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                                         THURSDAY, DECEMBER 4, 1997.
                       


                           PRODUCTIVITY AND COSTS
                             Third Quarter 1997


     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised productivity data--as measured by output per hour of all
persons--for the third quarter of 1997.  The seasonally-adjusted annual rates
of productivity growth in the third quarter were:

               4.0 percent in the business sector, and
               4.1 percent in the nonfarm business sector.

The third-quarter increase in labor productivity in the nonfarm business
sector was the largest since the fourth quarter of 1992.

     In manufacturing, revised productivity increases in the third quarter
were:
               9.3 percent in manufacturing,
              13.1 percent in durable goods manufacturing, and
               5.2 percent in nondurable goods manufacturing.

   The third-quarter productivity increase in manufacturing occurred as
output rose at a 7.2 percent rate and hours of all persons working in the
sector fell 1.9 percent.  Output and hours in manufacturing, which includes
about 18 percent of U.S. business sector employment, tend to vary more from
quarter to quarter than data for the more aggregate business and nonfarm
business sectors.  Third-quarter measures are summarized in table A and
appear in detail in tables 1 through 5.
   
   The data sources and methods used in the preparation of the manufacturing
series differ from those used in preparing the business and nonfarm business
series, and these measures are not directly comparable.  Output measures for
business and nonfarm business are based on measures of gross domestic product
prepared by the Bureau of Economic Analysis of the U.S. Department of
Commerce.  Quarterly output measures for manufacturing reflect indexes of
industrial production independently prepared by the Board of Governors of the
Federal Reserve System.  See Technical Notes for further information on data
sources.
   
   
------------------------------------------------------------------------
Table A. Productivity and costs: Revised third-quarter 1997 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            4.0       3.8      -0.2     4.3       2.3       0.3
Nonfarm business    4.1       4.0      -0.1     3.9       1.9      -0.2
Manufacturing       9.3       7.2      -1.9     3.4       1.4      -5.4
  Durable          13.1      12.1      -0.9     2.4       0.4      -9.5
  Nondurable        5.2       1.6      -3.4     5.0       2.9      -0.2
------------------------------------------------------------------------
                      Percent change from same quarter a year ago
Business            2.5       4.8       2.2     3.8       1.6       1.3
Nonfarm business    2.4       4.7       2.2     3.8       1.5       1.3
Manufacturing       4.6       5.2       0.6     3.1       0.9      -1.4
  Durable           5.8       7.6       1.7     2.4       0.2      -3.2
  Nondurable        3.3       2.4      -0.9     4.0       1.8       0.7
------------------------------------------------------------------------


Business

     From the second quarter to the third quarter of 1997, business sector
productivity rose 4.0 percent as output increased 3.8 percent but hours of
all persons engaged in the sector fell off slightly, 0.2 percent (seasonally
adjusted annual rates).  Employment in the business sector rose in the third
quarter by 0.9 percent, but this increase was offset by a 1.0 percent decline
in average weekly hours at work.  In the second quarter, productivity had
risen 2.4 percent, reflecting increases in output and hours of all persons of
3.9 and 1.5 percent, respectively (table 1).

     Hourly compensation increased 4.3 percent during the third quarter of
1997; it had increased 3.3 percent one quarter earlier.  This measure
includes wages and salaries, supplements, employer contributions to employee
benefit plans, and taxes.  Unit labor costs in both the second and third
quarters rose modestly--0.3 percent in the third quarter and 0.9 percent in
the second quarter.

     Real hourly compensation, which takes into account changes in the
Consumer Price Index for All Urban Consumers (CPI-U), rose 2.3 percent in the
third quarter and 2.2 percent in the second quarter of 1997.

     The implicit price deflator for the business sector, which reflects
changes in both unit labor costs and unit nonlabor payments, increased at a
1.1 percent annual rate in the third quarter of 1997, somewhat less than the
1.5 percent increase posted in the previous quarter.


Nonfarm business

     Productivity increased 4.1 percent in the nonfarm business sector during
the third quarter of 1997 as output rose 4.0 percent and hours of all persons
declined 0.1 percent.  As in the larger business sector, an employment
increase, 1.0 percent, was more than offset by a decline in average weekly
hours at work, 1.1 percent.  During the second quarter of 1997, productivity
in the nonfarm business sector had increased 2.4 percent, reflecting a gain
of 3.8 percent in output and a 1.4 percent rise in hours (table 2).

     Hourly compensation increased at a 3.9 percent annual rate in the third
quarter, compared with a 3.3 percent increase one quarter earlier.  When the
rise in the CPI-U is taken into account, real hourly compensation rose at a
1.9 percent annual rate in the third quarter, following a 2.2 percent rise
during the second quarter of the year.

