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                           PRODUCTIVITY AND COSTS
                             Third Quarter 2002


   The Bureau of Labor Statistics of the U.S. Department of Labor today
reported preliminary productivity data--as measured by output per hour of all
persons--for the third quarter of 2002.  The preliminary seasonally-adjusted
annual rates of productivity growth in the third quarter were:

               4.3 percent in the business sector and
               4.0 percent in the nonfarm business sector.

Productivity increased 4.3 percent in the business sector, as output grew 4.1
percent and hours declined 0.1 percent.  The 4.0 percent increase in nonfarm
business productivity also reflected a 4.1 percent growth in output,  but a
0.1 percent rise in nonfarm business hours (table A).

   In manufacturing, productivity increases in the third quarter were:

               5.9 percent in manufacturing,
               8.8 percent in durable goods manufacturing, and
               2.0 percent in nondurable goods manufacturing.

   The increase in manufacturing productivity compares with a 4.2-percent
rise reported for the previous quarter (as revised).  Output and hours in
manufacturing, which includes about 16 percent of U.S. business sector
employment, tend to vary more from quarter to quarter than data for the more
aggregate business and nonfarm business sectors.  Third-quarter measures are
summarized in table A and appear in detail in tables 1 through 5.

   The data sources and methods used in the preparation of the manufacturing
series differ from those used in preparing the business and nonfarm business
series, and these measures are not directly comparable.  Output measures for
business and nonfarm business are based on measures of gross domestic product
prepared by the Bureau of Economic Analysis of the U.S. Department of
Commerce.  Quarterly output measures for manufacturing reflect 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.

-----------------------------------------------------------------------------
Effective  with  today's release, measures of hourly  compensation  and  unit
labor  costs  will be revised for the previous two quarters when  preliminary
estimates  for a new quarter are released.  Previously, only the most  recent
quarter  of  data  was revised.  For nonfinancial corporations,  measures  of
productivity  and  output  are  also subject  to  an  additional  quarter  of
revisions.
-----------------------------------------------------------------------------


------------------------------------------------------------------------
Table A. Productivity and costs: Preliminary third-quarter 2002
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           4.3       4.1      -0.1     5.2       3.2       0.9
 Nonfarm business   4.0       4.1       0.1     4.8       2.9       0.8
 Manufacturing      5.9       3.4      -2.4     4.5       2.6      -1.3
   Durable          8.8       4.5      -4.0     4.4       2.4      -4.1
   Nondurable       2.0       2.1       0.1     5.0       3.1       2.9
------------------------------------------------------------------------ 
                      Percent change from same quarter a year ago

 Business           5.5       3.5      -1.9     3.4       1.8      -1.9
 Nonfarm business   5.3       3.5      -1.7     3.3       1.7      -2.0
 Manufacturing      5.9       0.8      -4.8     3.6       2.0      -2.1
  Durable           7.5       1.2      -5.9     3.7       2.1      -3.5
  Nondurable        3.6       0.4      -3.1     3.6       2.0       0.0
------------------------------------------------------------------------

Business

   From the second quarter to the third quarter of 2002, business sector
productivity increased at a 4.3 percent annual rate.  Output increased 4.1
percent, while hours of all persons engaged in the sector declined 0.1
percent (seasonally adjusted annual rates).  After revisions, second-quarter
productivity in the business sector rose 1.8 percent, reflecting a 0.6-
percent rise in output and a 1.2-percent decline in hours (tables B and 1).
   
   Hourly compensation increased at an annual rate of 5.2 percent during the
third quarter of 2002.  Revised results show that hourly compensation
increased 4.2 percent in the second quarter and 3.0 percent in the first
quarter of 2002  (seasonally adjusted annual rates). This measure includes
wages and salaries, supplements, employer contributions to employee benefit
plans, and taxes.  Real hourly compensation, which takes into account changes
in consumer prices, increased 3.2 percent in the third quarter of 2002.

   Unit labor costs, which reflect changes in both hourly compensation and
productivity, increased at a 0.9-percent annual rate during the third
quarter.  These costs had increased 2.4 percent in the second quarter,
following a decrease of 4.9 percent in the first quarter of 2002 (as
revised).  The implicit price deflator for the business sector increased 0.6
percent during the third quarter of 2002, about the same as the 0.7 percent
increase in the previous quarter.

