USDL 03-674
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 8:30 A.M. EST,
THURSDAY, NOVEMBER 6, 2003

Internet address:       http://www.bls.gov/lpc/
Historical, technical   
  information:          (202) 691-5606
Current data:           (202) 691-5200
Media contact:          (202) 691-5902


                           PRODUCTIVITY AND COSTS
                             Third Quarter 2003


   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 2003.  The preliminary seasonally-adjusted
annual rates of productivity growth in the third quarter were:

               7.4 percent in the business sector and
               8.1 percent in the nonfarm business sector.

Productivity increased 7.4 percent in the business sector, as output grew 8.8
percent and hours increased 1.3 percent.  The 8.1 percent increase in nonfarm
business productivity also reflected an 8.8 percent growth in output, with a
0.7 percent rise in nonfarm business hours (table A).

   In manufacturing, productivity increases in the third quarter were:

               8.6 percent in manufacturing,
              14.7 percent in durable goods manufacturing, and
               2.3 percent in nondurable goods manufacturing.

The increase in manufacturing productivity compares with a 3.1-percent rise
reported for the previous quarter (as revised).  Output and hours in
manufacturing, which includes about 15 percent of U.S. business sector
employment, tend to vary more from quarter to quarter than data for the
aggregate business and nonfarm business sectors.  Third-quarter measures are
summarized in table A and appear in detail in tables 1 through 5.

   The data sources and methods used in the preparation of the manufacturing
series differ from those used in preparing the business and nonfarm business
series, and these measures are not directly comparable.  Output measures for
business and nonfarm business are based on measures of gross domestic product
prepared by the Bureau of Economic Analysis of the U.S. Department of
Commerce.  Quarterly output measures for manufacturing reflect indexes of
industrial production independently prepared by the Board of Governors of the
Federal Reserve System.  See Technical Notes for further information on data
sources.


-----------------------------------------------------------------------------
Revised  historical measures through 2002 will be released on Jan.  7,  2004,
reflecting  the  release of revised source data.  For  more  information  see
"Upcoming changes".
-----------------------------------------------------------------------------


-------------------------------------------------------------------
Table A. Productivity and costs: Preliminary third-quarter 2003
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           7.4      8.8     1.3     2.4     0.1     -4.6
 Nonfarm business   8.1      8.8     0.7     3.1     0.8     -4.6
 Manufacturing      8.6      2.9    -5.2     4.3     1.9     -4.0
   Durable         14.7      7.8    -6.0     3.7     1.4     -9.6
   Nondurable       2.3     -1.8    -4.0     5.3     2.9      2.9
-------------------------------------------------------------------
                      Percent change from same quarter a year ago
 
 Business           4.7      4.1    -0.6     2.8     0.6     -1.8
 Nonfarm business   4.7      4.1    -0.6     2.7     0.5     -1.9
 Manufacturing      3.8     -1.1    -4.7     4.5     2.2      0.7
  Durable           5.6      0.1    -5.2     4.1     1.8     -1.4
  Nondurable        1.8     -2.3    -4.0     5.2     3.0      3.3
-------------------------------------------------------------------


Business

   From the second quarter to the third quarter of 2003, business sector
productivity increased at a 7.4 percent annual rate.  Output increased 8.8
percent, while hours of all persons engaged in the sector increased 1.3
percent (seasonally adjusted annual rates).  The output increase was the
largest since the fourth quarter of 1992, when output grew at a 9.3 percent
annual rate.  After revisions, productivity in the business sector also rose
7.4 percent in the second quarter of 2003, reflecting a 4.5-percent rise in
output and a  2.7-percent decline in hours (tables B and 1).
   
   Hourly compensation in the business sector increased at an annual rate of
2.4 percent during the third quarter of 2003.  Revised results show that
hourly compensation increased 4.1 percent in the second quarter  (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, edged up 0.1 percent in the third quarter of 2003.

   Unit labor costs, which reflect changes in both hourly compensation and
productivity, decreased at a 4.6-percent annual rate during the third
quarter.  These costs had decreased 3.1 percent in the second quarter of 2003
(as revised).  The implicit price deflator for the business sector increased
1.8 percent during the third quarter of 2003, following a 1.0 percent
increase in the previous quarter.

