USDL 03-279
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 8:30 A.M. EDT,
WEDNESDAY, JUNE 4, 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
                             First Quarter 2003


     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised productivity data--as measured by output per hour of all
persons--for the first quarter of 2003.  The revised seasonally adjusted
annual rates of productivity change in the first quarter were:

               2.5 percent in the business sector and
               1.9 percent in the nonfarm business sector.

In both sectors, the first-quarter productivity gains were somewhat higher
than those reported initially on May 1.

     In manufacturing, the revised productivity changes in the first quarter
were:
               1.9 percent in manufacturing,
               2.1 percent in durable goods manufacturing, and
               2.2 percent in nondurable goods manufacturing.

     Manufacturing productivity growth was revised down from the figure
reported on May 1, reflecting a downward revision to productivity growth in
durable goods manufacturing--which comprises about sixty percent of
employment in the sector.  Productivity in nondurable goods manufacturing was
revised up.  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.
First-quarter measures are summarized in table A and appear in detail in
tables 1 through 5.

     The data sources and methods used in the preparation of the
manufacturing series differ from those used in preparing the business and
nonfarm business series, and these measures are not directly comparable.
Output measures for business and nonfarm business are based on measures of
gross domestic product prepared by the Bureau of Economic Analysis of the
U.S. Department of Commerce.  Quarterly output measures for manufacturing
reflect indexes of industrial production independently prepared by the Board
of Governors of the Federal Reserve System.  See Technical Notes for further
information on data sources.


-------------------------------------------------------------------------
Table A. Productivity and costs: Revised first-quarter 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              2.5      2.0    -0.5        3.8      0.0       1.3
Nonfarm business      1.9      1.8    -0.1        3.4     -0.4       1.5
Manufacturing         1.9     -0.7    -2.6        4.5      0.7       2.6
  Durable             2.1      0.1    -2.0        4.3      0.4       2.1
  Nondurable          2.2     -1.2    -3.4        4.8      0.9       2.5
-------------------------------------------------------------------------
                           Percent change from same quarter a year ago
Business              2.6      2.4    -0.2        3.5      0.6       0.9
Nonfarm business      2.4      2.4     0.0        3.3      0.4       0.8
Manufacturing         2.8      0.5    -2.2        4.1      1.1       1.3
  Durable             4.4      1.4    -2.9        4.6      1.7       0.2
  Nondurable          0.8     -0.4    -1.2        3.3      0.4       2.5
-------------------------------------------------------------------------


Business

     Productivity increased 2.5 percent in the business sector (seasonally
adjusted annual rate) from the fourth quarter of 2002 to the first quarter of
2003, as output increased 2.0 percent and hours worked by all persons
decreased 0.5 percent (table 1).

     Hourly compensation increased 3.8 percent during the first quarter of
2003.  This measure of compensation includes wages and salaries, supplements,
employer contributions to employee benefit plans, and taxes.  Real hourly
compensation, which takes into account changes in consumer prices, was
unchanged.
     
     Unit labor costs, which reflect changes in hourly compensation and
productivity, rose 1.3 percent during the first quarter of 2003.  The change
in unit labor costs usually approximates the change in hourly compensation
less the change in productivity.  The implicit price deflator for business
output, which reflects changes in both unit labor costs and unit nonlabor
payments, grew by 1.7 percent from the fourth quarter of 2002 to the first
quarter of 2003.

Nonfarm business

     Productivity rose 1.9 percent in the nonfarm business sector during the
first quarter of 2003, reflecting a 1.8-percent rise in output and a 0.1-
percent decrease in working hours of all persons.  Hours worked in the
nonfarm business sector now have declined in 10 of the last 12 quarters
(table 2).

     Hourly compensation increased 3.4 percent in the first quarter of 2003.
When the rise in consumer prices is taken into account, real hourly
compensation fell 0.4 percent in the first quarter.

     Unit labor costs grew 1.5 percent during the first quarter of 2003. The
implicit price deflator for nonfarm business output also rose by 1.5 percent.