Nonfarm business

   Productivity in the nonfarm business sector grew at a 4.0-percent annual
rate during the third quarter of 2002.  This increase in output per hour
occurred as output increased 4.1 percent and hours of all persons edged up
0.1 percent (seasonally adjusted annual rates).  The small rise in hours
reflects a 0.6-percent increase in employment combined with a 0.5-percent
decline in average weekly hours at work.  Nonfarm business productivity rose
1.7 percent in the second quarter of 2002, as output rose 0.9 percent and
hours decreased 0.7 percent (table 2).

   Hourly compensation increased at a 4.8 percent annual rate in the third
quarter of 2002. When the rise in consumer prices is taken into account, real
hourly compensation rose at a 2.9-percent annual rate during the July-
September period.  During the second quarter of 2002, real hourly
compensation had risen 0.5 percent.
   
   Unit labor costs increased 0.8 percent during the third quarter of 2002.
In the second quarter, unit labor costs in the nonfarm business sector had
increased 2.2 percent.  The implicit price deflator for nonfarm business
output rose 0.2 percent in the third quarter of 2002.


Manufacturing

   Productivity increased 5.9 percent in manufacturing in the third quarter
of 2002, as output grew 3.4 percent and hours of all persons fell 2.4 percent
(seasonally adjusted annual rates).  A 4.2 percent increase in labor
productivity was recorded in the previous quarter, reflecting a 3.5-percent
increase in output and a 0.7-percent decline in hours.  Total manufacturing
output has increased in each of the last three quarters, after having fallen
in each of the six previous quarters.  In durable goods, productivity grew
8.8 percent in the third quarter as output increased 4.5 percent and hours of
all persons fell 4.0 percent.  Productivity increased 2.0 percent in
nondurable goods, as output rose 2.1 percent and hours of all persons
increased 0.1 percent (tables 3, 4, and 5).

   Hourly compensation of manufacturing workers increased an average of 4.5
percent during the third quarter, the largest increase in this series since
the third quarter of 2000, when it grew 9.5 percent (seasonally adjusted
annual rates).  Hourly compensation grew 4.4 percent in durable goods and 5.0
percent in nondurable goods in the third quarter of 2002.  When the increase
in consumer prices is taken into account, real hourly compensation in total
manufacturing rose 2.6 percent in the third quarter.

   Unit labor costs in manufacturing decreased 1.3 percent in the third
quarter of 2002.  This was the fifth consecutive quarterly decline in these
costs.  In the durable goods sector, unit labor costs in the third quarter
fell 4.1 percent.  Unit labor costs rose 2.9 percent in the nondurable goods
sector.


Revised Measures

   Current and previous measures for the first and second quarters of 2002
for the business, nonfarm business, and manufacturing sectors are compared in
table B.  In the business and nonfarm business sectors, growth in output and
productivity is slightly higher in the second quarter than reported on Sept.
5, based on information then available.  In the first quarter of 2002, growth
in hourly compensation in all of these sectors was revised down
substantially, which resulted in larger declines in unit labor costs.

----------------------------------------------------------------------
Table B. Previous and revised productivity and related measures
Quarterly percent change at seasonally adjusted annual rate
----------------------------------------------------------------------                                                               
                                                       Real      
                                              Hourly   hourly    Unit
                   Produc-                    compen-  compen-   labor
Sector             tivity    Output   Hours   sation   sation    costs
----------------------------------------------------------------------                                                                     
                             Second quarter 2002
Business:                                                        
  Previous          1.7       0.5      -1.2    4.0      0.5       2.3
  Current           1.8       0.6      -1.2    4.2      0.8       2.4
Nonfarm business:                                                
  Previous          1.5       0.8      -0.7    3.7      0.2       2.1
  Current           1.7       0.9      -0.7    3.9      0.5       2.2
Manufacturing:                                                   
  Previous          4.3       3.6      -0.7    3.0     -0.4      -1.2
  Current           4.2       3.5      -0.7    3.2     -0.2      -1.0