Nonfarm business

   Productivity in the nonfarm business sector grew at an 8.1-percent annual
rate during the third quarter of 2003.  Output grew 8.8 percent in the third
quarter, faster than at any time since the fourth quarter of 1992, when it
increased 9.8 percent (seasonally adjusted annual rates).  Hours worked in
the nonfarm business sector rose 0.7 percent, reflecting a 0.3-percent gain
in employment combined with a 0.4-percent increase in average weekly hours at
work.  After revisions, nonfarm business productivity increased 7.0 percent
in the second quarter of 2003, as output grew 4.6 percent and hours declined
2.2 percent (table 2).

   Hourly compensation increased at a 3.1 percent annual rate in the third
quarter of 2003. When the rise in consumer prices is taken into account, real
hourly compensation rose at a 0.8-percent annual rate during the July-
September period.  During the second quarter of 2002, real hourly
compensation had risen 3.0 percent.
   
   Unit labor costs fell 4.6 percent during the third quarter of 2003.  In
the second quarter, unit labor costs in the nonfarm business sector had
decreased 3.2 percent.  The implicit price deflator for nonfarm business
output rose 1.5 percent in the third quarter of 2003.


Manufacturing

   Productivity increased 8.6 percent in manufacturing in the third quarter
of 2003, as output grew 2.9 percent and hours of all persons fell 5.2 percent
(seasonally adjusted annual rates).  Total manufacturing output had decreased
in each of the previous three quarters.  The 3.1 percent increase in labor
productivity in the second quarter of 2003 reflected a 2.9-percent decrease
in output and a 5.8-percent drop in hours.  In durable goods, productivity
grew 14.7 percent in the third quarter as output increased 7.8 percent and
hours of all persons fell 6.0 percent.  The gain in durable manufacturing
output per hour was the largest since the first quarter of 1971, when it
increased 15.1 percent.  Productivity increased 2.3 percent in nondurable
goods, as output declined 1.8 percent and hours of all persons fell 4.0
percent (tables 3, 4, and 5).

   Hourly compensation of manufacturing workers increased an average of 4.3
percent during the third quarter of 2003,  reflecting increases of 3.7
percent in durable goods and 5.3 percent in nondurable goods.  When the
increase in consumer prices is taken into account, real hourly compensation
in total manufacturing rose 1.9 percent in the third quarter.

   Unit labor costs in manufacturing decreased 4.0 percent in the third
quarter of 2003, after increasing 1.9 percent in the second quarter.  In the
durable goods sector, unit labor costs in the third quarter fell 9.6 percent,
the largest decline in these costs since the second quarter of 2000, when
they dropped 13.0 percent.  Unit labor costs rose 2.9 percent in the
nondurable goods sector in the third quarter of 2003, about the same as the
2.7 percent rise one quarter earlier.


Revised Measures

   Current and previous measures for the first and second quarters of 2003
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 were slightly higher in the second quarter than reported on
Sept. 4, based on information then available.  In the manufacturing sector,
output declined more, and productivity increased less, than previously
reported.  In the first quarter of 2003, growth in hourly compensation in all
of these sectors was revised down, which resulted in smaller increases 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 2003
Business:                                                        
  Previous         7.2       4.2     -2.7     4.3       3.7      -2.7
  Current          7.4       4.5     -2.7     4.1       3.5      -3.1
Nonfarm business:                                                
  Previous         6.8       4.4     -2.3     3.8       3.2      -2.8
  Current          7.0       4.6     -2.2     3.6       3.0      -3.2
Manufacturing:                                                   
  Previous         3.7      -2.4     -5.9     5.2       4.6       1.5
  Current          3.1      -2.9     -5.8     5.0       4.4       1.9
----------------------------------------------------------------------
                             First quarter 2003
Business:                                                        
  Previous         2.7       1.4     -1.2     4.8       0.9       2.0
  Current          2.7       1.4     -1.2     3.2      -0.6       0.5
Nonfarm business:                                                
  Previous         2.1       1.4     -0.7     4.1       0.2       2.0
  Current          2.1       1.4     -0.7     2.6      -1.2       0.4
Manufacturing:                                                   
  Previous         4.0      -0.7     -4.5     6.3       2.4       2.2
  Current          4.0      -0.7     -4.5     5.4       1.5       1.3
----------------------------------------------------------------------

Revised measures: Nonfinancial Corporations
   
   Productivity and cost measures for nonfinancial corporations for the
first and second quarters of 2003 also were revised to incorporate more
recent information than was available on Sept. 4.
   