Manufacturing

     Productivity rose 1.9 percent in manufacturing in the first quarter of
2003, as output decreased 0.7 percent and working hours of all persons
declined 2.6 percent (seasonally adjusted annual rates).  In durable goods
industries, productivity grew 2.1 percent, as output edged up by 0.1 percent
and hours fell 2.0 percent.  In nondurable goods industries, productivity
rose 2.2 percent, as output dropped 1.2 percent and hours declined by 3.4
percent (tables 3, 4, and 5).

     Hourly compensation in manufacturing rose 4.5 percent during the first
quarter.  This increase reflects a rise of 4.3 percent in the hourly
compensation of persons in durable goods industries and a larger increase,
4.8 percent, in the hourly compensation of workers in nondurable goods
industries.  Real hourly compensation, which takes account of changes in
consumer prices, rose 0.7 percent for all manufacturing workers.

     Unit labor costs rose 2.6 percent in manufacturing during the first
quarter.  In durable goods industries, unit labor costs grew 2.1 percent.  In
nondurable goods industries, unit labor costs rose 2.5 percent last quarter.


Nonfinancial corporations

     Preliminary first-quarter 2003 measures of productivity and costs for
nonfinancial corporations also were announced today (tables B and 6).
Productivity rose 2.9 percent in the first quarter, less than the 5.0-percent
rise recorded in the fourth quarter of 2002.  Output increased 2.4 percent in
first quarter 2003, while employee-hours declined 0.5 percent (seasonally
adjusted annual rates).  This marked the 10th consecutive decline in hours of
nonfinancial corporate employees.  Nonfinancial corporations include all
corporations doing business in the United States, except banks, stock and com
modity brokers, and finance and insurance agencies.


----------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Preliminary first-quarter 2003
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
2003 I    2.9      2.4    -0.5      4.7      0.8     1.7     2.2     1.0
----------------------------------------------------------------------------
                 Percent change from same quarter a year ago
2003 I    4.3      3.4    -0.8      4.2      1.3    -0.1     2.5     0.3
----------------------------------------------------------------------------

     
     Hourly compensation increased 4.7 percent during the first quarter of
2003.  When the rise in consumer prices is taken into account, real hourly
compensation rose 0.8 percent in the first quarter.  Unit labor costs in
nonfinancial corporations rose 1.7 percent in the first quarter, after
falling in the previous seven quarters.

     Unit profits grew 2.2 percent in first quarter 2003, less than the 20.8-
percent climb in the fourth quarter of 2002.  The implicit price deflator
for nonfinancial corporate output increased 1.0 percent in the first quarter
of 2003.

REVISED MEASURES

     Current and previous measures for the first quarter of 2003 for
business, nonfarm business, and manufacturing are compared in table C.  In
the business and nonfarm business sectors, output and productivity were
revised up from the data reported on May 1, based on information then
available.  Unit labor costs were revised downward.  In the manufacturing
sector, productivity, output, and hourly compensation all were revised down.
Because hourly compensation was revised down by more than productivity, unit
labor costs also were revised down.


-------------------------------------------------------------------------
Table C. Previous and revised productivity and related measures
(Quarterly percent change at seasonally adjusted annual rate)
-------------------------------------------------------------------------                                                                  
                                                         Real     
                                               Hourly    hourly   Unit
                   Produc-                     compen-   compen-  labor
Sector             tivity    Output   Hours    sation    sation   costs
-------------------------------------------------------------------------                                                                  
                             First quarter 2003
Business:                                                         
  Previous          2.2       1.7     -0.5      3.9       0.1      1.7
  Current           2.5       2.0     -0.5      3.8       0.0      1.3
Nonfarm business:                                                 
  Previous          1.6       1.4     -0.1      3.5      -0.3      1.9
  Current           1.9       1.8     -0.1      3.4      -0.4      1.5
Manufacturing:                                                    
  Previous          2.1      -0.6     -2.6      4.8       1.0      2.7
  Current           1.9      -0.7     -2.6      4.5       0.7      2.6
-------------------------------------------------------------------------