   Unit labor costs fell slightly, 0.2 percent, in the third quarter of 1997
after having risen 0.9 percent in the second quarter.  The implicit price
deflator rose 1.2 percent in the third quarter of 1997.  This reflects both
the decrease in unit labor costs and a 3.7 percent rise in unit nonlabor
payments; labor costs account for approximately 64 percent of nonfarm
business payments.  In the second quarter, the implicit price deflator for
the nonfarm business sector had risen 1.4 percent.


Manufacturing

     Productivity increased 9.3 percent in manufacturing in the third quarter
of 1997, as output rose 7.2 percent and hours of all persons fell 1.9 percent
(seasonally adjusted annual rates).  This increase in labor productivity was
the largest in the manufacturing sector since the second quarter of 1982, when
it rose 12.5 percent.  In the second quarter of 1997, productivity rose 2.8
percent, reflecting an output increase of 3.9 percent and an increase in hours
of 1.1 percent.  In durable goods industries, productivity grew 13.1 percent
in the third quarter as output rose 12.1 percent and hours fell 0.9 percent.
In the nondurable goods industries, third-quarter productivity grew 5.2
percent as output rose 1.6 percent and hours dropped 3.4 percent (tables 3, 4,
and 5).

     Hourly compensation of all manufacturing workers rose 3.4 percent during
the third quarter, compared with an increase of 2.6 percent during the second
quarter (seasonally adjusted annual rates).  When the increase in the CPI-U
is taken into account, real hourly compensation increased 1.4 percent in the
third quarter and 1.5 percent one quarter earlier.  In durable goods
manufacturing, hourly compensation rose 2.4 percent during the third quarter
of 1997, and real hourly compensation rose 0.4 percent.  The increases in
nondurable goods manufacturing were higher--hourly compensation rose 5.0
percent and real hourly compensation rose 2.9 percent.

     Because the large increase in labor productivity more than offset the
rise in hourly compensation in the manufacturing sector, unit labor costs
fell at a 5.4 percent annual rate in the third quarter of 1997.  This decline
was the largest recorded in the manufacturing sector since a 5.5 percent drop
in the second quarter of 1963.  Unit labor costs fell in both durable and
nondurable goods manufacturing in the third quarter of 1997.  Unit labor
costs fell 9.5 percent in durable goods industries and declined 0.2 percent
in nondurable goods industries.  In the second quarter, unit labor costs in
manufacturing fell 0.2 percent.
   

---------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Third-quarter 1997 productivity and
cost measures
(Seasonally adjusted annual rates)
---------------------------------------------------------------------------                                                                  
                                           Real                    
                                  Hourly   hourly  Unit            Implicit
          Produc-                 compen-  compen- labor  Unit     price
Period    tivity   Output  Hours  sation   sation  costs  profits  deflator
---------------------------------------------------------------------------                                                                  
                  Percent change from preceding quarter
1997 III   6.7      7.9     1.1    4.5      2.4    -2.1    14.1      0.1
---------------------------------------------------------------------------
                  Percent change from same quarter a year ago
1997 III   3.3      6.0     2.6    3.8      1.5     0.5     5.4      0.7
---------------------------------------------------------------------------


Nonfinancial Corporations

    Third-quarter 1997 measures of productivity and costs also were
announced for nonfinancial corporations (tables B and 6).  Output per all-
employee hour rose at a 6.7 percent annual rate, the largest increase since
the first quarter of 1986 when it increased 9.6 percent.  In the second
quarter of 1997, output per hour of all employees had increased 2.5 percent.
Output increased 7.9 percent in the third quarter of 1997, while hours of all
employees increased 1.1 percent.  The sector includes all corporations doing
business in the United States, except those classified as depository
institutions, nondepository institutions, security and commodity brokers,
insurance carriers, regulated investment offices, small business investment
offices, and real estate investment trusts.
   
   Hourly compensation increased 4.5 percent in the third quarter; it had
risen 3.3 percent in the second quarter.  When the rise in the CPI-U is taken
into account, real hourly compensation increased 2.4 percent in the third
quarter and 2.2 percent one quarter earlier.

   Both unit labor costs and unit nonlabor costs fell during the third
quarter of 1997 after posting modest gains in the previous quarter.  Unit
labor costs for nonfinancial corporations dropped 2.1 percent in the third
quarter, after increasing 0.8 percent during the second quarter.  Unit
nonlabor costs fell 1.7 percent in the third quarter; they had risen 0.5
percent one quarter earlier.  Unit profits advanced at a 14.1 percent annual
rate, much faster than the 3.2 percent rise in the second quarter of 1997.
The implicit price deflator for the output of nonfinancial corporations rose
only 0.1 percent in the third quarter of 1997.  In the second quarter, the
implicit price deflator had risen 1.1 percent.