                             First quarter 2002
Business:                                                        
  Previous          8.3       5.9      -2.2    3.8      2.3      -4.2
  Current           8.3       5.9      -2.2    3.0      1.6      -4.9
Nonfarm business:                                                
  Previous          8.6       6.2      -2.2    3.6      2.2      -4.6
  Current           8.6       6.2      -2.2    2.9      1.4      -5.3
Manufacturing:                                                   
  Previous          9.7       3.0      -6.1    6.9      5.4      -2.6
  Current           9.7       3.0      -6.1    3.8      2.4      -5.3
----------------------------------------------------------------------

Revised measures: Nonfinancial Corporations
   
   Productivity and cost measures for nonfinancial corporations for the
first and second quarters of 2002 also were revised to incorporate more
recent information than was available on Sept. 5.
   
   Productivity and output in this sector were revised up for the second
quarter of 2002.  Productivity grew at an annual rate of 5.9 percent,
compared with the increase of 5.0 percent published Sept. 5.  Hourly
compensation was revised up much less than output per hour, so unit labor
costs fell more, 1.3 percent, than the 0.8-percent decline reported at that
time.  Unit profits rose 0.9 percent in the second quarter of 2002 compared
with the preliminary estimate of a 3.7- percent drop.  Nonfinancial corporate
output, productivity, and hourly compensation grew less during the first
quarter of 2002 than reported Sept. 5.  Because hourly compensation was
revised down more than productivity, unit labor costs were revised down as
well (tables C and 6).
   
-----------------------------------------------------------------------------   
Table C.  Nonfinancial corporations: Previous and revised productivity and
cost measures
Quarterly percent changes at seasonally adjusted annual rates
-----------------------------------------------------------------------------                                                                     
                                             Real                    
                                    Hourly   hourly  Unit            Implicit
            Produc-                 compen-  compen- labor  Unit     price
            tivity   Output  Hours  sation   sation  costs  profits  deflator
-----------------------------------------------------------------------------                                                                     
                            Second quarter 2002

Previous     5.0      4.4     -0.6    4.2      0.8     -0.8   -3.7     -0.4
Current      5.9      5.3     -0.5    4.4      1.0     -1.3    0.9     -0.4
                              
                              First quarter 2002

Previous     5.1      3.7     -1.3    4.1      2.6     -0.9   -0.6     -0.8
Current      4.6      3.3     -1.3    3.4      2.0     -1.1   -0.1     -0.8
-----------------------------------------------------------------------------
                                      
                                      
                              Next release date
   
   The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Wednesday, Dec. 4, 2002.  Third-quarter measures for nonfinancial
corporations and revised third-quarter measures for business, nonfarm
business, and manufacturing will be released at that time.



                                      
                               TECHNICAL NOTES
                                      
Labor  Hours: Hours data for the labor productivity and cost measures include
hours for all persons working in the sector-wage and salary workers, the self-
employed,  and  unpaid  family  workers.  The primary  source  of  hours  and
employment data is the BLS Current Employment Statistics (CES) program, which
provides  monthly survey data on the number of jobs held by wage  and  salary
workers in nonfarm establishments.  The CES also provides average weekly paid
hours of production and nonsupervisory workers in these establishments.   The
Office of Productivity and Technology estimates average weekly paid hours  of
nonproduction  and supervisory workers.  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 77 percent  of
the  value  of  GDP  in 1996. Nonfarm business, which also excludes  farming,
accounted for about 76 percent of GDP in 1996.
      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 2-digit SIC industries: Primary  metal
industries;  fabricated metal products; nonelectrical  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 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; 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 53 percent of the value of GDP in 1996.

