USDL 99-53
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 10:00 A.M. EST,
TUESDAY, MARCH 9, 1999.

Internet address:      http://stats.bls.gov/lprhome.htm
Historical, technical
  information:         (202) 606-5606
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Media contact:         (202) 606-5902



                           PRODUCTIVITY AND COSTS
                  Fourth Quarter and Annual Averages, 1998


     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised fourth-quarter seasonally-adjusted annual rates of
productivity change--as measured by output per hour of all persons--and
revised annual changes for the full year 1998.  The revised fourth-quarter
productivity increases in both the business and nonfarm business sectors were
the largest in six years.  Percent changes in business and nonfarm business
productivity were:

                                     Fourth  Annual averages
                                    quarter     1997-1998
     Business sector                   4.8          2.4
     Nonfarm business sector           4.6          2.2
     
     For the year 1998, productivity increases in both sectors were larger
than those posted for 1997, but slightly less than the increases that
occurred in 1996.  Fourth-quarter productivity and related measures are
summarized in table A and appear in detail in tables 1 through 5; the
preliminary and revised fourth-quarter and annual data appear in table C.

     In the manufacturing sector, increases in productivity were:

                                     Fourth  Annual averages
                                    quarter     1997-1998
     Manufacturing                     5.2          4.2
       Durable goods manufacturing     8.4          6.8
       Nondurable goods manufacturing  1.4          1.2

     Manufacturing productivity rose at a 5.2 percent annual rate in the
fourth quarter, as output grew 4.7 percent and hours of all persons fell by
0.5 percent (table A).  On an annual basis, manufacturing productivity rose
4.2 percent in 1998, more slowly than it had in the previous year, when it
grew 4.9 percent.  Output and hours in manufacturing, which includes about 17
percent of U.S. business-sector employment, tend to vary more from quarter to
quarter than data for the more aggregate business and nonfarm business
sectors.

-----------------------------------------------------------------------
Table A. Productivity and costs: Revised fourth-quarter 1998 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           4.8       7.4      2.4     4.0       2.2      -0.8
 Nonfarm business   4.6       7.5      2.8     3.5       1.7      -1.1
 Manufacturing      5.2       4.7     -0.5     3.3       1.5      -1.8
   Durable          8.4       8.5      0.1     3.2       1.4      -4.8
   Nondurable       1.4       0.1     -1.3     3.3       1.6       1.9
-----------------------------------------------------------------------
                      Percent change from same quarter a year ago
 Business           2.9       5.0      2.1     4.2       2.6       1.2
 Nonfarm business   2.7       5.0      2.2     4.0       2.5       1.3
 Manufacturing      3.8       2.5     -1.3     3.3       1.7      -0.6
   Durable          6.3       5.3     -0.9     2.2       0.7      -3.9
   Nondurable       0.9      -1.0     -1.8     4.9       3.3       4.0
-----------------------------------------------------------------------


     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 data 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.


                    THIRD-TO-FOURTH QUARTER CHANGES, 1998
                                      
Business

     Business sector productivity rose at a 4.8 percent annual rate in the
fourth quarter of 1998, as output increased 7.4 percent and hours of all
persons engaged in the sector increased 2.4 percent (table 1).  The fourth-
quarter increases in both labor productivity and output were the largest
since the fourth quarter of 1992, when productivity rose 5.8 percent and
output increased by 7.9 percent.

     Hourly compensation during the fourth quarter of 1998 rose faster, 4.0
percent, than it had in the previous quarter, when it grew 3.7 percent.  This
measure includes wages and salaries, supplements, employer contributions to
employee-benefit plans, and taxes.  Unit labor costs, which reflect changes
in both hourly compensation and productivity, decreased at a 0.8 percent
annual rate during the fourth quarter. This decrease was the first since a
1.8-percent decline in the first quarter of 1996.

     Real hourly compensation, which takes into account changes in the
Consumer Price Index for All Urban Consumers (CPI-U), rose at a 2.2 percent
annual rate for persons in the business sector. This is comparable to the
increases that occurred in the previous two quarters (2.0 percent in the
third quarter and 2.3 percent in the second quarter).

     The implicit price deflator for business output, which reflects changes
in unit labor costs and unit nonlabor payments, rose 0.2 percent in the
fourth quarter.  This was the fifth consecutive rise of less than 1.0
percent.

Nonfarm business

     In the nonfarm business sector, productivity rose at an annual rate of
4.6 percent in the fourth quarter, as output rose 7.5 percent and hours of
all persons--employees, proprietors, and unpaid family workers--rose 2.8
percent (table 2).  As in the larger business sector, the fourth-quarter
gains in productivity and output were the greatest since the fourth quarter
of 1992, when productivity rose 6.2 percent and output grew 8.4 percent.

     Hourly compensation rose 3.5 percent in the fourth quarter, less rapidly
than it had in the previous five quarters.  When the increase in the CPI-U
was taken into account, real hourly compensation in the fourth quarter of
1998 grew 1.7 percent--also less than it had in recent quarters.

     Unit labor costs fell 1.1 percent in the fourth quarter after having
increased in the 10 previous quarters.  The implicit price deflator for
nonfarm business rose less in the fourth quarter, 0.1 percent, than it had
one quarter earlier, when it increased 0.7 percent.