---------------------------------------------------------------------
Table C. Previous and revised productivity and related measures
Quarterly percent change at seasonally adjusted annual rate
---------------------------------------------------------------------                                                          
                                                     Real      
                                            Hourly   hourly    Unit
                   Produc-                  compen-  compen-   labor
Sector             tivity   Output   Hours  sation   sation    costs
---------------------------------------------------------------------                                                               
                             Third quarter 1997
Business:                                                      
  Previous          4.4      4.2     -0.2    4.6      2.5       0.2
  Current           4.0      3.8     -0.2    4.3      2.3       0.3
Nonfarm business:                                              
  Previous          4.5      4.3     -0.1    4.2      2.1      -0.3
  Current           4.1      4.0     -0.1    3.9      1.9      -0.2
Manufacturing:                                                 
  Previous          9.8      7.9     -1.7    3.6      1.5      -5.7
  Current           9.3      7.2     -1.9    3.4      1.4      -5.4
---------------------------------------------------------------------


Revised Measures

   Current and previous measures for the third quarter of 1997 for the
business, nonfarm business, and manufacturing sectors are compared in table C.
Productivity, output, and hourly compensation increases are smaller than
those reported on Nov. 13, based on the information available at that time.


                              Next release date

     The next release of Productivity and Costs is scheduled for 10:00 AM
EST, Tuesday, February 10, 1998.  Preliminary fourth-quarter and annual 1997
measures will be released at that time.  The release also will contain
historical revisions to hours in all sectors due to incorporation of the 1996
Hours at Work Survey and to output in the manufacturing sectors due to
incorporation of revised measures of Industrial Production from the Federal
Reserve Board of Governors.

     Scheduled release dates for productivity and costs measures for major
sectors of the U.S. economy in 1998 are:

     -----------------------------------------------------
     Reference period                    1998 release date

     1997:
     Fourth quarter, Annual              February 10
     Fourth quarter, Annual (revised)    March 10
     1998:                               
     First quarter                       May 7
     First quarter (revised)             June 4
     Second quarter                      August 11
     Second quarter (revised)            September 3
     Third quarter                       November 10
     Third quarter (revised)             December 3
     -----------------------------------------------------     
          

     These dates are based on presently available schedules for the release
of underlying source data in 1998.  Each issue of Productivity and Costs
contains a "Next release date" paragraph which readers should use to confirm
the dates above.
                                TECHNICAL NOTES
                                      
                                      
                                      
 Labor  Hours:  The primary source of hours and employment  data  is  the  BLS
 Current  Employment Statistics (CES) program, which provides  monthly  survey
 data on total employment and average weekly paid hours of production and non-
 supervisory  workers  in  nonagricultural establishments.  Jobs  rather  than
 persons  are counted. Weekly paid hours are adjusted to hours at  work  using
 the BLS Hours at Work survey, conducted for this purpose.
       Data  from  the BLS Current Population Survey (CPS) are used  for  farm
 labor; in the nonfarm sector, the National Income and Product Accounts (NIPA)
 prepared  by the Bureau of Economic Analysis (BEA) of the Department  of Com-
 merce and the CPS are used to measure labor input for government enterprises,
 proprietors, and unpaid family workers.
 
 Output: Business sector output is an annual-weighted index constructed  after
 excluding  from  gross domestic product (GDP) the following outputs:  General
 government, nonprofit institutions, paid employees of private households, and
 the  rental value of owner-occupied dwellings. Corresponding exclusions  also
 are  made in labor inputs. Business output accounted for about 76 percent  of
 the  value  of  GDP  in 1992. Nonfarm business, which also excludes  farming,
 accounted for about 75 percent of GDP in 1992.
      Annual manufacturing indexes are constructed by deflating current-dollar
 industry  value  of production data from the U.S. Bureau of the  Census  with
 deflators  from  the BEA.  These deflators are based on  data  from  the  BLS
 producer  price  program  and  other sources.   The  industry  shipments  are
 aggregated  using annual weights, and intrasector transactions  are  removed.
 Quarterly  manufacturing output measures are based on the index of industrial
 production prepared monthly by the Board of Governors of the Federal  Reserve
 System  adjusted to be consistent with annual indexes of manufacturing sector
 output  prepared  by  BLS.   Durables  include  the  following  2-digit   SIC
 industries:   Primary  metal  industries;  fabricated  metal  products;  non-
 electrical  machinery;  industrial  and  commercial  machinery  and  computer
 equipment;   electronic   and  other  electrical  equipment;   transportation
 equipment;  instruments; lumber and lumber products; furniture and  fixtures;
 stone, clay, and glass and concrete products; and miscellaneous manufactures.
 Nondurables  include:  Food and kindred products, tobacco  products,  textile
 mill  products,  apparel  products, paper and allied products,  printing  and
 publishing,  chemicals and chemical products, petroleum refining and  related
 industries, rubber and plastic products, and leather and leather products.
      Nonfinancial corporate output is an annual-weighted index constructed by
 excluding  from  GDP  the  following outputs: General  government;  nonprofit
 institutions; employees of private households; the rental value  of owner-oc-
 cupied  dwellings; unincorporated business; and those corporations which  are
 depository  institutions, nondepository institutions, security and  commodity
 brokers,  insurance  carriers, regulated investment offices,  small  business
 investment   offices,   and  real  estate  investment  trusts.   Nonfinancial
 corporations accounted for about 52 percent of the value of GDP in 1992.
 