   Productivity grew at an annual rate of 8.4 percent in second-quarter
2003, compared with the increase of 8.1 percent published Sept. 4.  This was
largely the result of an upward revision in output growth from 5.9 percent to
6.3 percent.  Hourly compensation was revised down slightly, and unit labor
costs fell more, 4.3 percent, than the 3.8-percent decline reported
previously.  Unit profits grew at a 61.6 percent annual rate in the second
quarter of 2003, compared with the preliminary estimate of 55.5 percent.
Nonfinancial corporate output, productivity, and hourly compensation grew
less during the first quarter of 2003 than reported Sept. 4.  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 2003

Previous    8.1      5.9    -2.0    3.9      3.3    -3.8   55.5     -0.7
Current     8.4      6.3    -1.9    3.7      3.1    -4.3   61.6     -0.5
----------------------------------------------------------------------------
                              First quarter 2003

Previous    4.3      2.8    -1.5    5.2      1.3     0.9    7.6      0.7
Current     3.4      1.9    -1.5    3.8      0.0     0.4    8.5      0.7
----------------------------------------------------------------------------
                                      
                              Upcoming changes

   In order to provide users with information on long-term productivity and
cost trends reflecting the release of the revised national income and product
accounts by the Bureau of Economic Analysis, U.S. Department of Commerce, on
Dec. 10, 2003,  revised historical measures of productivity and costs for all
sectors will be prepared by the BLS.  Revised data for the manufacturing and
nonfinancial corporate sectors also will reflect conversion from the 1987
Standard Industrial Classification to the 2002 North American Industry
Classification System.  On Jan. 7, 2004, the BLS will post revised historical
measures through the fourth quarter of 2002 on its web site
http://www.bls.gov/lpc/ , but will not incorporate these data into the
LABSTAT database at that time.  In keeping with usual practices, revised data
for the second and third quarters of 2003 will be reported in the
"Productivity and Costs" release of Feb. 5, 2004, which also will include
revised first-quarter 2003 data.  All revised historical data will be
incorporated into the LABSTAT database at the time of that release.
                                      
                                      
                              Next release date
   
   The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Wednesday, Dec. 3, 2003.  It will present third-quarter measures for
nonfinancial corporations and revised third-quarter measures for business,
nonfarm business, and manufacturing.  Historical revisions to selected
measures for the manufacturing sector, due to incorporation of revised
indexes of industrial production for 2001-2003, will be reported 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 were  adjusted  to
hours at work using the BLS Hours at Work survey, conducted for this purpose.
Data from the National Compensation Survey are used for recent years.
     Data  from  the  BLS Current Population Survey (CPS) are used  for  farm
labor, nonfarm proprietors, and nonfarm unpaid family workers.  Estimates  of
labor input for government enterprises are derived from the CPS, the CES, and
the  National  Income and Product Accounts (NIPA) prepared by the  Bureau  of
Economic Analysis (BEA) of the Department of Commerce.

Output: Business sector output is an annual-weighted index constructed  after
excluding  from  gross domestic product (GDP) the following outputs:  General
government, nonprofit institutions, 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

  2001       I     117.4      140.4     119.6     137.4       111.9      117.1       112.0      115.2
            II     117.8      139.4     118.3     138.2       111.6      117.3       113.3      115.8
           III     118.8      139.1     117.1     139.1       112.1      117.1       115.1      116.4
            IV     121.3      140.3     115.6     139.8       112.8      115.2       117.0      115.9

        ANNUAL     118.8      139.8     117.6     138.6       112.1      116.7       114.3      115.8

  2002       I     123.9      142.3     114.9     141.0       113.4      113.8       119.7      116.0
            II     124.1      142.5     114.8     142.4       113.5      114.7       118.8      116.2
           III     125.9      144.4     114.6     143.1       113.5      113.6       120.9      116.3
            IV     126.4      145.0     114.7     143.7       113.4      113.7       122.1      116.8