Manufacturing

     Manufacturing productivity rose at a 5.2 percent seasonally adjusted
annual rate in the fourth quarter of 1998, reflecting a 4.7 percent increase
in output and a 0.5 percent drop in hours of all persons (table 3).  Growth
rates in productivity were dissimilar in the two manufacturing subsectors.
In durable goods, productivity increased 8.4 percent in the fourth quarter,
as output grew 8.5 percent and hours of all persons edged up 0.1 percent.  In
nondurable goods, output grew 0.1 percent and hours of all persons dropped
1.3 percent, resulting in a productivity increase of 1.4 percent (tables 4
and 5).

     Hourly compensation of all manufacturing workers rose 3.3 percent during
the fourth quarter.  When the increase in consumer prices was taken into
account, real hourly compensation in manufacturing rose 1.5 percent in the
fourth quarter, as it had in the third quarter of 1998.

     Unit labor costs in the manufacturing sector dropped 1.8 percent in the
fourth quarter of 1998, as labor productivity gains exceeded those in hourly
compensation.  In durable goods, unit labor costs fell 4.8 percent in the
fourth quarter, the third consecutive decline in these costs in this sector.
In nondurable goods industries, unit labor costs rose 1.9 percent in the
fourth quarter.  This was the smallest increase in unit labor costs in
nondurable goods since the third quarter of 1997, when they rose 1.3 percent.

                                      
                      ANNUAL AVERAGE CHANGES, 1997-1998

Business

     In calendar year 1998, business productivity increased 2.4 percent,
after having increased 1.5 percent in the previous year (table 1).  Output
grew 4.6 percent in both 1997 and 1998.  However, hours of all persons in the
business sector rose less in 1998, 2.2 percent, than they had in the previous
year, when they rose 3.1 percent.
     
     
-----------------------------------------------------------------------
Table B. Productivity and costs: Revised 1998 annual averages
(Seasonally adjusted annual rates)
-----------------------------------------------------------------------
                                                        Real      
                                              Hourly    hourly    Unit
                  Produc-                     compen-   compen-   labor
Sector            tivity     Output   Hours   sation    sation    costs
-----------------------------------------------------------------------
                   Percent change from previous year
Business             2.4       4.6     2.2      4.3       2.7      1.9
Nonfarm business     2.2       4.6     2.4      4.2       2.6      1.9
Manufacturing        4.2       4.1    -0.1      4.5       2.9      0.2
  Durable            6.8       7.0     0.2      4.1       2.5     -2.5
  Nondurable         1.2       0.6    -0.5      5.1       3.5      3.9
-----------------------------------------------------------------------

     
     Hourly compensation increased 4.3 percent in 1998, after having
increased 3.6 percent in 1997.  Real hourly compensation also increased in
both years--2.7 percent in 1998 and 1.2 percent in 1997.  1998 was the third
consecutive year of growth in this series, following three years of declining
real hourly compensation (1993-95).

     Unit labor costs increased 1.9 percent in 1998, slightly less than the
2.1-percent increase in the previous year.  The implicit price deflator rose
0.6 percent in 1998, down from the 1.7-percent increase posted in 1997.

Nonfarm business

     Productivity increased 2.2 percent in the nonfarm business sector during
1998, as output rose 4.6 percent and hours of all persons increased 2.4 per
cent.  In 1997, productivity rose 1.2 percent, output rose 4.5 percent, and
hours of all persons grew 3.2 percent.

     Hourly compensation grew 4.2 percent in 1998, more than the 3.5-percent
increases in both 1997 and 1996.  Moreover, because the increase in the CPI-U
was smaller in 1998 than in the previous year, the increase in real hourly
compensation in 1998, 2.6 percent, was considerably larger than the 1.2-
percent increase in 1997.  The 1998 increase in real hourly compensation was
the largest since a 3.2 percent rise in 1986.
     
     Unit labor costs in the nonfarm business sector grew 1.9 percent in
1998, slightly less than the 2.3-percent increase posted in 1997.  The
implicit price deflator, which reflects nonlabor payments as well as labor
costs, rose 0.7 percent in 1998, compared with 1.9 percent in 1997.
     
Manufacturing

     Manufacturing productivity grew 4.2 percent in 1998, continuing a trend
of annual increases that began in 1980.  Output in the manufacturing sector
increased 4.1 percent in 1998, and hours of all persons fell slightly, 0.1
percent.  Both output and labor productivity growth rates in 1998 were less
than in 1997, when productivity rose 4.9 percent, reflecting an output gain
of 6.5 percent and an increase in hours of all persons of 1.6 percent.
Trends in the durable and nondurable sectors differed.  In 1998, labor
productivity increased 6.8 percent in durable goods manufacturing, reflecting
a 7.0-percent output increase and hours growth of 0.2 percent.  This
productivity increase was the largest in durables since 1971, when
productivity rose 8.6 percent.  In nondurable goods manufacturing,
productivity rose 1.2 percent in 1998, as output rose 0.6 percent and hours
of all persons declined by 0.5 percent (tables B, 3, 4, and 5).