 Productivity:  These productivity measures describe the relationship  between
 real  output  and the labor time involved in its production.  They  show  the
 changes  from  period to period in the amount of goods and services  produced
 per  hour.  Although these measures relate output to hours  at  work  of  all
 persons engaged in a sector, they do not measure the specific contribution of
 labor,  capital, or any other factor of production. Rather, they reflect  the
 joint  effects  of many influences, including changes in technology;  capital
 investment; level of output; utilization of capacity, energy, and  materials;
 the organization of production; managerial skill; and the characteristics and
 effort of the work force.
 
       Information  in this release will be made available to sensory-impaired
 individuals upon request. Voice phone: 202-606-STAT; TDD phone: 202-606-5897;
 TDD message referral phone number: 1-800-326-2577.
 
 

  Table 1. Business sector:   Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  1995       I     100.2      108.7     108.5     105.8        98.3      105.6       108.3      106.5
            II     100.4      108.7     108.3     106.6        98.3      106.1       108.4      107.0
           III     100.6      109.8     109.2     107.3        98.4      106.7       108.8      107.4
            IV     101.1      110.7     109.5     108.1        98.6      107.0       109.2      107.8

        ANNUAL     100.5      109.5     108.9     106.9        98.4      106.3       108.7      107.2

  1996       I     101.6      111.4     109.6     108.9        98.4      107.1       110.6      108.4
            II     102.3      113.2     110.7     110.1        98.8      107.7       111.1      108.9
           III     102.0      113.5     111.3     111.0        98.9      108.8       110.8      109.6
            IV     102.5      115.0     112.2     111.9        98.9      109.2       111.4      110.0

        ANNUAL     102.0      113.3     111.0     110.4        98.7      108.2       111.0      109.2

  1997       I     102.9      116.6     113.3     113.1        99.4      109.9       111.8      110.6
            II     103.5      117.8     113.7     114.0        99.9      110.1       112.5      111.0
           III     104.6     r118.9     113.7    r115.2       100.5      110.2       113.2      111.3
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1995       I      -2.1        0.8       2.9       2.6        -0.2        4.8        -0.2        2.9
            II       0.9        0.2      -0.7       3.2         0.1        2.3         0.4        1.6
           III       0.7        4.2       3.5       2.6         0.5        1.9         1.4        1.7
            IV       2.0        3.0       1.0       3.2         0.7        1.2         1.5        1.3

        ANNUAL       0.0        2.3       2.4       2.5        -0.3        2.6         1.7        2.3

  1996       I       2.2        2.8       0.6       2.7        -0.6        0.5         5.3        2.3
            II       2.5        6.6       4.0       4.7         1.3        2.2         1.9        2.1
           III      -1.1        0.9       2.0       3.3         0.6        4.4        -1.0        2.4
            IV       1.9        5.4       3.4       3.3        -0.1        1.4         2.2        1.7

        ANNUAL       1.5        3.5       2.0       3.3         0.3        1.8         2.2        1.9

  1997       I       1.8        5.9       4.0       4.4         1.9        2.5         1.1        2.0
            II       2.4        3.9       1.5       3.3         2.2        0.9         2.7        1.5
           III      r4.0       r3.8      -0.2      r4.3        r2.3       r0.3        r2.5       r1.1
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1995       I      -0.5        3.3       3.8       1.7        -1.2        2.2         3.2        2.6
            II      -0.3        1.7       2.1       2.5        -0.5        2.8         1.7        2.4
           III       0.0        2.4       2.3       2.7         0.1        2.7         1.3        2.2
            IV       0.4        2.0       1.7       2.9         0.3        2.5         0.8        1.9

        ANNUAL       0.0        2.3       2.4       2.5        -0.3        2.6         1.7        2.3

  1996       I       1.4        2.5       1.1       2.9         0.2        1.5         2.1        1.7
            II       1.8        4.2       2.3       3.3         0.5        1.5         2.5        1.8
           III       1.4        3.3       1.9       3.5         0.5        2.1         1.9        2.0
            IV       1.4        3.9       2.5       3.5         0.3        2.1         2.1        2.1