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: 202-691-5200; 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

  2000       I     115.3      138.4     120.1     131.4       110.5      114.0       110.7      112.8
            II     117.2      140.3     119.7     132.4       110.5      113.0       114.1      113.4
           III     117.3      140.4     119.7     135.0       111.7      115.1       111.2      113.7
            IV     117.9      140.7     119.4     136.3       111.9      115.6       112.0      114.3

        ANNUAL     116.9      140.0     119.7     133.8       111.2      114.4       112.0      113.5

  2001       I     117.5      140.4     119.5     137.3       111.8      116.9       112.3      115.2
            II     117.4      139.4     118.7     137.5       111.0      117.1       113.6      115.8
           III     117.9      139.1     117.9     137.8       111.1      116.8       115.5      116.4
            IV     120.1      140.3     116.8     138.3       111.6      115.1       117.2      115.9

        ANNUAL     118.2      139.8     118.2     137.7       111.4      116.5       114.7      115.8

  2002       I     122.5      142.3     116.1    r139.3      r112.0     r113.7      r119.9      116.0
            II    r123.1      142.5     115.8    r140.8      r112.2     r114.4      r119.3     r116.2
           III     124.4      144.0     115.7     142.5       113.1      114.6       119.4      116.4
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2000       I       0.3        2.2       1.9      14.7        10.3       14.4       -15.1        2.4
            II       6.7        5.4      -1.2       3.0         0.0       -3.5        12.9        2.2
           III       0.4        0.4       0.0       8.3         4.6        7.8        -9.6        1.1
            IV       2.1        0.9      -1.2       3.7         0.7        1.6         2.6        1.9

        ANNUAL       3.0        4.1       1.0       6.8         3.4        3.7        -1.7        1.7

  2001       I      -1.5       -1.0       0.4       3.1        -0.6        4.7         1.1        3.4
            II      -0.2       -2.8      -2.6       0.5        -2.6        0.7         4.9        2.2
           III       1.8       -0.9      -2.6       0.9         0.2       -0.9         6.8        1.8
            IV       7.6        3.5      -3.9       1.4         1.7       -5.8         6.1       -1.6

        ANNUAL       1.1       -0.2      -1.3       2.9         0.2        1.8         2.4        2.0

  2002       I       8.3        5.9      -2.2      r3.0        r1.6      r-4.9        r9.6        0.3
            II      r1.8       r0.6      -1.2      r4.2        r0.8       r2.4       r-2.0       r0.7
           III       4.3        4.1      -0.1       5.2         3.2        0.9         0.2        0.6
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2000       I       2.3        4.6       2.3       5.9         2.5        3.5        -2.0        1.4
            II       4.1        5.4       1.3       6.5         3.1        2.3         0.8        1.7
           III       3.3        4.1       0.7       7.7         4.1        4.3        -2.5        1.7
            IV       2.4        2.2      -0.1       7.3         3.8        4.9        -2.9        1.9

        ANNUAL       3.0        4.1       1.0       6.8         3.4        3.7        -1.7        1.7

  2001       I       1.9        1.4      -0.5       4.5         1.2        2.6         1.4        2.2
            II       0.2       -0.7      -0.9       3.9         0.5        3.6        -0.4        2.1
           III       0.5       -1.0      -1.5       2.0        -0.6        1.5         3.8        2.3
            IV       1.9       -0.3      -2.2       1.5        -0.3       -0.4         4.7        1.4

        ANNUAL       1.1       -0.2      -1.3       2.9         0.2        1.8         2.4        2.0

  2002       I       4.3        1.4      -2.8      r1.4        r0.2      r-2.8        r6.8        0.7
            II       4.8       r2.3      -2.5      r2.4        r1.1      r-2.4        r5.0        0.3
           III       5.5        3.5      -1.9       3.4         1.8       -1.9         3.3        0.0
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 7, 2002
  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

  2000       I     114.7      138.7     120.9     130.8       110.0      114.0       112.3      113.4
            II     116.4      140.5     120.7     131.5       109.8      113.0       115.6      113.9
           III     116.6      140.6     120.6     134.3       111.1      115.2       112.8      114.3
            IV     117.1      141.0     120.4     135.3       111.2      115.6       113.4      114.8

        ANNUAL     116.2      140.2     120.6     133.0       110.6      114.4       113.5      114.1

  2001       I     116.7      140.7     120.6     136.3       110.9      116.8       113.8      115.7
            II     116.6      139.7     119.8     136.3       110.1      116.9       115.3      116.3
           III     117.2      139.4     118.9     136.7       110.2      116.6       117.2      116.8
            IV     119.3      140.4     117.7     137.2       110.7      115.0       119.2      116.5