     Hourly compensation of manufacturing workers increased 4.5 percent in
1998, and real hourly compensation rose 2.9 percent.  The 1998 increase in
real hourly compensation was the largest since 1982, when it rose 3.3
percent.  Hourly compensation in durable goods rose 4.1 percent in 1998, and
real hourly compensation increased 2.5 percent.  In nondurable goods
industries, hourly compensation rose 5.1 percent, while real hourly
compensation grew 3.5 percent.

     Unit labor costs in the manufacturing sector grew by 0.2 percent last
year.  This was the first annual increase since 1993, when they grew by 0.7
percent.  Unit labor costs in durable goods industries fell 2.5 percent in
1998, and they rose 3.9 percent in nondurable goods.  In durable goods, unit
labor costs have fallen every year since 1991 (when they rose 4.0 percent).
     
                              REVISED MEASURES

     Productivity and cost data for the fourth quarter and full year 1998 for
business, nonfarm business, and manufacturing were revised to incorporate the
most recent information (table C).  In the business and nonfarm business
sectors, productivity and output measures for the fourth quarter are higher
and unit labor costs are lower than those reported on Feb. 9 based on
information available at that time.  Fourth-quarter measures of manufacturing
productivity and output were revised down from those reported last month;
unit labor costs are correspondingly higher.  Annual measures of productivity
and costs are similar to those reported on Feb. 9.  Quarterly series of real
hourly compensation in the business, nonfarm business, and manufacturing
sectors were revised back to the first quarter of 1994 to incorporate the
annual recalculation of seasonal factors for the Consumer Price Index.
     
     
-----------------------------------------------------------------------
Table C. Previous and revised productivity and related measures:
Fourth-quarter and annual averages, 1998
(Seasonally adjusted annual rates)
-----------------------------------------------------------------------
                                                      Real     
                                             Hourly   hourly   Unit
                   Produc-                   compen-  compen-  labor
Sector             tivity   Output  Hours    sation   sation   costs
-----------------------------------------------------------------------
             Percent change, third to fourth quarter 1998
Business:                                                      
  Previous          3.9      6.6     2.6      3.9      2.0      0.1
  Current           4.8      7.4     2.4      4.0      2.2     -0.8
Nonfarm business:                                              
  Previous          3.7      6.8     3.0      3.5      1.5     -0.2
  Current           4.6      7.5     2.8      3.5      1.7     -1.1
Manufacturing:                                                 
  Previous          5.6      5.1    -0.5      3.2      1.3     -2.2
  Current           5.2      4.7    -0.5      3.3      1.5     -1.8
-----------------------------------------------------------------------
                     Percent change, 1997 - 1998
Business:                                                      
  Previous          2.3      4.6     2.2      4.3      2.7      2.0
  Current           2.4      4.6     2.2      4.3      2.7      1.9
Nonfarm business:                                              
  Previous          2.2      4.6     2.4      4.2      2.6      2.0
  Current           2.2      4.6     2.4      4.2      2.6      1.9
Manufacturing:                                                 
  Previous          4.3      4.2    -0.1      4.5      2.9      0.2
  Current           4.2      4.1    -0.1      4.5      2.9      0.2
-----------------------------------------------------------------------

                                      
                              Next release date
                                      
     The next release of Productivity and Costs is scheduled for 10:00 AM
EDT, Tuesday, May 11, 1999, and will present preliminary first-quarter
measures for business, nonfarm business, and manufacturing.  Fourth-quarter
and annual data for nonfinancial corporations will be released at that time.


                                      
                               TECHNICAL NOTES
                                      
Labor Hours: Hours data for the labor productivity and costs 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.
Average weekly paid hours of nonproduction and supervisory workers are
estimated by the Office of Productivity and Technology.  Weekly paid hours
are adjusted to hours at work using the BLS Hours at Work survey, conducted
for this purpose.
     Data from the BLS Current Population Survey (CPS) are used for farm
labor; in the nonfarm sector, the National Income and Product Accounts (NIPA)
prepared by the Bureau of Economic Analysis (BEA) of the Department of
Commerce and the CPS are used to measure labor input for government
enterprises, proprietors, and unpaid family workers.

Output: Business sector output is an annual-weighted index constructed after
excluding from gross domestic product (GDP) the following outputs: General
government, nonprofit institutions, paid employees of private households, and
the rental value of owner-occupied dwellings. Corresponding exclusions also
are made in labor inputs. Business output accounted for about 76 percent of
the value of GDP in 1992. Nonfarm business, which also excludes farming,
accounted for about 75 percent of GDP in 1992.
     Annual manufacturing indexes are constructed by deflating current-dollar
industry value of production data from the U.S. Bureau of the Census with
deflators from the BEA.  These deflators are based on data from the BLS
producer price program and other sources.  The industry shipments are
aggregated using annual weights, and intrasector transactions are removed.
Quarterly manufacturing output measures are based on the index of industrial
production prepared monthly by the Board of Governors of the Federal Reserve
System adjusted to be consistent with annual indexes of manufacturing sector
output prepared by BLS.  Durables include the following 2-digit SIC
industries: Primary metal industries; fabricated metal products; non-
electrical machinery; industrial and commercial machinery and computer
equipment; electronic and other electrical equipment; transportation
equipment; instruments; lumber and lumber products; furniture and fixtures;
stone, clay, and glass and concrete products; and miscellaneous manufactures.
Nondurables include: Food and kindred products, tobacco products, textile
mill products, apparel products, paper and allied products, printing and
publishing, chemicals and chemical products, petroleum refining and related
industries, rubber and plastic products, and leather and leather products.
     Nonfinancial corporate output is an annual-weighted index constructed by
excluding from GDP the following outputs: General government; nonprofit
institutions; employees of private households; the rental value of owner-
occupied dwellings; unincorporated business; and those corporations which are
depository institutions, nondepository institutions, security and commodity
brokers, insurance carriers, regulated investment offices, small business
investment offices, and real estate investment trusts. Nonfinancial
corporations accounted for about 52 percent of the value of GDP in 1992.