        ANNUAL     125.1      143.5     114.7     142.5       113.5      113.9       120.4      116.3

  2003       I     127.2      145.5     114.3    r144.8      r113.3     r113.8      r123.0      117.2
            II     129.5     r147.1    r113.6    r146.3      r114.2     r112.9      r125.3     r117.5
           III     131.9      150.2     113.9     147.2       114.2      111.6       129.0      118.0
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2001       I      -0.5       -1.0      -0.5       4.6         0.8        5.1         0.3        3.4
            II       1.5       -2.8      -4.3       2.3        -0.9        0.8         4.6        2.2
           III       3.3       -0.9      -4.1       2.5         1.6       -0.8         6.8        1.8
            IV       8.7        3.5      -4.8       2.1         2.7       -6.1         6.7       -1.6

        ANNUAL       2.0       -0.2      -2.1       3.8         1.0        1.8         2.3        2.0

  2002       I       8.7        5.9      -2.6       3.5         2.2       -4.8         9.6        0.3
            II       0.8        0.6      -0.2       4.0         0.4        3.1        -3.2        0.7
           III       5.9        5.3      -0.6       2.1         0.0       -3.6         7.6        0.5
            IV       1.5        1.7       0.2       1.6        -0.4        0.1         3.8        1.5

        ANNUAL       5.3        2.7      -2.5       2.8         1.2       -2.3         5.3        0.4

  2003       I       2.7        1.4      -1.2      r3.2       r-0.6       r0.5        r3.2        1.6
            II      r7.4       r4.5      -2.7      r4.1        r3.5      r-3.1        r7.7       r1.0
           III       7.4        8.8       1.3       2.4         0.1       -4.6        12.3        1.8
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2001       I       2.2        1.4      -0.8       4.9         1.4        2.6         1.4        2.2
            II       1.1       -0.7      -1.7       4.8         1.4        3.7        -0.5        2.1
           III       1.7       -1.0      -2.6       3.3         0.6        1.6         3.7        2.3
            IV       3.2       -0.3      -3.4       2.9         1.0       -0.3         4.6        1.4

        ANNUAL       2.0       -0.2      -2.1       3.8         1.0        1.8         2.3        2.0

  2002       I       5.5        1.4      -3.9       2.6         1.4       -2.8         6.9        0.7
            II       5.4        2.3      -2.9       3.0         1.7       -2.2         4.9        0.3
           III       6.0        3.8      -2.1       2.9         1.3       -2.9         5.0        0.0
            IV       4.2        3.4      -0.8       2.8         0.5       -1.4         4.3        0.7

        ANNUAL       5.3        2.7      -2.5       2.8         1.2       -2.3         5.3        0.4

  2003       I       2.7        2.2      -0.5      r2.7       r-0.1       r0.0        r2.8        1.1
            II       4.3        3.2      -1.1      r2.8        r0.6      r-1.5        r5.5        1.1
           III       4.7        4.1      -0.6       2.8         0.6       -1.8         6.7        1.4
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 6, 2003
  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

  2001       I     116.9      140.7     120.3     136.7       111.3      117.0       113.5      115.7
            II     117.4      139.7     119.0     137.4       111.0      117.1       114.9      116.3
           III     118.3      139.4     117.8     138.2       111.4      116.8       116.8      116.8
            IV     120.7      140.4     116.3     138.9       112.1      115.1       119.0      116.5

        ANNUAL     118.3      140.1     118.4     137.8       111.4      116.5       116.1      116.3

  2002       I     123.4      142.5     115.5     140.2       112.8      113.6       121.5      116.4
            II     123.7      142.9     115.5     141.5       112.9      114.4       121.2      116.8
           III     125.5      144.7     115.3     142.2       112.8      113.3       123.1      116.9
            IV     126.0      145.3     115.3     142.8       112.7      113.3       124.3      117.3

        ANNUAL     124.7      143.9     115.4     141.7       112.8      113.6       122.5      116.9

  2003       I     126.7      145.8     115.1    r143.7      r112.4     r113.4      r125.2      117.7
            II    r128.9     r147.5     114.4    r145.0      r113.2     r112.5      r127.5      117.9
           III     131.4      150.6     114.6     146.1       113.4      111.2       131.0      118.4
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2001       I      -0.4       -0.9      -0.5       4.3         0.5        4.7         0.8        3.3
            II       1.6       -2.7      -4.3       2.0        -1.2        0.3         5.0        2.0
           III       3.4       -0.8      -4.1       2.4         1.5       -0.9         6.6        1.7
            IV       8.3        2.9      -5.0       2.1         2.7       -5.7         7.7       -1.0