        ANNUAL       1.5        3.5       2.0       3.3         0.3        1.8         2.2        1.9

  1997       I       1.3        4.7       3.4       3.9         0.9        2.6         1.1        2.0
            II       1.3        4.0       2.7       3.5         1.2        2.3         1.2        1.9
           III      r2.5        4.8       2.2      r3.8         1.6       r1.3         2.1       r1.6
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       December 4, 1997 
  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

  1995       I     100.3      108.9     108.5     105.6        98.2      105.3       109.5      106.8
            II     100.5      108.9     108.4     106.4        98.1      105.8       109.6      107.2
           III     100.8      110.2     109.3     107.1        98.3      106.3       109.7      107.5
            IV     101.2      111.0     109.7     107.9        98.4      106.6       109.8      107.8

        ANNUAL     100.7      109.8     109.0     106.7        98.3      106.0       109.7      107.3

  1996       I     101.7      111.7     109.8     108.7        98.3      106.9       111.1      108.4
            II     102.2      113.5     111.0     109.8        98.5      107.4       111.4      108.8
           III     102.0      113.8     111.6     110.6        98.6      108.5       111.0      109.4
            IV     102.4      115.3     112.6     111.5        98.5      108.9       111.6      109.8

        ANNUAL     102.0      113.6     111.3     110.1        98.4      107.9       111.3      109.1

  1997       I     102.8      116.9     113.8     112.8        99.1      109.7       111.9      110.5
            II     103.4      118.0     114.2     113.7        99.6      110.0       112.5      110.9
           III    r104.4     r119.2     114.1    r114.8       100.1      109.9       113.5      111.2
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1995       I      -1.6        1.2       2.9       2.6        -0.2        4.2         1.3        3.1
            II       0.8        0.2      -0.6       3.1        -0.1        2.3         0.2        1.5
           III       1.1        4.6       3.5       2.7         0.6        1.6         0.5        1.2
            IV       1.6        3.0       1.4       2.9         0.5        1.3         0.3        1.0

        ANNUAL       0.2        2.6       2.4       2.5        -0.3        2.4         2.1        2.3

  1996       I       1.9        2.6       0.6       2.8        -0.5        0.9         4.8        2.3
            II       2.2        6.8       4.4       4.4         1.0        2.1         1.1        1.7
           III      -1.0        1.0       2.1       2.9         0.2        3.9        -1.3        2.0
            IV       1.8        5.4       3.6       3.3        -0.1        1.5         2.0        1.7

        ANNUAL       1.3        3.5       2.2       3.1         0.2        1.8         1.5        1.7

  1997       I       1.4        5.6       4.2       4.5         2.1        3.1         1.0        2.4
            II       2.4        3.8       1.4       3.3         2.2        0.9         2.3        1.4
           III      r4.1       r4.0      -0.1      r3.9        r1.9      r-0.2        r3.7       r1.2
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1995       I      -0.2        3.5       3.7       1.8        -1.1        2.0         4.3        2.8
            II      -0.2        1.9       2.1       2.4        -0.6        2.6         2.4        2.6
           III       0.4        2.7       2.3       2.8         0.1        2.4         1.5        2.1
            IV       0.4        2.2       1.8       2.8         0.2        2.4         0.6        1.7

        ANNUAL       0.2        2.6       2.4       2.5        -0.3        2.4         2.1        2.3

  1996       I       1.3        2.6       1.2       2.9         0.1        1.5         1.4        1.5
            II       1.7        4.2       2.5       3.2         0.4        1.5         1.7        1.6
           III       1.2        3.3       2.1       3.3         0.3        2.1         1.2        1.7
            IV       1.2        3.9       2.7       3.3         0.2        2.1         1.6        1.9

        ANNUAL       1.3        3.5       2.2       3.1         0.2        1.8         1.5        1.7

  1997       I       1.1        4.7       3.6       3.8         0.8        2.7         0.7        1.9
            II       1.1        4.0       2.8       3.5         1.1        2.4         1.0        1.9
           III      r2.4       r4.7      r2.2       3.8        r1.5        1.3        r2.3       r1.7
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       December 4, 1997
  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

  1995       I            106.7        112.3        105.2        107.2           99.6         100.5
            II            107.6        111.9        104.0        108.2           99.8         100.5
           III            108.8        112.7        103.6        109.2          100.2         100.4
            IV            109.2        113.0        103.4        110.1          100.4         100.8

        ANNUAL            108.1        112.5        104.1        108.7          100.1         100.6

  1996       I            110.3        113.3        102.7        110.8          100.2         100.4
            II            111.0        115.0        103.7        112.1          100.5         101.0
           III            112.4        116.4        103.6        112.9          100.6         100.4
            IV            113.5        117.7        103.7        113.5          100.3         100.0