Productivity: These productivity measures describe the relationship between
real output and the labor time involved in its production. They show the
changes from period to period in the amount of goods and services produced
per hour. Although these measures relate output to hours at work of all
persons engaged in a sector, they do not measure the specific contribution of
labor, capital, or any other factor of production. Rather, they reflect the
joint effects of many influences, including changes in technology; capital
investment; level of output; utilization of capacity, energy, and materials;
the organization of production; managerial skill; and the characteristics and
effort of the work force.

     Information in this release will be made available to sensory-impaired
individuals upon request. Voice phone: 202-606-STAT; TDD phone: 202-606-5897;
TDD message referral phone number: 1-800-326-2577.

Table 1. Business sector: Productivity, hourly compensation, unit labor costs, and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  1996       I     103.0      112.5     109.2     108.9        98.5      105.7       111.9      107.9
            II     103.8      114.2     110.0     110.4        98.9      106.3       112.1      108.4
           III     103.8      114.9     110.7     111.4        99.3      107.3       111.5      108.8
            IV     104.2      116.4     111.7     112.3        99.2      107.8       111.8      109.2

        ANNUAL     103.7      114.5     110.4     110.7        99.0      106.8       111.8      108.6

  1997       I     104.4      117.8     112.9     113.2        99.5      108.5       112.4      109.9
            II     104.8      119.1     113.6     113.9        99.8      108.7       113.2      110.3
           III     105.8      120.6     114.0     115.0       100.3      108.8       113.8      110.6
            IV     106.0      121.7     114.8     116.5      r101.1      109.9       112.4      110.8

        ANNUAL     105.2      119.8     113.8     114.7       100.3      109.0       112.9      110.4

  1998       I     107.1      123.7     115.6     117.9      r102.1      110.2       112.2      110.9
            II     107.1      124.3     116.1     119.1       102.7      111.2       110.5      111.0
           III     107.8      125.5     116.4     120.2       103.2      111.5       110.4      111.1
            IV    r109.1     r127.8    r117.1     121.4       103.7     r111.3      r110.9      111.2

        ANNUAL    r107.8      125.3     116.3     119.7       103.0      111.1      r111.0      111.0

  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1996       I       4.5        4.5       0.0       2.6       r-0.7       -1.8         8.5        1.9
            II       3.4        6.4       2.9       5.6        r1.9        2.1         0.9        1.7
           III       0.0        2.5       2.5       3.8        r1.5        3.8        -2.2        1.6
            IV       1.3        5.1       3.7       3.1       r-0.1        1.8         1.0        1.5

        ANNUAL       2.7        4.2       1.5       3.6         0.7        0.9         2.8        1.6

  1997       I       0.7        4.9       4.2       3.5        r1.0        2.8         2.1        2.5
            II       1.8        4.7       2.8       2.4        r1.2        0.6         2.8        1.4
           III       3.6        4.9       1.3       4.0         2.0        0.4         2.3        1.1
            IV       0.8        3.6       2.7       5.2        r3.3        4.4        -4.8        0.9

        ANNUAL       1.5        4.6       3.1       3.6         1.2        2.1         1.0        1.7

  1998       I       4.1        7.1       2.8       5.0        r3.9        0.8        -0.7        0.2
            II       0.1        1.7       1.6       4.1        r2.3        4.0        -6.0        0.3
           III       2.6        4.0       1.4       3.7        r2.0        1.0        -0.4        0.5
            IV      r4.8       r7.4      r2.4      r4.0        r2.2      r-0.8        r1.9       r0.2

        ANNUAL      r2.4        4.6       2.2       4.3         2.7       r1.9       r-1.7        0.6

  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1996       I       2.5        3.2       0.7       3.1         0.3        0.6         3.3        1.6
            II       3.1        4.7       1.6       3.7         0.8        0.6         3.4        1.6
           III       2.8        4.2       1.4       4.0         1.0        1.1         2.4        1.6
            IV       2.3        4.6       2.3       3.8         0.6        1.4         2.0        1.7

        ANNUAL       2.7        4.2       1.5       3.6         0.7        0.9         2.8        1.6

  1997       I       1.4        4.7       3.3       4.0        r1.0        2.6         0.5        1.8
            II       1.0        4.3       3.3       3.2         0.9        2.2         0.9        1.8
           III       1.8        4.9       3.0       3.3         1.0        1.4         2.0        1.6
            IV       1.7        4.5       2.8       3.8         1.9        2.0         0.6        1.5