        ANNUAL     117.5      140.1     119.2     136.6       110.5      116.3       116.4      116.3

  2002       I     121.8      142.5     117.0    r138.2      r111.1     r113.4      r121.7      116.4
            II     122.3     r142.9     116.8    r139.5      r111.2     r114.0      r121.7      116.8
           III     123.5      144.3     116.8     141.1       112.0      114.3       121.5      116.9
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2000       I       0.2        1.9       1.7      15.2        10.7       14.9       -15.3        2.7
            II       6.0        5.4      -0.6       2.2        -0.7       -3.6        12.2        1.9
           III       0.6        0.2      -0.4       8.7         4.9        8.0        -9.1        1.4
            IV       1.7        1.1      -0.6       3.1         0.2        1.4         2.1        1.6

        ANNUAL       2.9        4.0       1.0       7.0         3.5        3.9        -1.7        1.8

  2001       I      -1.5       -0.9       0.5       2.8        -0.9        4.3         1.5        3.3
            II      -0.1       -2.7      -2.6       0.1        -2.9        0.3         5.1        2.0
           III       2.1       -0.8      -2.9       1.0         0.3       -1.1         6.8        1.7
            IV       7.3        2.9      -4.1       1.5         1.8       -5.4         6.9       -1.0

        ANNUAL       1.1       -0.1      -1.2       2.7        -0.1        1.6         2.5        1.9

  2002       I       8.6        6.2      -2.2      r2.9        r1.4      r-5.3        r8.8       -0.2
            II      r1.7       r0.9      -0.7      r3.9        r0.5       r2.2        r0.1       r1.4
           III       4.0        4.1       0.1       4.8         2.9        0.8        -0.7        0.2
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2000       I       2.3        4.5       2.1       6.2         2.8        3.7        -1.8        1.7
            II       4.0        5.4       1.3       6.6         3.2        2.5         0.7        1.8
           III       3.3        3.9       0.6       7.9         4.3        4.5        -2.6        1.8
            IV       2.1        2.2       0.0       7.2         3.7        4.9        -3.1        1.9

        ANNUAL       2.9        4.0       1.0       7.0         3.5        3.9        -1.7        1.8

  2001       I       1.7        1.4      -0.3       4.2         0.9        2.4         1.4        2.1
            II       0.2       -0.6      -0.8       3.6         0.3        3.5        -0.3        2.1
           III       0.5       -0.8      -1.4       1.8        -0.8        1.2         3.9        2.2
            IV       1.9       -0.4      -2.3       1.4        -0.4       -0.5         5.1        1.5

        ANNUAL       1.1       -0.1      -1.2       2.7        -0.1        1.6         2.5        1.9

  2002       I       4.4        1.3      -2.9      r1.4        r0.1      r-2.9        r6.9        0.6
            II      r4.9       r2.3      -2.5      r2.3        r1.0      r-2.4        r5.6       r0.5
           III       5.3        3.5      -1.7       3.3         1.7       -2.0         3.7        0.1
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 7, 2002
  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

  2000       I            133.6        138.3        103.5        131.4          110.5          98.4
            II            134.9        139.8        103.6        129.3          107.9          95.9
           III            135.4        139.3        102.9        132.2          109.4          97.7
            IV            135.9        137.6        101.3        131.5          108.0          96.7

        ANNUAL            134.9        138.7        102.8        131.1          109.0          97.2

  2001       I            135.4        135.1         99.8        132.0          107.4          97.5
            II            135.4        133.0         98.2        133.0          107.4          98.2
           III            136.4        131.3         96.3        133.3          107.5          97.8
            IV            137.6        129.2         93.9        134.3          108.3          97.6

        ANNUAL            136.2        132.1         97.1        133.1          107.7          97.8

  2002       I            140.9        130.2         92.4       r135.6         r109.0         r96.2
            II            142.3        131.3         92.3       r136.6         r108.9         r96.0
           III            144.4        132.4         91.7        138.1          109.6          95.7
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2000       I              4.5          2.7         -1.7         25.3           20.5          19.9
            II              3.8          4.4          0.5         -6.3           -9.0          -9.7
           III              1.6         -1.3         -2.8          9.5            5.8           7.8
            IV              1.6         -4.8         -6.3         -2.3           -5.1          -3.8