                                      
                                      
                              NEXT RELEASE DATE
                                      
     The next release of Productivity and Costs is scheduled for 8:30 AM EDT,
Thursday, Aug. 7, 2003.  Preliminary second-quarter measures for business,
nonfarm business, and manufacturing will be released at that time.  This
release will incorporate the annual benchmark revision to the employment
levels in the BLS establishment survey data.  In addition, the release will
include changes in employment and hours due to incorporation of new ratios of
the hours at work to hours paid and revisions due to updated population
weights in the Current Population Survey.  (See below.)  All employment and
hours series will incorporate new information on seasonal patterns.

Current and upcoming changes to productivity and cost data
     
     Measures of employment and hours for self-employed persons and unpaid
family workers in nonfarm establishments, hours of employees in government
enterprises, and employment and hours of all persons working on farms
incorporate data from the Current Population Survey (CPS).  Data from this
survey were revised to incorporate population controls from the 2000
population census and new industry and occupational classification systems.
For the productivity and costs measures, historical measures of employment
and hours through the fourth quarter of 2002 have not yet been revised to
incorporate these changes to the household survey.  First-quarter measures
were constructed by calculating the change in the first-quarter 2003 data to
revised fourth-quarter 2002 data and applying the movements to unrevised
fourth-quarter levels.  Historical revisions to the employment and hours
measures constructed from the CPS will be incorporated in the Aug. 7 release.
     
     At that time, historical revisions to employment and hours data for the
business and nonfarm business sectors based on data from the nonfarm payroll
series also will be incorporated.  These revisions will include conversion to
the 2002 North American Industry Classification System (NAICS) from the 1987
Standard Industrial Classification (SIC), the annual benchmark to employment
levels from the Covered Employment and Wages program, and new information on
seasonal patterns.
     
     In addition, new ratios of hours worked to hours paid will be
incorporated into the measures of employee hours on Aug. 7.  The Hours at
Work Surveys, which had been used to adjust the paid hours of wage and salary
employees to their hours at the workplace, will be replaced with a comparable
set of measures derived from information on scheduled hours of work and paid
leave collected from employers participating in the National Compensation
Survey.  These ratios will be adjusted to levels from the Hours at Work
Survey and will cover the period following 2000.


                               TECHNICAL NOTES
                                      
Labor Hours: Hours data for the labor productivity and cost measures include
hours for all persons working in the sector-wage and salary workers, the self-
employed, and unpaid family workers.  The primary source of hours and
employment data is the BLS Current Employment Statistics (CES) program, which
provides monthly survey data on the number of jobs held by wage and salary
workers in nonfarm establishments.  The CES also provides average weekly paid
hours of production and nonsupervisory workers in these establishments.  The
Office of Productivity and Technology estimates average weekly paid hours of
nonproduction and supervisory workers.  Weekly paid hours are adjusted to
hours at work using the BLS Hours at Work survey, conducted for this purpose.
    Data from the BLS Current Population Survey (CPS) are used for farm
labor; in the nonfarm sector, the National Income and Product Accounts (NIPA)
prepared by the Bureau of Economic Analysis (BEA) of the Department of
Commerce and the CPS are used to measure labor input for government
enterprises, proprietors, and unpaid family workers.