        ANNUAL       1.5        4.6       3.1       3.6         1.2        2.1         1.0        1.7

  1998       I       2.6        5.1       2.4       4.1         2.6        1.5        -0.2        0.9
            II       2.1        4.3       2.1       4.6         2.9        2.4        -2.4        0.6
           III       1.9        4.1       2.1       4.5         2.9        2.5        -3.0        0.5
            IV      r2.9       r5.0       2.1       4.2         2.6       r1.2       r-1.3        0.3

        ANNUAL      r2.4        4.6       2.2       4.3         2.7       r1.9       r-1.7        0.6

  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       March 9, 1999
  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

  1996       I     103.1      112.8     109.4     108.7        98.3      105.4       112.3      107.9
            II     103.8      114.5     110.3     110.1        98.7      106.0       112.3      108.2
           III     103.8      115.2     111.0     111.0       r99.0      107.0       111.6      108.6
            IV     104.0      116.6     112.1     111.9        98.9      107.5       112.2      109.2

        ANNUAL     103.7      114.8     110.7     110.4        98.7      106.5       112.1      108.5

  1997       I     104.1      117.9     113.3     112.9        99.2      108.5       112.9      110.0
            II     104.5      119.2     114.1     113.6        99.5      108.7       113.7      110.4
           III     105.4      120.6     114.5     114.6        99.9      108.8       114.6      110.8
            IV     105.6      121.8     115.3     116.0      r100.7      109.8       113.3      111.1

        ANNUAL     104.9      119.9     114.3     114.3        99.9      108.9       113.6      110.6

  1998       I     106.6      123.9     116.3     117.4      r101.6      110.1       113.2      111.2
            II     106.6      124.4     116.7     118.5      r102.1      111.1       111.6      111.3
           III     107.3      125.6     117.1     119.7       102.7      111.5       111.4      111.5
            IV    r108.5     r127.9     117.9     120.7      r103.2     r111.2      r112.0     r111.5

        ANNUAL    r107.3     r125.5     117.0     119.1       102.5     r111.0       112.0      111.4

  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1996       I       4.2        4.2       0.0       2.7       r-0.6       -1.5         7.4        1.7
            II       3.0        6.4       3.3       5.2        r1.5        2.2        -0.1        1.3
           III      -0.1        2.5       2.6       3.6         1.2        3.7        -2.3        1.4
            IV       1.0        5.0       4.0       3.1       r-0.2        2.1         2.3        2.2

        ANNUAL       2.4        4.1       1.6       3.5         0.6        1.1         2.0        1.4

  1997       I       0.1        4.5       4.4       3.7        r1.1        3.5         2.3        3.1
            II       1.6        4.5       2.8       2.4        r1.2        0.7         2.8        1.5
           III       3.4        4.8       1.3       3.8         1.8        0.3         3.1        1.4
            IV       0.9        4.0       3.0       4.9        r3.0        4.0        -4.3        0.9

        ANNUAL       1.2        4.5       3.2       3.5         1.2        2.3         1.3        1.9

  1998       I       3.6        7.0       3.3       4.7        r3.7        1.1        -0.3        0.6
            II       0.3        1.7       1.4       4.1        r2.2        3.7        -5.7        0.2
           III       2.5        4.0       1.4       3.9        r2.3        1.4        -0.5        0.7
            IV      r4.6       r7.5      r2.8       3.5        r1.7      r-1.1        r2.2       r0.1

        ANNUAL       2.2        4.6       2.4       4.2         2.6       r1.9        -1.4        0.7

  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1996       I       2.4        3.2       0.8       3.0        r0.3        0.6         2.7        1.4
            II       2.9        4.7       1.7       3.6         0.7        0.7         2.3        1.3
           III       2.4        4.1       1.6       3.8         0.8        1.3         1.4        1.3
            IV       2.0        4.5       2.4       3.6         0.5        1.6         1.8        1.7

        ANNUAL       2.4        4.1       1.6       3.5         0.6        1.1         2.0        1.4

  1997       I       1.0        4.6       3.5       3.9         0.9        2.9         0.5        2.0
            II       0.7        4.1       3.4       3.2         0.8        2.5         1.3        2.0
           III       1.5        4.7       3.1       3.2         1.0        1.7         2.6        2.0
            IV       1.5        4.4       2.9       3.7         1.8        2.1         0.9        1.7

        ANNUAL       1.2        4.5       3.2       3.5         1.2        2.3         1.3        1.9

  1998       I       2.4        5.1       2.6       3.9         2.4        1.5         0.3        1.1
            II       2.0        4.4       2.3       4.4         2.7        2.3        -1.9        0.8
           III       1.8        4.1       2.3       4.4         2.8        2.6        -2.7        0.6
            IV      r2.7       r5.0      r2.2       4.0         2.5       r1.3       r-1.1       r0.4

        ANNUAL       2.2        4.6       2.4       4.2         2.6       r1.9        -1.4        0.7

  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       March 9, 1999
  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

  1996       I            111.9        114.8        102.6        109.2           98.8          97.6
            II            113.2        117.5        103.8        110.3           98.9          97.5
           III            114.7        119.3        104.1        111.2           99.1          97.0
            IV            115.5        120.4        104.2        111.9           98.9          96.9