        ANNUAL            111.7        115.6        103.5        112.2          100.3         100.5

  1997       I            114.2        119.2        104.4        114.7          100.8         100.4
            II            115.0        120.4        104.7        115.4          101.1         100.4
           III           r117.6       r122.5        104.2       r116.4          101.5         r99.0
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1995       I              3.8          4.4          0.6          2.1           -0.6          -1.6
            II              3.5         -1.2         -4.5          3.8            0.7           0.3
           III              4.3          2.7         -1.5          3.9            1.7          -0.4
            IV              1.7          1.0         -0.7          3.2            0.7           1.4

        ANNUAL              3.2          3.5          0.3          2.9            0.1          -0.3

  1996       I              4.0          1.1         -2.7          2.5           -0.8          -1.4
            II              2.4          6.3          3.8          4.7            1.3           2.2
           III              5.5          5.0         -0.5          3.2            0.5          -2.2
            IV              3.7          4.3          0.6          1.9           -1.4          -1.7

        ANNUAL              3.3          2.8         -0.5          3.2            0.2          -0.1

  1997       I              2.5          5.4          2.8          4.4            2.0           1.8
            II              2.8          3.9          1.1          2.6            1.5          -0.2
           III             r9.3         r7.2        r-1.9         r3.4           r1.4         r-5.4
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1995       I              2.9          5.7          2.8          2.0           -0.9          -0.9
            II              2.7          3.5          0.9          2.8           -0.2           0.1
           III              3.4          3.1         -0.3          3.1            0.5          -0.3
            IV              3.3          1.7         -1.6          3.3            0.6          -0.1

        ANNUAL              3.2          3.5          0.3          2.9            0.1          -0.3

  1996       I              3.4          0.9         -2.4          3.3            0.6           0.0
            II              3.1          2.8         -0.3          3.6            0.7           0.5
           III              3.4          3.3         -0.1          3.4            0.4           0.0
            IV              3.9          4.1          0.3          3.1           -0.1          -0.8

        ANNUAL              3.3          2.8         -0.5          3.2            0.2          -0.1

  1997       I              3.5          5.2          1.7          3.5            0.6           0.0
            II              3.6          4.7          1.0          3.0            0.6          -0.6
           III             r4.6         r5.2         r0.6          3.1            0.9         r-1.4
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 4, 1997
  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

  1995       I            110.8        118.4        106.9        107.1           99.5          96.7
            II            111.3        118.0        106.0        107.9           99.5          96.9
           III            112.8        119.5        106.0        108.8           99.8          96.4
            IV            113.5        120.5        106.2        109.3           99.7          96.4

        ANNUAL            112.1        119.1        106.3        108.2           99.7          96.6

  1996       I            115.1        121.6        105.6        109.8           99.3          95.3
            II            116.3        124.7        107.2        111.1           99.6          95.5
           III            118.0        126.5        107.2        111.8           99.6          94.7
            IV            118.7        127.4        107.4        111.9           98.9          94.3

        ANNUAL            116.9        125.0        107.0        111.0           99.2          95.0

  1997       I            119.5        129.9        108.7        113.2           99.5          94.7
            II            121.1        132.3        109.2        113.8           99.7          93.9
           III           r124.9       r136.1        109.0        114.5          r99.8          91.6
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1995       I              5.7          6.7          0.9          2.3           -0.4          -3.2
            II              2.1         -1.4         -3.4          3.0           -0.1           1.0
           III              5.4          5.3         -0.1          3.4            1.2          -1.9
            IV              2.4          3.4          0.9          2.1           -0.3          -0.3

        ANNUAL              4.0          5.3          1.3          2.6           -0.2          -1.3

  1996       I              6.0          3.7         -2.2          1.6           -1.7          -4.2
            II              4.0         10.3          6.1          4.8            1.4           0.8
           III              6.2          6.0         -0.2          2.7            0.0          -3.4
            IV              2.1          2.8          0.7          0.5           -2.7          -1.6

        ANNUAL              4.3          5.0          0.7          2.5           -0.4          -1.7

  1997       I              3.0          8.3          5.2          4.7            2.3           1.7
            II              5.5          7.4          1.8          2.0            0.9          -3.3
           III            r13.1        r12.1        r-0.9         r2.4           r0.4         r-9.5
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1995       I              4.1          8.0          3.7          1.7           -1.1          -2.3
            II              3.4          5.4          1.9          2.5           -0.6          -0.9
           III              3.9          4.7          0.7          2.8            0.2          -1.1
            IV              3.9          3.4         -0.4          2.7            0.1          -1.1