Output: Business sector output is an annual-weighted index constructed after
excluding from gross domestic product (GDP) the following outputs: General
government, nonprofit institutions, paid employees of private households, and
the rental value of owner-occupied dwellings.  Corresponding exclusions also
are made in labor inputs.  Business output accounted for about 77 percent of
the value of GDP in 1996.  Nonfarm business, which also excludes farming,
accounted for about 76 percent of GDP in 1996.
    Annual indexes for manufacturing and its durable and nondurable goods
components are constructed by deflating current-dollar industry value of
production data from the U.S. Bureau of the Census with deflators from the
BEA.  These deflators are based on data from the BLS producer price program
and other sources.  The industry shipments are aggregated using annual
weights, and intrasector transactions are removed.  Quarterly manufacturing
output measures are based on the index of industrial production prepared
monthly by the Board of Governors of the Federal Reserve System adjusted to
be consistent with annual indexes of manufacturing sector output prepared by
BLS.  Durables include the following 2-digit SIC industries: Primary metal
industries; fabricated metal products; nonelectrical machinery; industrial
and commercial machinery and computer equipment; electronic and other
electrical equipment; transportation equipment; instruments; lumber and
lumber products; furniture and fixtures; stone, clay, and glass and concrete
products; and miscellaneous manufactures.  Nondurables include: Food and
kindred products, tobacco products, textile mill products, apparel products,
paper and allied products, printing and publishing, chemicals and chemical
products, petroleum refining and related industries, rubber and plastic
products, and leather and leather products.
    Nonfinancial corporate output is an annual-weighted index calculated on
the basis of the costs incurred and the incomes earned from production.  The
output measure excludes the following outputs from GDP: general government;
nonprofit institutions; employees of private households; the rental value of
owner-occupied dwellings; unincorporated business; and those corporations
which are depository institutions, nondepository institutions, security and
commodity brokers, insurance carriers, regulated investment offices, small
business investment offices, and real estate investment trusts.  Nonfinancial
corporations accounted for about 53 percent of the value of GDP in 1996.

Productivity: These productivity measures describe the relationship between
real output and the labor time involved in its production.  They show the
changes from period to period in the amount of goods and services produced
per hour.  Although these measures relate output to hours at work of all
persons engaged in a sector, they do not measure the specific contribution of
labor, capital, or any other factor of production.  Rather, they reflect the
joint effects of many influences, including changes in technology; capital
investment; level of output; utilization of capacity, energy, and materials;
the organization of production; managerial skill; and the characteristics and
effort of the work force.
    Information in this release will be made available to sensory-impaired
individuals upon request.  Voice phone: 202-691-5200; Federal Relay Service
number: 1-800-877-8339.


  Table 1. Business sector: Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  2001       I     117.5      140.4     119.5     137.3       111.8      116.9       112.3      115.2
            II     117.4      139.4     118.7     137.5       111.0      117.1       113.6      115.8
           III     117.9      139.1     117.9     137.8       111.0      116.8       115.5      116.4
            IV     120.1      140.3     116.8     138.3       111.6      115.1       117.2      115.9

        ANNUAL     118.2      139.8     118.2     137.7       111.4      116.5       114.7      115.8

  2002       I     122.5      142.3     116.1     139.3       112.1      113.7       119.9      116.0
            II     123.1      142.5     115.8     140.8       112.3      114.4       119.3      116.2
           III     124.8      144.4     115.6     141.5       112.3      113.4       121.4      116.3
            IV     124.9      145.0     116.1     142.8       112.7      114.3       120.9      116.8

        ANNUAL     123.8      143.5     115.9     141.1       112.3      113.9       120.4      116.3

  2003       I    r125.7     r145.7     115.9     144.2       112.7     r114.7      r121.6      117.3
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2001       I      -1.5       -1.0       0.4       3.1        -0.6        4.7         1.1        3.4
            II      -0.2       -2.8      -2.6       0.5        -2.7        0.7         4.9        2.2
           III       1.8       -0.9      -2.6       0.9         0.0       -0.9         6.8        1.8
            IV       7.6        3.5      -3.8       1.4         1.9       -5.8         6.1       -1.6

        ANNUAL       1.1       -0.2      -1.3       2.9         0.2        1.8         2.4        2.0

  2002       I       8.3        5.9      -2.2       3.0         1.8       -4.9         9.5        0.3
            II       1.8        0.6      -1.2       4.3         0.7        2.4        -2.1        0.7
           III       5.8        5.3      -0.5       2.2         0.1       -3.4         7.0        0.5
            IV       0.3        1.7       1.5       3.6         1.6        3.3        -1.4        1.5