        ANNUAL       1.9       -0.1      -2.0       3.6         0.8        1.7         2.4        1.9

  2002       I       9.3        6.2      -2.9       3.7         2.4       -5.2         8.7       -0.2
            II       1.0        0.9       0.0       3.9         0.3        2.9        -0.9        1.4
           III       5.9        5.2      -0.6       2.0        -0.2       -3.7         6.6        0.1
            IV       1.7        1.7       0.0       1.6        -0.4       -0.1         3.9        1.4

        ANNUAL       5.4        2.7      -2.5       2.8         1.2       -2.4         5.6        0.5

  2003       I       2.1        1.4      -0.7      r2.6       r-1.2       r0.4        r2.8        1.4
            II      r7.0       r4.6     r-2.2      r3.6        r3.0      r-3.2        r7.4       r0.8
           III       8.1        8.8       0.7       3.1         0.8       -4.6        11.6        1.5
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2001       I       2.0        1.4      -0.6       4.5         1.1        2.5         1.4        2.1
            II       1.1       -0.6      -1.6       4.6         1.1        3.5        -0.3        2.1
           III       1.7       -0.8      -2.5       3.0         0.3        1.3         3.7        2.2
            IV       3.2       -0.4      -3.5       2.7         0.9       -0.5         5.0        1.5

        ANNUAL       1.9       -0.1      -2.0       3.6         0.8        1.7         2.4        1.9

  2002       I       5.6        1.3      -4.0       2.5         1.3       -2.9         7.0        0.6
            II       5.4        2.3      -3.0       3.0         1.7       -2.3         5.4        0.5
           III       6.1        3.8      -2.1       2.9         1.3       -3.0         5.4        0.1
            IV       4.4        3.5      -0.9       2.8         0.5       -1.6         4.5        0.7

        ANNUAL       5.4        2.7      -2.5       2.8         1.2       -2.4         5.6        0.5

  2003       I       2.6        2.3      -0.3      r2.5       r-0.4      r-0.1        r3.1        1.1
            II       4.1        3.2      -0.9      r2.4        r0.3      r-1.6        r5.2        0.9
           III       4.7        4.1      -0.6       2.7         0.5       -1.9         6.4        1.3
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 6, 2003
  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

  2001       I            135.2        134.9         99.8        132.0          107.5          97.6
            II            135.8        132.8         97.8        133.6          107.9          98.4
           III            137.8        131.1         95.1        135.0          108.8          97.9
            IV            139.9        129.1         92.3        136.7          110.3          97.7

        ANNUAL            137.1        132.0         96.3        134.3          108.6          97.9

  2002       I            142.9        129.5         90.6        138.3          111.3          96.8
            II            144.8        130.6         90.2        140.5          112.0          97.0
           III            147.2        131.6         89.4        141.3          112.1          96.0
            IV            147.0        130.3         88.6        142.4          112.4          96.9

        ANNUAL            145.5        130.5         89.7        140.6          112.0          96.7

  2003       I            148.5        130.1         87.6       r144.3         r112.9         r97.2
            II           r149.6       r129.2         86.3       r146.1         r114.1         r97.6
           III            152.7        130.1         85.2        147.6          114.6          96.7
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.1         -7.6         -5.7          1.6           -2.1           3.7
            II              1.8         -6.2         -7.9          5.0            1.7           3.1
           III              6.1         -4.9        -10.3          4.1            3.2          -1.8
            IV              6.0         -6.1        -11.5          5.1            5.7          -0.9

        ANNUAL              1.6         -4.9         -6.4          2.4           -0.4           0.8

  2002       I              9.1          1.2         -7.2          5.0            3.7          -3.8
            II              5.5          3.5         -1.9          6.3            2.7           0.8
           III              6.7          3.0         -3.4          2.5            0.3          -3.9
            IV             -0.4         -3.7         -3.3          3.1            1.1           3.5