        ANNUAL            113.8        118.0        103.7        110.7           99.0          97.2

  1997       I            116.7        122.5        105.0        113.1           99.4          97.0
            II            118.1        124.5        105.4        114.2          100.0          96.7
           III            120.7        126.8        105.1        115.7          100.9          95.9
            IV            121.9        129.1        105.9        118.0         r102.4          96.8

        ANNUAL            119.4        125.7        105.3        115.3          100.8          96.6

  1998       I            122.4        129.9        106.1        119.2          103.2          97.3
            II            123.6        130.7        105.7        119.9         r103.3          97.0
           III            125.0        130.8        104.6        120.9          103.7          96.7
            IV           r126.6       r132.3        104.5        121.8         r104.1         r96.2

        ANNUAL            124.4       r130.9        105.2        120.4          103.7          96.8

  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1996       I              4.2          0.8         -3.3         -0.2          r-3.4          -4.3
            II              4.5          9.6          4.9          4.1           r0.5          -0.4
           III              5.3          6.4          1.0          3.2           r0.9          -2.0
            IV              3.1          3.6          0.5          2.6          r-0.6          -0.4

        ANNUAL              4.1          3.7         -0.4          2.2           -0.8          -1.8

  1997       I              4.1          7.2          3.0          4.4           r1.8           0.4
            II              5.0          6.6          1.5          3.7           r2.4          -1.3
           III              9.0          7.7         -1.2          5.7            3.7          -3.1
            IV              4.3          7.5          3.1          8.0           r6.1           3.6

        ANNUAL              4.9          6.5          1.6          4.2            1.8          -0.7

  1998       I              1.6          2.4          0.8          4.0           r3.0           2.4
            II              3.9          2.5         -1.4          2.6           r0.8          -1.3
           III              4.7          0.4         -4.1          3.2           r1.5          -1.5
            IV             r5.2         r4.7         -0.5         r3.3           r1.5         r-1.8

        ANNUAL             r4.2         r4.1         -0.1          4.5            2.9           0.2

  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1996       I              3.7          1.3         -2.4          1.8           -0.9          -1.8
            II              3.7          3.6         -0.1          2.1           -0.7          -1.6
           III              4.4          4.8          0.4          2.2           -0.7          -2.1
            IV              4.3          5.0          0.7          2.4           -0.7          -1.8

        ANNUAL              4.1          3.7         -0.4          2.2           -0.8          -1.8

  1997       I              4.2          6.7          2.3          3.6           r0.6          -0.6
            II              4.4          5.9          1.5          3.5            1.1          -0.8
           III              5.3          6.3          1.0          4.1            1.8          -1.1
            IV              5.6          7.3          1.6          5.4            3.5          -0.1

        ANNUAL              4.9          6.5          1.6          4.2            1.8          -0.7

  1998       I              4.9          6.0          1.1          5.3            3.8           0.4
            II              4.7          5.0          0.3          5.1            3.4           0.4
           III              3.6          3.2         -0.4          4.4            2.8           0.8
            IV             r3.8         r2.5         -1.3         r3.3            1.7         r-0.6

        ANNUAL             r4.2         r4.1         -0.1          4.5            2.9           0.2

  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                March 9, 1999
  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

  1996       I            118.7        125.3        105.5        107.5           97.2          90.5
            II            120.9        129.9        107.4        108.5           97.2          89.8
           III            122.7        132.3        107.8        109.2           97.3          89.0
            IV            123.7        133.6        108.0        109.6          r96.9          88.6

        ANNUAL            121.5        130.2        107.2        108.7           97.2          89.5

  1997       I            125.1        136.9        109.4        110.7          r97.2          88.5
            II            127.5        140.3        110.1        111.6           97.8          87.6
           III            131.5        144.6        110.0        113.2           98.7          86.1
            IV            134.0        148.3        110.7        115.9          100.6          86.5

        ANNUAL            129.5        142.5        110.0        112.9           98.7          87.1

  1998       I            134.6        149.6        111.1        116.7         r101.0          86.7
            II            136.8        151.3        110.6        117.1         r100.9          85.6
           III            139.6        153.1        109.7        117.6          100.9          84.2
            IV           r142.5        156.2        109.7        118.5         r101.3          83.2

        ANNUAL            138.3       r152.6        110.3        117.5          101.1          84.9

  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1996       I              6.9          4.1         -2.7         -2.9          r-6.0          -9.2
            II              7.4         15.5          7.5          3.8           r0.2          -3.3
           III              6.2          7.7          1.4          2.7           r0.3          -3.3
            IV              3.3          3.9          0.6          1.5          r-1.7          -1.8

        ANNUAL              5.9          6.8          0.9          0.8           -2.1          -4.8

  1997       I              4.6         10.4          5.5          4.0           r1.5          -0.6
            II              7.9         10.4          2.3          3.5           r2.3          -4.1
           III             13.0         12.8         -0.2          5.5            3.5          -6.6
            IV              7.8         10.7          2.7         10.2           r8.2           2.2

        ANNUAL              6.6          9.4          2.7          3.9            1.5          -2.6

  1998       I              2.0          3.5          1.5          2.6           r1.6           0.6
            II              6.6          4.6         -1.8          1.5          r-0.3          -4.7
           III              8.5          4.8         -3.5          1.6          r-0.1          -6.4
            IV              8.4         r8.5         r0.1          3.2           r1.4          -4.8