        ANNUAL       4.8        2.7      -2.0       2.5         0.9       -2.2         5.0        0.4

  2003       I      r2.5       r2.0      -0.5      r3.8        r0.0       r1.3        r2.4       r1.7
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2001       I       1.9        1.4      -0.5       4.5         1.1        2.6         1.4        2.2
            II       0.2       -0.7      -0.9       3.9         0.5        3.6        -0.4        2.1
           III       0.5       -1.0      -1.5       2.0        -0.6        1.5         3.8        2.3
            IV       1.9       -0.3      -2.2       1.5        -0.3       -0.4         4.7        1.4

        ANNUAL       1.1       -0.2      -1.3       2.9         0.2        1.8         2.4        2.0

  2002       I       4.3        1.4      -2.8       1.4         0.2       -2.8         6.8        0.7
            II       4.8        2.3      -2.5       2.4         1.1       -2.3         5.0        0.3
           III       5.9        3.8      -1.9       2.7         1.1       -3.0         5.1        0.0
            IV       4.0        3.4      -0.6       3.3         1.0       -0.7         3.2        0.7

        ANNUAL       4.8        2.7      -2.0       2.5         0.9       -2.2         5.0        0.4

  2003       I      r2.6       r2.4      -0.2       3.5         0.6       r0.9        r1.4        1.1
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       June 4, 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     116.7      140.7     120.6     136.3       110.9      116.8       113.8      115.7
            II     116.6      139.7     119.8     136.3       110.1      116.9       115.3      116.3
           III     117.2      139.4     118.9     136.7       110.1      116.6       117.2      116.8
            IV     119.3      140.4     117.7     137.2       110.7      115.0       119.2      116.5

        ANNUAL     117.5      140.1     119.2     136.6       110.5      116.3       116.4      116.3

  2002       I     121.8      142.5     117.0     138.1       111.1      113.4       121.7      116.4
            II     122.3      142.9     116.8     139.5       111.3      114.1       121.7      116.8
           III     123.9      144.7     116.8     140.1       111.2      113.1       123.5      116.9
            IV     124.2      145.3     117.0     141.5       111.7      113.9       123.1      117.3

        ANNUAL     123.1      143.9     116.9     139.8       111.3      113.6       122.5      116.9

  2003       I    r124.8     r146.0     117.0     142.7       111.6     r114.4      r123.6     r117.7
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2001       I      -1.4       -0.9       0.5       2.8        -0.9        4.3         1.5        3.3
            II      -0.1       -2.7      -2.6       0.1        -3.0        0.3         5.1        2.0
           III       2.1       -0.8      -2.9       1.0         0.1       -1.1         6.8        1.7
            IV       7.2        2.9      -4.0       1.5         2.1       -5.4         6.9       -1.0

        ANNUAL       1.1       -0.1      -1.2       2.7        -0.1        1.6         2.5        1.9

  2002       I       8.6        6.2      -2.3       2.9         1.6       -5.3         8.8       -0.2
            II       1.7        0.9      -0.7       4.0         0.4        2.3         0.1        1.4
           III       5.5        5.2      -0.2       1.8        -0.3       -3.4         6.1        0.1
            IV       0.7        1.7       0.9       3.9         1.9        3.2        -1.4        1.4

        ANNUAL       4.8        2.7      -2.0       2.4         0.8       -2.3         5.3        0.5

  2003       I      r1.9       r1.8      -0.1      r3.4       r-0.4       r1.5        r1.7       r1.5
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2001       I       1.7        1.4      -0.3       4.2         0.8        2.4         1.4        2.1
            II       0.2       -0.6      -0.8       3.7         0.3        3.5        -0.3        2.1
           III       0.6       -0.8      -1.4       1.8        -0.9        1.2         3.8        2.2
            IV       1.9       -0.4      -2.3       1.4        -0.4       -0.5         5.1        1.5

        ANNUAL       1.1       -0.1      -1.2       2.7        -0.1        1.6         2.5        1.9

  2002       I       4.4        1.3      -2.9       1.4         0.2       -2.9         6.9        0.6
            II       4.9        2.3      -2.5       2.3         1.0       -2.4         5.6        0.5
           III       5.7        3.8      -1.8       2.5         0.9       -3.0         5.4        0.1
            IV       4.1        3.5      -0.6       3.2         0.9       -0.9         3.3        0.7