        ANNUAL              6.1         -1.1         -6.8          4.7            3.1          -1.3

  2003       I              4.0         -0.7         -4.5         r5.4           r1.5          r1.3
            II             r3.1        r-2.9        r-5.8         r5.0           r4.4          r1.9
           III              8.6          2.9         -5.2          4.3            1.9          -4.0
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              1.2         -2.4         -3.6          0.5           -2.9          -0.7
            II              0.7         -5.0         -5.7          3.4            0.0           2.7
           III              1.8         -5.9         -7.5          2.1           -0.6           0.3
            IV              2.9         -6.2         -8.9          3.9            2.1           1.0

        ANNUAL              1.6         -4.9         -6.4          2.4           -0.4           0.8

  2002       I              5.7         -4.0         -9.2          4.8            3.6          -0.9
            II              6.7         -1.7         -7.8          5.1            3.8          -1.4
           III              6.8          0.3         -6.1          4.7            3.1          -2.0
            IV              5.1          1.0         -4.0          4.2            1.9          -0.9

        ANNUAL              6.1         -1.1         -6.8          4.7            3.1          -1.3

  2003       I              3.9          0.5         -3.3         r4.3           r1.4          r0.4
            II             r3.3        r-1.1        r-4.2         r4.0           r1.8          r0.7
           III              3.8         -1.1         -4.7          4.5            2.2           0.7
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 6, 2003   
  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

  2001       I            149.3        158.3        106.0        129.4          105.3          86.6
            II            149.7        154.9        103.5        131.3          106.1          87.7
           III            151.7        151.8        100.1        132.0          106.4          87.0
            IV            153.7        148.6         96.7        134.3          108.4          87.4

        ANNUAL            151.0        153.4        101.5        131.7          106.5          87.2

  2002       I            158.1        149.4         94.5        135.6          109.1          85.8
            II            160.7        151.2         94.1        138.2          110.3          86.0
           III            163.9        152.6         93.1        138.8          110.1          84.7
            IV            164.5        151.5         92.0        140.0          110.5          85.1

        ANNUAL            161.8        151.2         93.4        138.1          110.0          85.4

  2003       I            165.9        151.3         91.2       r141.5         r110.6         r85.3
            II           r167.2       r149.9        r89.7       r143.1         r111.7         r85.6
           III            173.0        152.8         88.3        144.4          112.1          83.5
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.0         -8.9         -7.0          3.1           -0.6           5.2
            II              1.0         -8.2         -9.1          6.2            2.9           5.1
           III              5.4         -7.9        -12.6          2.0            1.1          -3.3
            IV              5.5         -8.0        -12.8          7.2            7.8           1.6

        ANNUAL              0.9         -6.3         -7.1          1.8           -0.9           0.9

  2002       I             11.9          2.1         -8.7          3.9            2.6          -7.1
            II              6.7          4.9         -1.7          8.1            4.4           1.2
           III              8.3          3.8         -4.2          1.6           -0.5          -6.2
            IV              1.5         -2.9         -4.4          3.5            1.5           2.0

        ANNUAL              7.1         -1.5         -8.0          4.9            3.3          -2.1

  2003       I              3.4         -0.5         -3.8         r4.4           r0.5          r0.9
            II             r3.1        r-3.5        r-6.4         r4.6           r4.0           1.4
           III             14.7          7.8         -6.0          3.7            1.4          -9.6
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              0.5         -2.9         -3.3         -1.1           -4.3          -1.6
            II             -0.2         -6.3         -6.1          3.0           -0.4           3.2
           III              0.9         -7.8         -8.6          1.1           -1.6           0.2
            IV              2.4         -8.2        -10.4          4.6            2.7           2.1

        ANNUAL              0.9         -6.3         -7.1          1.8           -0.9           0.9

  2002       I              5.9         -5.6        -10.8          4.8            3.6          -1.0
            II              7.3         -2.4         -9.1          5.3            3.9          -1.9
           III              8.1          0.5         -7.0          5.2            3.5          -2.7
            IV              7.0          1.9         -4.8          4.2            2.0          -2.6

        ANNUAL              7.1         -1.5         -8.0          4.9            3.3          -2.1

  2003       I              5.0          1.3         -3.5         r4.4           r1.4         r-0.6
            II             r4.1         -0.8         -4.7         r3.5           r1.3         r-0.5
           III              5.6          0.1         -5.2          4.1            1.8          -1.4
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 6, 2003   
  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