        ANNUAL              4.0          5.3          1.3          2.6           -0.2          -1.3

  1996       I              4.0          2.7         -1.2          2.5           -0.2          -1.4
            II              4.4          5.6          1.2          3.0            0.1          -1.4
           III              4.6          5.8          1.1          2.8           -0.2          -1.8
            IV              4.6          5.7          1.1          2.4           -0.8          -2.1

        ANNUAL              4.3          5.0          0.7          2.5           -0.4          -1.7

  1997       I              3.8          6.8          2.9          3.2            0.2          -0.6
            II              4.2          6.1          1.9          2.5            0.1          -1.7
           III             r5.8         r7.6          1.7         r2.4           r0.2          -3.2
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 4, 1997
  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

  1995       I            102.9        105.9        103.0        107.0           99.5         104.1
            II            104.1        105.6        101.4        108.3           99.9         104.0
           III            105.0        105.5        100.5        109.5          100.4         104.3
            IV            105.3        105.0         99.7        110.7          100.9         105.1

        ANNUAL            104.4        105.5        101.1        108.9          100.3         104.4

  1996       I            105.8        104.5         98.8        111.7          101.1         105.7
            II            106.0        104.9         99.0        112.8          101.2         106.4
           III            107.2        105.9         98.7        113.9          101.5         106.3
            IV            108.7        107.4         98.8        115.1          101.8         106.0

        ANNUAL            106.8        105.7         99.0        113.3          101.3         106.1

  1997       I            109.4        108.0         98.7        116.1          102.0         106.1
            II            109.4        108.0         98.7        117.1          102.6         107.1
           III           r110.8       r108.4         97.9        118.5          103.3        r107.0
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1995       I              1.3          1.4          0.1          1.7           -1.0           0.5
            II              5.1         -1.3         -6.0          4.7            1.6          -0.3
           III              3.3         -0.4         -3.5          4.4            2.3           1.1
            IV              1.2         -1.8         -3.0          4.6            2.1           3.3

        ANNUAL              2.3          1.2         -1.1          3.2            0.4           0.9

  1996       I              1.7         -1.9         -3.5          3.8            0.5           2.1
            II              1.0          1.6          0.5          4.0            0.6           2.9
           III              4.6          3.7         -0.9          3.9            1.2          -0.6
            IV              5.5          5.9          0.4          4.3            0.9          -1.1

        ANNUAL              2.3          0.2         -2.1          4.0            1.0           1.7

  1997       I              2.7          2.1         -0.6          3.4            1.0           0.7
            II              0.0          0.0          0.0          3.4            2.3           3.5
           III             r5.2         r1.6        r-3.4          5.0            2.9         r-0.2
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1995       I              1.6          3.2          1.6          2.1           -0.7           0.5
            II              1.8          1.3         -0.5          3.0            0.0           1.2
           III              2.8          1.0         -1.8          3.4            0.7           0.5
            IV              2.7         -0.5         -3.1          3.9            1.2           1.1

        ANNUAL              2.3          1.2         -1.1          3.2            0.4           0.9

  1996       I              2.8         -1.3         -4.0          4.4            1.6           1.5
            II              1.8         -0.6         -2.4          4.2            1.3           2.4
           III              2.1          0.4         -1.7          4.1            1.1           1.9
            IV              3.2          2.3         -0.9          4.0            0.8           0.8

        ANNUAL              2.3          0.2         -2.1          4.0            1.0           1.7

  1997       I              3.4          3.3         -0.1          3.9            0.9           0.5
            II              3.2          2.9         -0.3          3.8            1.4           0.6
           III             r3.3         r2.4        r-0.9          4.0            1.8          r0.7
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 4, 1997
  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

  1995       I    103.0    112.3     109.1    105.2      97.8     102.2     99.8    101.6    135.2    104.6
            II    103.5    112.9     109.1    106.0      97.7     102.4    100.1    101.8    134.9    104.8
           III    104.7    114.9     109.7    106.6      97.8     101.9     99.0    101.1    145.5    105.1
            IV    105.2    115.9     110.2    107.3      97.8     102.0     99.1    101.2    147.3    105.4

        ANNUAL    104.1    114.0     109.5    106.3      97.9     102.1     99.5    101.4    140.8    105.0

  1996       I    105.6    116.5     110.4    107.8      97.5     102.1     99.2    101.4    152.5    106.0
            II    106.4    118.7     111.5    109.0      97.8     102.4     98.4    101.4    154.7    106.2
           III    107.0    120.0     112.1    109.9      97.9     102.7     98.1    101.5    156.0    106.4
            IV    107.6    121.5     113.0    110.7      97.8     102.9     97.4    101.5    156.4    106.5