        ANNUAL              6.8          7.0          0.2          4.1            2.5          -2.5

  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1996       I              4.9          3.7         -1.1          0.3           -2.4          -4.4
            II              6.0          7.5          1.5          0.7           -2.1          -5.0
           III              6.5          8.3          1.7          0.9           -2.0          -5.3
            IV              6.0          7.7          1.7          1.3          r-1.8          -4.4

        ANNUAL              5.9          6.8          0.9          0.8           -2.1          -4.8

  1997       I              5.4          9.3          3.7          3.0            0.1          -2.3
            II              5.5          8.1          2.4          2.9            0.6          -2.4
           III              7.2          9.3          2.0          3.6            1.4          -3.3
            IV              8.3         11.1          2.5          5.8           r3.9          -2.3

        ANNUAL              6.6          9.4          2.7          3.9            1.5          -2.6

  1998       I              7.6          9.3          1.5          5.4            3.9          -2.0
            II              7.3          7.8          0.5          4.9            3.2          -2.2
           III              6.2          5.9         -0.3          3.9            2.3          -2.1
            IV              6.3          5.3        r-0.9          2.2            0.7         r-3.9

        ANNUAL              6.8          7.0          0.2          4.1            2.5          -2.5

  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                March 9, 1999
  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

  1996       I            106.3        104.9         98.7        111.4         r100.7         104.8
            II            106.8        105.7         99.0        112.5          100.9         105.4
           III            108.0        107.0         99.1        113.7          101.3         105.3
            IV            108.7        107.9         99.2        114.9         r101.6         105.7

        ANNUAL            107.5        106.4         99.0        113.1          101.2         105.3

  1997       I            109.8        108.8         99.1        116.2          102.1         105.9
            II            110.2        109.3         99.2        117.3          102.7         106.4
           III            111.4        109.7         98.5        118.9          103.7         106.8
            IV            111.3        110.7         99.4        120.3         r104.4         108.0

        ANNUAL            110.7        109.6         99.1        118.2          103.3         106.8

  1998       I            111.7        111.0         99.4        122.1         r105.7         109.3
            II            111.9        111.0         99.2        123.5          106.4         110.4
           III            111.9        109.6         97.9        125.2          107.4         111.8
            IV           r112.3       r109.7         97.6       r126.2         r107.8        r112.3

        ANNUAL            112.0       r110.3         98.5        124.2          106.9        r111.0

  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1996       I              1.7         -2.5         -4.1          4.1           r0.8           2.3
            II              1.9          3.1          1.2          4.1           r0.5           2.3
           III              4.5          5.0          0.4          4.1           r1.7          -0.4
            IV              2.9          3.2          0.4          4.5           r1.2           1.5

        ANNUAL              2.5          0.3         -2.1          4.1            1.1           1.6

  1997       I              3.9          3.4         -0.5          4.6           r2.0           0.7
            II              1.5          1.9          0.4          3.8           r2.6           2.2
           III              4.3          1.7         -2.5          5.7            3.7           1.3
            IV             -0.1          3.6          3.7          4.6           r2.7           4.7

        ANNUAL              3.0          3.1          0.1          4.5            2.1           1.4

  1998       I              1.3          1.1         -0.2          6.3           r5.3           5.0
            II              0.6         -0.2         -0.8          4.4           r2.5           3.8
           III              0.3         -4.7         -5.0          5.7           r4.0           5.4
            IV             r1.4         r0.1        r-1.3         r3.3           r1.6          r1.9

        ANNUAL              1.2         r0.6         -0.5          5.1            3.5          r3.9

  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1996       I              2.8         -1.4         -4.1          4.0            1.2           1.2
            II              1.8         -0.6         -2.3          4.1            1.2           2.3
           III              2.5          1.0         -1.5          4.1            1.2           1.6
            IV              2.7          2.2         -0.6          4.2            1.0           1.4

        ANNUAL              2.5          0.3         -2.1          4.1            1.1           1.6

  1997       I              3.3          3.7          0.4          4.3           r1.3           1.0
            II              3.2          3.4          0.2          4.2            1.9           1.0
           III              3.1          2.6         -0.6          4.6            2.4           1.5
            IV              2.4          2.6          0.2          4.7           r2.8           2.2

        ANNUAL              3.0          3.1          0.1          4.5            2.1           1.4

  1998       I              1.7          2.1          0.3          5.1            3.6           3.3
            II              1.5          1.5          0.0          5.3            3.6           3.7
           III              0.5         -0.1         -0.6          5.2            3.6           4.7
            IV             r0.9        r-1.0         -1.8          4.9            3.3          r4.0

        ANNUAL              1.2         r0.6         -0.5          5.1            3.5          r3.9

  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                March 9, 1999
  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

  1996       I    106.4    117.3     110.2    107.7      97.4     101.2     98.7    100.6    153.7    105.4
            II    107.3    119.3     111.2    109.0      97.7     101.7     97.9    100.7    154.1    105.5
           III    108.0    120.9     111.9    110.1      98.1     101.9     97.5    100.8    155.3    105.7
            IV    108.6    122.5     112.8    110.8     r98.0     102.1     97.4    100.9    155.4    105.8