  2001       I            123.1        112.7         91.6        134.7          109.7         109.4
            II            123.8        111.7         90.2        135.8          109.7         109.7
           III            125.6        111.3         88.6        138.6          111.7         110.3
            IV            127.4        110.1         86.4        139.2          112.4         109.3

        ANNUAL            125.0        111.5         89.2        137.0          110.8         109.7

  2002       I            129.1        110.2         85.4        141.6          113.9         109.7
            II            130.4        110.8         84.9        142.9          113.9         109.5
           III            131.9        111.4         84.4        144.3          114.5         109.4
            IV            130.9        110.1         84.1        145.3          114.7         111.0

        ANNUAL            130.6        110.6         84.7        143.5          114.3         109.9

  2003       I            132.5        109.9         82.9       r147.8         r115.5        r111.5
            II           r133.5        109.4         81.9       r149.9         r117.0         112.2
           III            134.3        108.9         81.1        151.8          117.9         113.1
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.5         -6.0         -3.6         -0.8           -4.4           1.8
            II              2.3         -3.8         -5.9          3.3            0.0           1.0
           III              5.8         -1.4         -6.7          8.4            7.4           2.5
            IV              6.0         -4.0         -9.4          1.9            2.5          -3.8

        ANNUAL              2.3         -3.2         -5.3          3.6            0.8           1.3

  2002       I              5.4          0.3         -4.9          7.1            5.8           1.6
            II              4.2          1.9         -2.1          3.5            0.0          -0.6
           III              4.6          2.3         -2.2          4.2            2.0          -0.4
            IV             -3.1         -4.6         -1.6          2.6            0.6           5.9

        ANNUAL              4.5         -0.8         -5.0          4.7            3.1           0.2

  2003       I              5.2         -0.6         -5.5         r7.0           r3.1          r1.7
            II             r3.1        r-1.9         -4.9          5.9            5.3          r2.7
           III              2.3         -1.8         -4.0          5.3            2.9           2.9
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              2.1         -1.9         -3.9          3.1           -0.3           1.0
            II              1.7         -3.4         -5.1          4.1            0.7           2.4
           III              2.5         -3.5         -5.9          4.1            1.3           1.5
            IV              2.8         -3.8         -6.4          3.1            1.3           0.3

        ANNUAL              2.3         -3.2         -5.3          3.6            0.8           1.3

  2002       I              4.8         -2.2         -6.7          5.1            3.9           0.3
            II              5.3         -0.8         -5.8          5.2            3.9          -0.1
           III              5.0          0.1         -4.7          4.2            2.5          -0.8
            IV              2.7         -0.1         -2.7          4.3            2.1           1.6

        ANNUAL              4.5         -0.8         -5.0          4.7            3.1           0.2

  2003       I              2.7         -0.3         -2.9         r4.3           r1.4          r1.6
            II             r2.4        r-1.3         -3.6         r4.9           r2.7           2.5
           III              1.8         -2.3         -4.0          5.2            3.0           3.3
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 6, 2003    
  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

  2001       I    118.7    147.9     124.7    131.2     106.8     110.6    111.6    110.8     93.1    109.3
            II    120.0    147.8     123.1    132.6     107.1     110.4    113.5    111.3     95.4    109.9
           III    121.3    147.7     121.7    133.8     107.8     110.3    115.5    111.7     97.9    110.5
            IV    124.5    149.6     120.2    134.7     108.7     108.2    114.1    109.8    107.6    109.6

        ANNUAL    121.1    148.2     122.4    133.0     107.6     109.9    113.7    110.9     98.5    109.8

  2002       I    126.0    150.8     119.7    135.9     109.4     107.9    114.0    109.5    107.6    109.4
            II    127.7    152.8     119.6    137.3     109.5     107.5    114.5    109.4    107.8    109.3
           III    128.7    153.4     119.2    138.2     109.7     107.4    115.4    109.6    104.6    109.1
            IV    129.9    154.5     118.9    139.2     109.9     107.1    115.2    109.3    110.1    109.4