        ANNUAL              4.1          2.5         -1.5          7.4            3.9           3.2

  2001       I             -1.5         -7.1         -5.6          1.6           -2.1           3.1
            II              0.0         -6.2         -6.2          3.1           -0.1           3.1
           III              2.9         -4.9         -7.6          1.0            0.3          -1.9
            IV              3.8         -6.3         -9.7          2.9            3.2          -0.9

        ANNUAL              0.9         -4.8         -5.6          1.5           -1.2           0.6

  2002       I              9.7          3.0         -6.1         r3.8           r2.4         r-5.3
            II             r4.2         r3.5         -0.7         r3.2          r-0.2         r-1.0
           III              5.9          3.4         -2.4          4.5            2.6          -1.3
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2000       I              4.4          3.6         -0.8          8.9            5.5           4.3
            II              4.7          3.8         -0.8          6.9            3.5           2.1
           III              4.3          2.6         -1.7          7.9            4.3           3.4
            IV              2.9          0.2         -2.6          5.9            2.4           2.9

        ANNUAL              4.1          2.5         -1.5          7.4            3.9           3.2

  2001       I              1.3         -2.3         -3.6          0.5           -2.7          -0.9
            II              0.4         -4.9         -5.2          2.9           -0.5           2.5
           III              0.7         -5.7         -6.4          0.8           -1.8           0.1
            IV              1.3         -6.1         -7.3          2.1            0.3           0.8

        ANNUAL              0.9         -4.8         -5.6          1.5           -1.2           0.6

  2002       I              4.0         -3.7         -7.4         r2.7           r1.4         r-1.3
            II             r5.1        r-1.3         -6.1         r2.7           r1.4         r-2.3
           III              5.9          0.8         -4.8          3.6            2.0          -2.1
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 7, 2002
  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

  2000       I            148.6        162.9        109.7        130.8          109.9          88.0
            II            150.0        165.2        110.2        127.5          106.4          85.0
           III            150.3        164.6        109.5        130.6          108.0          86.9
            IV            150.1        162.0        107.9        128.4          105.5          85.5

        ANNUAL            149.7        163.7        109.3        129.3          107.5          86.4

  2001       I            149.0        157.9        106.0        129.4          105.3          86.8
            II            149.1        155.3        104.1        130.5          105.4          87.5
           III            150.1        152.2        101.4        130.2          105.0          86.7
            IV            150.9        148.6         98.5        131.8          106.3          87.3

        ANNUAL            149.8        153.5        102.5        130.4          105.5          87.1

  2002       I            155.7        150.3         96.5       r132.7         r106.7         r85.2
            II            158.0        152.3         96.4       r133.6         r106.5         r84.6
           III            161.4        154.0         95.4        135.0          107.2          83.7
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2000       I              7.6          6.3         -1.2         29.7           24.6          20.5
            II              3.9          5.8          1.8         -9.6          -12.1         -13.0
           III              0.8         -1.6         -2.3          9.9            6.1           9.1
            IV             -0.6         -6.2         -5.7         -6.5           -9.2          -6.0

        ANNUAL              4.4          3.6         -0.7          7.7            4.2           3.2

  2001       I             -3.0         -9.7         -6.9          3.1           -0.6           6.2
            II              0.4         -6.5         -6.9          3.6            0.4           3.2
           III              2.7         -7.6        -10.0         -1.0           -1.7          -3.6
            IV              2.3         -9.2        -11.2          5.0            5.4           2.7

        ANNUAL              0.0         -6.2         -6.2          0.9           -1.9           0.8

  2002       I             13.2          4.7         -7.5         r2.8           r1.3         r-9.2
            II              6.0          5.4        r-0.5          2.8           -0.6         r-3.0
           III              8.8          4.5         -4.0          4.4            2.4          -4.1
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2000       I              5.2          5.1         -0.1         10.5            7.0           5.0
            II              5.1          5.3          0.2          7.4            4.0           2.2
           III              4.3          3.2         -1.1          8.1            4.5           3.6
            IV              2.9          1.0         -1.9          4.8            1.4           1.8