        ANNUAL       4.8        2.7      -2.0       2.4         0.8       -2.3         5.3        0.5

  2003       I      r2.4       r2.4       0.0       3.3         0.4       r0.8        r1.6       r1.1
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       June 4, 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            135.2        132.8         98.2        133.0          107.4          98.4
           III            136.2        131.1         96.3        133.3          107.4          97.9
            IV            137.5        129.1         93.9        134.3          108.4          97.7

        ANNUAL            136.0        132.0         97.1        133.1          107.7          97.9

  2002       I            140.1        129.5         92.4        135.6          109.1          96.8
            II            141.5        130.6         92.3        137.2          109.4          96.9
           III            143.4        131.6         91.7        137.7          109.2          96.0
            IV            143.3        130.3         91.0        139.5          110.1          97.4

        ANNUAL            142.1        130.5         91.8        137.5          109.4          96.8

  2003       I           r143.9        130.1         90.4       r141.1         r110.3          98.0
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.1         -7.6         -5.6          1.6           -2.1           3.7
            II              0.0         -6.2         -6.2          3.1           -0.2           3.1
           III              3.0         -4.9         -7.6          1.0            0.1          -1.9
            IV              3.9         -6.1         -9.7          2.9            3.5          -1.0

        ANNUAL              0.8         -4.9         -5.6          1.5           -1.2           0.8

  2002       I              7.8          1.2         -6.1          3.8            2.6          -3.7
            II              4.2          3.5         -0.7          5.0            1.4           0.7
           III              5.5          3.0         -2.4          1.4           -0.8          -3.9
            IV             -0.5         -3.7         -3.2          5.4            3.4           5.9

        ANNUAL              4.5         -1.1         -5.4          3.3            1.6          -1.2

  2003       I             r1.9        r-0.7         -2.6         r4.5           r0.7          r2.6
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              1.2         -2.4         -3.6          0.5           -2.9          -0.7
            II              0.2         -5.0         -5.2          2.9           -0.5           2.6
           III              0.6         -5.9         -6.4          0.8           -1.8           0.2
            IV              1.2         -6.2         -7.3          2.1            0.3           1.0

        ANNUAL              0.8         -4.9         -5.6          1.5           -1.2           0.8

  2002       I              3.6         -4.0         -7.4          2.7            1.5          -0.9
            II              4.7         -1.7         -6.1          3.2            1.9          -1.5
           III              5.3          0.3         -4.8          3.3            1.6          -2.0
            IV              4.2          1.0         -3.1          3.9            1.6          -0.3

        ANNUAL              4.5         -1.1         -5.4          3.3            1.6          -1.2

  2003       I              2.8          0.5         -2.2          4.1           r1.1           1.3
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                June 4, 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          86.7
            II            148.8        154.9        104.1        130.5          105.4          87.7
           III            149.6        151.8        101.4        130.2          104.9          87.0
            IV            151.0        148.6         98.5        131.8          106.4          87.3

        ANNUAL            149.6        153.4        102.5        130.4          105.5          87.2

  2002       I            154.7        149.4         96.5        132.7          106.7          85.8
            II            156.8        151.2         96.4        134.8          107.5          86.0
           III            159.8        152.6         95.5        135.2          107.3          84.6
            IV            160.7        151.5         94.2        137.3          108.4          85.4

        ANNUAL            158.0        151.2         95.7        135.0          107.5          85.4

  2003       I           r161.6       r151.5        r93.8       r138.8         r108.5          85.9
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.1         -8.9         -6.9          3.1           -0.6           5.3
            II             -1.4         -8.2         -6.9          3.6            0.3           5.1
           III              2.4         -7.9        -10.0         -1.0           -1.9          -3.3
            IV              3.5         -8.0        -11.2          5.0            5.6           1.5