        ANNUAL    128.1    152.9     119.3    137.7     109.6     107.5    114.8    109.4    107.5    109.3

  2003       I   r131.0   r155.2     118.4   r140.5    r109.9    r107.2   r114.9    109.3   r112.4    109.6
            II   r133.7   r157.6    r117.9   r141.8    r110.7    r106.1   r112.6   r107.8   r126.8    109.4
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2001       I     -2.6     -3.3      -0.7     -1.2      -4.7       1.4     10.1      3.7    -20.2      1.7
            II      4.7     -0.5      -5.0      4.3       1.0      -0.4      7.1      1.6     10.0      2.2
           III      4.4     -0.3      -4.5      3.7       2.8      -0.6      7.2      1.5     10.8      2.2
            IV     10.8      5.4      -4.9      2.7       3.3      -7.3     -4.9     -6.7     46.1     -3.3

        ANNUAL      2.0     -0.1      -2.1      3.1       0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      5.0      3.3      -1.6      3.7       2.5      -1.2     -0.2     -0.9     -0.2     -0.8
            II      5.5      5.3      -0.3      4.2       0.6      -1.3      1.7     -0.5      0.9     -0.3
           III      3.1      1.7      -1.4      2.7       0.5      -0.5      3.1      0.5    -11.2     -0.5
            IV      3.8      2.8      -1.0      2.8       0.8      -1.0     -0.6     -0.9     22.8      0.9

        ANNUAL      5.8      3.1      -2.5      3.5       1.9      -2.2      1.0     -1.3      9.1     -0.5

  2003       I     r3.4     r1.9      -1.5     r3.8      r0.0      r0.4    r-1.0     r0.0     r8.5      0.7
            II     r8.4     r6.3     r-1.9     r3.7      r3.1     r-4.3    r-7.9    r-5.3    r61.6    r-0.5
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  2001       I      0.9      0.4      -0.4      3.5       0.1       2.6      6.7      3.7    -22.0      1.3
            II      1.5     -0.1      -1.6      3.9       0.5       2.3      6.8      3.5    -19.7      1.3
           III      1.6     -1.1      -2.7      2.7       0.0       1.1      7.8      2.9    -10.6      1.7
            IV      4.2      0.3      -3.8      2.4       0.5      -1.8      4.7      0.0      9.2      0.7

        ANNUAL      2.0     -0.1      -2.1      3.1       0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      6.2      1.9      -4.0      3.6       2.4      -2.4      2.2     -1.2     15.5      0.0
            II      6.4      3.4      -2.8      3.6       2.3      -2.6      0.9     -1.7     13.0     -0.6
           III      6.1      3.9      -2.1      3.3       1.7      -2.6     -0.1     -1.9      6.9     -1.3
            IV      4.4      3.2      -1.1      3.3       1.1      -1.0      1.0     -0.4      2.4     -0.2

        ANNUAL      5.8      3.1      -2.5      3.5       1.9      -2.2      1.0     -1.3      9.1     -0.5

  2003       I     r4.0     r2.9      -1.1     r3.4      r0.5     r-0.6     r0.8     -0.2     r4.5      0.2
            II     r4.7     r3.1      -1.5     r3.2      r1.1     r-1.4    r-1.7    r-1.5    r17.6      0.1
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        November 6, 2003
  r=revised                                                               Source: Bureau of Labor Statistics


                                      

SOURCES:  Output data are from the Bureau of Economic Analysis and the Census
Bureau of the U.S. Department of Commerce; the Bureau of Labor Statistics,
U.S. Department of Labor; and the Federal Reserve Board.  Compensation and
hours data are from the Bureau of Labor Statistics and the Bureau of Economic
Analysis.

RELIABILITY:  Productivity and cost measures are regularly revised as more
complete information becomes available.  The measures are first published
within 40 days of the close of the reference period; revisions appear 30 days
later, and second revisions after an additional 60 days.  In the business
sector, the third publication (second revision) of a quarterly index of
output per hour of all persons has differed from the initial value by between
-1.4 and +1.5 index points approximately 95 percent of the time.  This
interval is based on the performance of this measure between the fourth
quarter of 1995 and the second quarter of 2003.



                            Footnotes, Tables 1-6

(1)  Wages and salaries of employees plus employers' contributions for social
     insurance and private benefit plans.  Except for nonfinancial
     corporations, where there are no self-employed, data also include an
     estimate of wages, salaries, and supplemental payments for the self-
     employed.

(2)  The change for recent quarters is based on the Consumer Price Index for
     all urban consumers (CPI-U).  The trend from 1978-2002 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.