        ANNUAL              4.4          3.6         -0.7          7.7            4.2           3.2

  2001       I              0.3         -3.1         -3.3         -1.1           -4.2          -1.3
            II             -0.6         -6.0         -5.5          2.3           -1.0           3.0
           III             -0.1         -7.5         -7.4         -0.3           -2.8          -0.2
            IV              0.6         -8.2         -8.8          2.6            0.8           2.1

        ANNUAL              0.0         -6.2         -6.2          0.9           -1.9           0.8

  2002       I              4.5         -4.8         -8.9         r2.6           r1.3         r-1.9
            II             r5.9         -1.9         -7.4         r2.4           r1.1         r-3.4
           III              7.5          1.2         -5.9          3.7            2.1          -3.5
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 7, 2002
  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

  2000       I            120.6        114.9         95.3        130.6          109.8         108.3
            II            121.8        115.6         95.0        130.4          108.9         107.1
           III            122.6        115.4         94.1        133.2          110.2         108.7
            IV            123.9        114.5         92.4        135.0          110.9         108.9

        ANNUAL            122.2        115.1         94.2        132.3          110.0         108.3

  2001       I            123.9        113.4         91.6        134.7          109.7         108.7
            II            123.6        111.7         90.4        135.5          109.4         109.6
           III            124.4        111.3         89.5        137.2          110.6         110.3
            IV            125.9        110.5         87.8        137.1          110.6         108.9

        ANNUAL            124.4        111.7         89.8        136.1          110.1         109.4

  2002       I            127.5        110.8         86.9        139.1          111.8         109.1
            II            128.3       r111.2        r86.7       r140.4         r112.0        r109.5
           III            128.9        111.8         86.7        142.1          112.8         110.3
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2000       I              0.8         -1.8         -2.5         17.8           13.3          17.0
            II              3.8          2.4         -1.4         -0.5           -3.4          -4.2
           III              2.6         -0.9         -3.5          8.7            4.9           5.9
            IV              4.6         -3.0         -7.2          5.6            2.5           0.9

        ANNUAL              3.8          1.1         -2.6          6.7            3.3           2.9

  2001       I             -0.1         -3.7         -3.6         -0.8           -4.4          -0.7
            II             -0.9         -5.9         -5.0          2.3           -0.8           3.2
           III              2.5         -1.5         -3.8          5.1            4.4           2.5
            IV              4.9         -2.9         -7.4         -0.3            0.0          -5.0

        ANNUAL              1.8         -2.9         -4.7          2.9            0.1           1.0

  2002       I              5.3          1.2         -3.9         r6.0           r4.5          r0.6
            II             r2.4         r1.5        r-0.9         r3.9           r0.5          r1.5
           III              2.0          2.1          0.1          5.0            3.1           2.9
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2000       I              3.4          1.6         -1.8          6.1            2.8           2.6
            II              4.4          1.8         -2.5          5.8            2.5           1.4
           III              4.4          1.7         -2.5          7.4            3.8           2.9
            IV              2.9         -0.8         -3.7          7.7            4.2           4.6

        ANNUAL              3.8          1.1         -2.6          6.7            3.3           2.9

  2001       I              2.7         -1.3         -3.9          3.1           -0.1           0.4
            II              1.5         -3.4         -4.8          3.9            0.5           2.3
           III              1.5         -3.5         -4.9          3.0            0.4           1.5
            IV              1.6         -3.5         -5.0          1.5           -0.3           0.0

        ANNUAL              1.8         -2.9         -4.7          2.9            0.1           1.0

  2002       I              2.9         -2.3         -5.0          3.2            2.0           0.3
            II             r3.7        r-0.4         -4.0         r3.6           r2.3         r-0.1
           III              3.6          0.4         -3.1          3.6            2.0           0.0
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 7, 2002
  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

  2000       I    116.7    146.0     125.1    126.9     106.7     108.7    105.4    107.8    120.5    108.9
            II    116.8    146.0     125.0    127.8     106.6     109.4    107.7    108.9    120.4    109.9
           III    117.6    146.9     125.0    130.4     107.9     110.9    108.9    110.4    111.4    110.5
            IV    117.3    146.4     124.8    131.7     108.2     112.2    111.0    111.9    100.4    110.9