        ANNUAL    106.6    119.2     111.8    109.4      97.8     102.6     98.3    101.4    154.9    106.3

  1997       I    108.1    123.3     114.1    111.9      98.3     103.5     97.0    101.8    157.9    106.9
            II    108.7    124.7     114.7    112.8      98.8     103.7     97.1    102.0    159.1    107.2
           III    110.5    127.1     115.0    114.1      99.4     103.2     96.7    101.5    164.4    107.2
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  1995       I     -3.1      0.0       3.2      2.4      -0.4       5.6      2.8      4.9    -18.1      1.8
            II      1.9      2.0       0.1      3.0      -0.1       1.0      1.0      1.0     -0.8      0.8
           III      4.8      7.2       2.3      2.5       0.4      -2.2     -4.2     -2.7     35.4      1.3
            IV      2.1      3.8       1.7      2.5       0.1       0.4      0.4      0.4      4.9      1.0

        ANNUAL      0.8      3.7       2.9      2.3      -0.5       1.5     -0.2      1.1      4.7      1.5

  1996       I      1.3      2.0       0.7      2.0      -1.2       0.7      0.6      0.7     15.0      2.4
            II      3.3      7.6       4.2      4.4       1.0       1.1     -3.1      0.0      5.8      0.7
           III      2.3      4.3       2.0      3.4       0.7       1.1     -1.4      0.5      3.5      0.9
            IV      2.0      5.2       3.2      2.9      -0.4       0.9     -2.8      0.0      1.0      0.1

        ANNUAL      2.4      4.5       2.1      2.9      -0.1       0.4     -1.2      0.0     10.0      1.2

  1997       I      1.9      6.1       4.1      4.3       1.9       2.3     -1.8      1.3      3.8      1.6
            II      2.5      4.7       2.2      3.3       2.2       0.8      0.5      0.7      3.2      1.1
           III      6.7      7.9       1.1      4.5       2.4      -2.1     -1.7     -2.0     14.1      0.1
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  1995       I     -0.6      3.9       4.6      1.6      -1.3       2.2     -1.7      1.2      6.6      1.8
            II      0.4      3.5       3.0      2.2      -0.8       1.8      1.3      1.7      1.9      1.7
           III      1.5      4.3       2.7      2.5      -0.1       1.0     -0.5      0.6      6.7      1.3
            IV      1.4      3.2       1.8      2.6       0.0       1.2      0.0      0.9      3.6      1.2

        ANNUAL      0.8      3.7       2.9      2.3      -0.5       1.5     -0.2      1.1      4.7      1.5

  1996       I      2.5      3.7       1.2      2.5      -0.2       0.0     -0.6     -0.2     12.8      1.4
            II      2.9      5.1       2.2      2.9       0.0       0.0     -1.6     -0.4     14.6      1.3
           III      2.3      4.4       2.1      3.1       0.1       0.8     -0.9      0.4      7.2      1.2
            IV      2.2      4.8       2.5      3.2       0.0       1.0     -1.7      0.3      6.2      1.0

        ANNUAL      2.4      4.5       2.1      2.9      -0.1       0.4     -1.2      0.0     10.0      1.2

  1997       I      2.4      5.8       3.3      3.8       0.8       1.3     -2.3      0.4      3.5      0.8
            II      2.2      5.1       2.8      3.5       1.1       1.3     -1.4      0.6      2.9      0.9
           III      3.3      6.0       2.6      3.8       1.5       0.5     -1.4      0.0      5.4      0.7
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        December 4, 1997
  r=revised                                                               Source: Bureau of Labor Statistics


SOURCES:  Output data are from the Bureau of Economic Analysis and the Census
Bureau of the U.S. Department of Commerce; the Bureau of Labor Statistics,
U.S. Department of Labor; and the Federal Reserve Board.  Compensation and
hours data are from the Bureau of Labor Statistics  and the Bureau of
Economic Analysis.

RELIABILITY:  Productivity and cost measures are regularly revised as more
complete information becomes available.  The measures are first published 30
days after the close of the reference period; revisions appear 30 days later,
and second revisions after an additional 60 days.



                            Footnotes, Tables 1-6

(1)  Wages and salaries of employees plus employers' contributions for social
     insurance and private benefit plans.  Except for nonfinancial
     corporations, where there are no self-employed, data also include an
     estimate of wages, salaries, and supplemental payments for the self-
     employed.

(2)  Compensation per hour adjusted for changes in the Consumer Price Index
     for All Urban Consumers.

(3)  Unit nonlabor payments include profits, capital consumption allowances,
     interest, rental income of persons, and indirect taxes.

(4)  Current dollar output divided by the output index.

(5)  Quarterly changes:  Percent change compounded at annual rate from the
     original data rather than index numbers.  Annual changes:  Percent
     change between annual average levels.

(6)  Unit nonlabor 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.