        ANNUAL             -0.1         -6.3         -6.2          0.9           -1.9           0.9

  2002       I             10.4          2.1         -7.5          2.8            1.5          -6.9
            II              5.5          4.9         -0.5          6.7            3.0           1.1
           III              7.9          3.8         -3.8          1.2           -1.0          -6.2
            IV              2.3         -2.9         -5.1          6.3            4.3           4.0


        ANNUAL              5.6         -1.5         -6.7          3.5            1.9          -2.0

  2003       I             r2.1         r0.1         -2.0         r4.3           r0.4           2.1
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              0.5         -2.9         -3.3         -1.1           -4.3          -1.6
            II             -0.8         -6.3         -5.5          2.3           -1.0           3.2
           III             -0.4         -7.8         -7.4         -0.3           -2.9           0.1
            IV              0.6         -8.2         -8.8          2.6            0.8           2.1

        ANNUAL             -0.1         -6.3         -6.2          0.9           -1.9           0.9

  2002       I              3.6         -5.6         -8.9          2.6            1.3          -1.0
            II              5.4         -2.4         -7.4          3.3            2.0          -2.0
           III              6.8          0.5         -5.9          3.9            2.3          -2.7
            IV              6.5          1.9         -4.3          4.2            1.9          -2.1

        ANNUAL              5.6         -1.5         -6.7          3.5            1.9          -2.0

  2003       I             r4.4         r1.4         -2.9         r4.6            1.7           0.2
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                June 4, 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            123.6        111.7         90.4        135.5          109.4         109.7
           III            124.3        111.3         89.5        137.2          110.5         110.3
            IV            125.5        110.1         87.8        137.1          110.6         109.2

        ANNUAL            124.1        111.5         89.8        136.1          110.1         109.7

  2002       I            126.8        110.2         86.9        139.1          111.9         109.7
            II            127.7        110.8         86.7        139.8          111.5         109.5
           III            128.4        111.4         86.7        140.5          111.4         109.4
            IV            127.1        110.1         86.6        142.0          112.1         111.7

        ANNUAL            127.5        110.6         86.7        140.3          111.7         110.1

  2003       I           r127.8       r109.7         85.9       r143.6         r112.3        r112.4
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.5         -6.0         -3.6         -0.8           -4.4           1.8
            II              1.3         -3.8         -5.0          2.3           -0.9           0.9
           III              2.6         -1.4         -3.8          5.1            4.1           2.4
            IV              3.6         -4.0         -7.4         -0.3            0.2          -3.8

        ANNUAL              1.6         -3.2         -4.7          2.9            0.1           1.3

  2002       I              4.3          0.3         -3.9          6.0            4.7           1.6
            II              2.9          1.9         -0.9          2.2           -1.3          -0.7
           III              2.4          2.3         -0.1          1.9           -0.2          -0.4
            IV             -4.1         -4.6         -0.5          4.3            2.3           8.9

        ANNUAL              2.7         -0.8         -3.4          3.1            1.5           0.4

  2003       I             r2.2        r-1.2        r-3.4         r4.8           r0.9          r2.5
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              2.1         -1.9         -3.9          3.1           -0.3           1.0
            II              1.5         -3.4         -4.8          3.9            0.5           2.4
           III              1.5         -3.5         -4.9          3.0            0.3           1.5
            IV              1.2         -3.8         -5.0          1.5           -0.3           0.3

        ANNUAL              1.6         -3.2         -4.7          2.9            0.1           1.3

  2002       I              3.0         -2.2         -5.0          3.2            2.0           0.2
            II              3.4         -0.8         -4.0          3.2            1.9          -0.2
           III              3.3          0.1         -3.1          2.4            0.8          -0.9
            IV              1.3         -0.1         -1.4          3.6            1.3           2.3

        ANNUAL              2.7         -0.8         -3.4          3.1            1.5           0.4

  2003       I             r0.8        r-0.4         -1.2         r3.3           r0.4          r2.5
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                June 4, 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    118.8    147.9     124.6    131.3     106.9     110.6    111.6    110.8     93.1    109.3
            II    119.4    147.8     123.7    131.9     106.5     110.4    113.5    111.3     95.4    109.9
           III    120.4    147.7     122.7    132.7     106.9     110.3    115.5    111.7     97.9    110.5
            IV    123.5    149.6     121.2    133.6     107.8     108.2    114.1    109.8    107.6    109.6