        ANNUAL    107.6    120.0     111.5    109.5      97.9     101.7     97.9    100.7    154.6    105.6

  1997       I    108.9    124.3     114.1    111.8      98.2     102.6     97.3    101.2    156.6    106.2
            II    109.6    126.2     115.2    112.5      98.5     102.6     97.1    101.2    157.3    106.3
           III    111.1    128.7     115.9    113.6      99.0     102.3     96.4    100.7    161.7    106.3
            IV    111.3    130.2     117.0    115.0     r99.8     103.3     95.7    101.3    155.7    106.3

        ANNUAL    110.3    127.3     115.4    113.3      99.0     102.7     96.6    101.1    157.8    106.3

  1998       I    112.1    132.1     117.9    116.0    r100.4     103.5     95.4    101.4    153.5    106.2
            II    112.9    133.4     118.1    117.3     101.1     103.9     95.5    101.7    150.4    106.1
           III    114.1    135.4     118.6    118.5     101.7     103.8     95.2    101.6    151.8    106.1
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  1996       I      1.3      1.4       0.1      1.7     r-1.6       0.4     -0.7      0.1     13.1      1.7
            II      3.3      6.9       3.5      5.0      r1.3       1.7     -2.9      0.5      1.1      0.6
           III      2.9      5.6       2.6      3.8      r1.5       0.9     -1.7      0.3      3.0      0.6
            IV      2.0      5.5       3.4      2.8      -0.5       0.7     -0.5      0.4      0.3      0.4

        ANNUAL      2.8      4.5       1.7      3.1       0.2       0.3     -1.1     -0.1      7.7      0.9

  1997       I      1.3      5.9       4.5      3.4      r0.8       2.0     -0.6      1.4      3.2      1.6
            II      2.3      6.3       3.9      2.5      r1.3       0.2     -0.6      0.0      1.7      0.2
           III      5.6      8.2       2.5      4.1       2.2      -1.3     -3.1     -1.8     11.8      0.0
            IV      1.0      4.8       3.8      5.0      r3.1       4.0     -2.7      2.3    -14.1     -0.1

        ANNUAL      2.5      6.1       3.6      3.5       1.1       1.0     -1.3      0.4      2.1      0.6

  1998       I      2.7      5.9       3.2      3.6      r2.6       0.9     -1.1      0.4     -5.6     -0.4
            II      3.1      4.0       0.9      4.6      r2.7       1.5      0.1      1.1     -7.7     -0.1
           III      4.4      6.1       1.7      4.0      r2.4      -0.3     -0.9     -0.4      3.6      0.1
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  1996       I      3.0      3.9       0.9      2.5     r-0.2      -0.4     -0.6     -0.5     11.5      0.9
            II      3.2      4.9       1.6      3.1       0.2      -0.1     -1.6     -0.5     11.1      0.9
           III      2.6      4.4       1.8      3.4      r0.5       0.8     -0.9      0.3      4.5      0.9
            IV      2.4      4.8       2.4      3.3       0.2       0.9     -1.4      0.3      4.3      0.8

        ANNUAL      2.8      4.5       1.7      3.1       0.2       0.3     -1.1     -0.1      7.7      0.9

  1997       I      2.4      5.9       3.5      3.7       0.8       1.3     -1.4      0.6      1.9      0.8
            II      2.1      5.8       3.6      3.1       0.8       1.0     -0.8      0.5      2.0      0.7
           III      2.8      6.4       3.5      3.2       1.0       0.4     -1.2      0.0      4.2      0.5
            IV      2.5      6.3       3.6      3.8      r1.9       1.2     -1.8      0.5      0.2      0.4

        ANNUAL      2.5      6.1       3.6      3.5       1.1       1.0     -1.3      0.4      2.1      0.6

  1998       I      2.9      6.3       3.3      3.8       2.3       0.9     -1.9      0.2     -2.0     -0.1
            II      3.1      5.7       2.6      4.3       2.7       1.2     -1.7      0.5     -4.3     -0.1
           III      2.8      5.2       2.4      4.3       2.7       1.5     -1.1      0.8     -6.2     -0.1
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        March 9, 1999
  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
-1.3 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 third quarter of 1998.



                            Footnotes, Tables 1-6

(1)  Wages and salaries of employees plus employers' contributions for social
     insurance and private benefit plans.  Except for nonfinancial
     corporations, where there are no self-employed, data also include an
     estimate of wages, salaries, and supplemental payments for the self-
     employed.

(2)  Compensation per hour adjusted for changes in the Consumer Price Index
     for All Urban Consumers.

(3)  Unit nonlabor payments include profits, capital consumption allowances,
     interest, rental income of persons, and indirect taxes.

(4)  Current dollar output divided by the output index.

(5)  Quarterly changes:  Percent change compounded at annual rate from the
     original data rather than index numbers.  Annual changes:  Percent
     change between annual average levels.

(6)  Unit nonlabor costs include capital consumption allowances, interest,
     rental income of persons, and indirect taxes.  For nonfinancial
     corporations, rental income of persons is zero by definition.

(7)  Total unit costs are the sum of unit labor and nonlabor costs.

(8)  Unit profits include corporate profits with inventory valuation and
     capital consumption adjustments.