.3     -1.7     -1.4
            IV      4.9      2.8      -2.0      3.9       2.0      -0.9     -0.4     -0.8     16.7      0.7

        ANNUAL      5.1      2.0      -3.0      2.3       0.7      -2.7      1.2     -1.6     21.9      0.1

  2003       I      2.4      0.5      -1.9      3.8       0.0       1.3     -2.4      0.3     -7.4     -0.5
            II      9.7      7.1      -2.4      5.7       5.0      -3.7     -9.3     -5.2     72.6      0.6
           III      9.5      9.4      -0.1      4.9       2.4      -4.2     -2.1     -3.6     45.0      0.9
            IV     r4.3     r6.0       1.6     r3.9      r3.1     r-0.4     r0.2    r-0.3    r11.6      1.1

        ANNUAL     r5.8      4.2      -1.5     r4.3      r1.9     r-1.4     -2.8     -1.8    r20.4      0.2

  2004       I      2.3      4.5       2.1      5.1       1.4       2.7      1.2      2.3     -0.9      1.9
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  2002       I      4.2     -0.3      -4.3      2.3       1.0      -1.8      3.4     -0.5     15.8      0.8
            II      5.2      1.7      -3.4      2.5       1.2      -2.6      1.5     -1.5     23.2      0.3
           III      5.8      3.1      -2.5      2.1       0.5      -3.4      0.1     -2.5     28.2     -0.3
            IV      5.1      3.5      -1.6      2.2      -0.1      -2.8     -0.1     -2.1     20.6     -0.3

        ANNUAL      5.1      2.0      -3.0      2.3       0.7      -2.7      1.2     -1.6     21.9      0.1

  2003       I      4.6      3.0      -1.5      3.8       0.9      -0.7     -1.1     -0.8      8.3     -0.1
            II      5.5      3.4      -2.0      4.1       1.9      -1.3     -3.1     -1.8     16.4     -0.1
           III      6.6      4.9      -1.6      4.6       2.3      -1.9     -3.6     -2.4     28.3      0.4
            IV     r6.5     r5.7      -0.7     r4.6      r2.6     r-1.8    r-3.5    r-2.2    r26.8      0.5

        ANNUAL     r5.8      4.2      -1.5     r4.3      r1.9     r-1.4     -2.8     -1.8    r20.4      0.2

  2004       I      6.4      6.7       0.3      4.9       3.0      -1.4     -2.6     -1.8     29.0      1.1
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        June 3, 2004
  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
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
-1.4 and +1.5 index points approximately 95 percent of the time.  This
interval is based on the performance of this measure between the fourth
quarter of 1995 and the fourth quarter of 2003.



                            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 1978-2003 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 from the
     original data rather than index numbers.  Annual changes:  Percent
     change between annual average levels.

(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.