        ANNUAL    117.1    146.3     125.0    129.2     107.4     110.3    108.3    109.8    113.2    110.0

  2001       I    116.6    145.2     124.6    131.3     106.9     112.6    113.7    112.9     94.9    111.4
            II    117.3    145.1     123.7    131.9     106.5     112.5    115.6    113.3     97.2    112.0
           III    118.2    145.0     122.7    132.7     107.0     112.3    117.6    113.7     99.7    112.5
            IV    121.3    146.9     121.2    133.6     107.8     110.2    116.2    111.8    109.6    111.6

        ANNUAL    118.3    145.6     123.0    132.4     107.0     111.9    115.8    112.9    100.3    111.9

  2002       I   r122.6   r148.1     120.8   r134.7    r108.3    r109.8   r116.1   r111.5   r109.5    111.4
            II   r124.4   r150.0     120.6   r136.2    r108.6    r109.5   r116.6   r111.4   r109.8    111.3
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2000       I      5.3      7.6       2.3     14.2       9.8       8.5      1.3      6.5    -17.6      3.9
            II      0.3     -0.2      -0.4      2.8      -0.1       2.6      8.9      4.2     -0.5      3.8
           III      2.6      2.6       0.0      8.5       4.7       5.7      4.5      5.4    -26.8      2.0
            IV     -0.7     -1.3      -0.5      4.1       1.1       4.9      7.8      5.6    -33.9      1.7

        ANNUAL      2.1      3.7       1.5      6.7       3.2       4.4      4.6      4.5    -14.1      2.5

  2001       I     -2.6     -3.2      -0.7     -1.2      -4.8       1.4     10.1      3.6    -20.2      1.6
            II      2.3     -0.4      -2.7      1.8      -1.3      -0.5      7.1      1.5     10.0      2.1
           III      3.2     -0.3      -3.4      2.5       1.9      -0.7      7.2      1.5     10.7      2.1
            IV     10.8      5.4      -4.8      2.7       3.0      -7.3     -5.0     -6.7     46.0     -3.3

        ANNUAL      1.0     -0.5      -1.5      2.5      -0.3       1.4      6.9      2.9    -11.3      1.7

  2002       I     r4.6     r3.3      -1.3     r3.4      r2.0     r-1.1    r-0.2    r-0.9    r-0.1     -0.8
            II     r5.9     r5.3     r-0.5     r4.4      r1.0     r-1.3     r1.7    r-0.5     r0.9     -0.4
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  2000       I      2.1      4.8       2.6      5.6       2.3       3.4      3.8      3.5    -12.1      1.8
            II      2.1      4.0       1.9      6.2       2.8       4.0      5.0      4.3    -11.2      2.6
           III      2.6      3.8       1.2      7.6       4.0       4.9      4.1      4.7    -12.9      2.9
            IV      1.8      2.1       0.3      7.3       3.8       5.4      5.6      5.4    -20.6      2.8

        ANNUAL      2.1      3.7       1.5      6.7       3.2       4.4      4.6      4.5    -14.1      2.5

  2001       I     -0.1     -0.5      -0.4      3.5       0.2       3.6      7.8      4.7    -21.3      2.3
            II      0.4     -0.6      -1.0      3.2      -0.1       2.8      7.3      4.0    -19.3      1.9
           III      0.5     -1.3      -1.8      1.8      -0.8       1.2      8.0      3.1    -10.5      1.9
            IV      3.3      0.3      -2.9      1.4      -0.4      -1.8      4.7     -0.1      9.1      0.6

        ANNUAL      1.0     -0.5      -1.5      2.5      -0.3       1.4      6.9      2.9    -11.3      1.7

  2002       I     r5.2     r2.0      -3.1     r2.6      r1.4     r-2.5     r2.1     -1.2    r15.4      0.0
            II     r6.1     r3.4      -2.5     r3.3      r1.9     r-2.7     r0.8    r-1.7    r13.0     -0.6
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        November 7, 2002
  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
-1.5 and +1.7 index points approximately 95 percent of the time.  This
interval is based on the performance of this measure between the fourth
quarter of 1995 and the second quarter of 2002.



                            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 1978-2001 is based on the
     Consumer Price Index research series (CPI-U-RS).

(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.