        ANNUAL    120.5    148.2     123.0    132.4     107.0     109.9    113.7    110.9     98.5    109.8

  2002       I    124.9    150.8     120.8    134.7     108.4     107.9    114.0    109.5    107.6    109.4
            II    126.7    152.8     120.6    136.2     108.6     107.5    114.5    109.4    107.8    109.3
           III    127.7    153.4     120.1    137.2     108.8     107.4    115.4    109.6    104.6    109.1
            IV    129.3    155.1     120.0    138.8     109.6     107.4    114.7    109.3    109.7    109.4

        ANNUAL    127.1    153.0     120.4    136.7     108.8     107.5    114.6    109.5    107.4    109.3

  2003       I    130.2    156.0     119.8    140.4     109.8     107.8    114.3    109.6    110.3    109.6
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2001       I     -2.6     -3.3      -0.7     -1.2      -4.8       1.4     10.1      3.7    -20.2      1.7
            II      2.2     -0.5      -2.7      1.8      -1.4      -0.4      7.1      1.6     10.0      2.2
           III      3.2     -0.3      -3.4      2.5       1.6      -0.6      7.2      1.5     10.8      2.2
            IV     10.7      5.4      -4.8      2.6       3.2      -7.3     -4.9     -6.7     46.1     -3.3

        ANNUAL      1.4     -0.1      -1.5      2.5      -0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      4.7      3.3      -1.3      3.5       2.2      -1.2     -0.2     -0.9     -0.2     -0.8
            II      5.8      5.3      -0.5      4.5       0.9      -1.3      1.7     -0.5      0.9     -0.3
           III      3.4      1.7      -1.6      2.9       0.7      -0.5      3.1      0.5    -11.2     -0.5
            IV      5.0      4.5      -0.5      4.9       2.8      -0.1     -2.3     -0.7     20.8      0.9

        ANNUAL      5.5      3.2      -2.2      3.3       1.7      -2.1      0.9     -1.3      9.0     -0.5

  2003       I      2.9      2.4      -0.5      4.7       0.8       1.7     -1.3      0.9      2.2      1.0
  ----------------------------------------------------------------------------------------------------------
                          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      0.9     -0.1      -1.0      3.2      -0.2       2.3      6.8      3.5    -19.7      1.3
           III      0.7     -1.1      -1.8      1.8      -0.9       1.1      7.8      2.9    -10.6      1.7
            IV      3.3      0.3      -2.9      1.4      -0.4      -1.8      4.7      0.0      9.2      0.7

        ANNUAL      1.4     -0.1      -1.5      2.5      -0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      5.2      1.9      -3.0      2.6       1.4      -2.4      2.2     -1.2     15.5      0.0
            II      6.1      3.4      -2.5      3.3       2.0      -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      4.7      3.7      -1.0      3.9       1.6      -0.8      0.6     -0.4      1.9     -0.2

        ANNUAL      5.5      3.2      -2.2      3.3       1.7      -2.1      0.9     -1.3      9.0     -0.5

  2003       I      4.3      3.4      -0.8      4.2       1.3      -0.1      0.3      0.0      2.5      0.3
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        June 4, 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
-1.5 and +1.6 index points approximately 95 percent of the time.  This
interval is based on the performance of this measure between the fourth
quarter of 1995 and the fourth quarter of 2002.



                            Footnotes, Tables 1-6

(1)  Wages and salaries of employees plus employers' contributions for social
     insurance and private benefit plans.  Except for nonfinancial
     corporations, where there are no self-employed, data also include an
     estimate of wages, salaries, and supplemental payments for the self-
     employed.

(2)  The change for recent quarters is based on the Consumer Price Index for
     all urban consumers (CPI-U).  The trend from 1978-2002 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.