USDL 98-442
TRANSMISSION OF THIS
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TUESDAY, NOVEMBER 10, 1998.
                              
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                           PRODUCTIVITY AND COSTS
                             Third Quarter 1998


     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 1998.  The preliminary seasonally-adjusted
annual rates of productivity growth in the third quarter were:

               2.4 percent in the business sector, and
               2.3 percent in the nonfarm business sector.

In both the business and the nonfarm business sectors, productivity increases
in the third quarter were larger than those recorded in the second quarter of
1998 (as revised).

     In manufacturing, productivity increases in the third quarter were:

               3.7 percent in manufacturing,
               5.4 percent in durable goods manufacturing, and
               1.7 percent in nondurable goods manufacturing.

     The 3.7 percent rise in manufacturing productivity occurred as output
dropped slightly and hours of all persons working in the sector fell more.
Output and hours in manufacturing, which includes about 18 percent of U.S.
business sector employment, tend to vary more from quarter to quarter than
data for the more aggregate business and nonfarm business sectors.  Third-
quarter measures are summarized in table A and appear in detail in tables 1
through 5.

     The data sources and methods used in the preparation of the
manufacturing series differ from those used in preparing the business and
nonfarm business series, and these measures are not directly comparable.
Output measures for business and nonfarm business are based on measures of
gross domestic product prepared by the Bureau of Economic Analysis of the
U.S. Department of Commerce.  Quarterly output measures for manufacturing
reflect indexes of industrial production independently prepared by the Board
of Governors of the Federal Reserve System.  See Technical Notes for further
information on data sources.

------------------------------------------------------------------------
Table A. Productivity and costs: Preliminary third-quarter 1998 measures
(Seasonally adjusted annual rates)
------------------------------------------------------------------------                                                            
                                                         Real      
                                               Hourly    hourly    Unit
                   Produc-                     compen-   compen-   labor
  Sector           tivity    Output    Hours   sation    sation    costs
------------------------------------------------------------------------                   
                      Percent change from preceding quarter
 Business           2.4       3.5       1.1     3.8       1.9       1.4
 Nonfarm business   2.3       3.5       1.2     4.0       2.2       1.7
 Manufacturing      3.7      -0.6      -4.1     2.9       1.1      -0.7
   Durable          5.4       1.8      -3.4     1.2      -0.6      -4.0
   Nondurable       1.7      -3.5      -5.1     5.6       3.7       3.8
------------------------------------------------------------------------
                      Percent change from same quarter a year ago
 Business           1.8       4.0       2.1     4.5       2.9       2.6
 Nonfarm business   1.7       4.0       2.3     4.4       2.8       2.6
 Manufacturing      3.1       2.6      -0.5     4.4       2.7       1.3
  Durable           4.6       4.3      -0.3     3.8       2.2      -0.7
  Nondurable        1.2       0.6      -0.7     5.2       3.6       4.0
------------------------------------------------------------------------


Business

     From the second quarter to the third quarter of 1998, business sector
productivity increased at a 2.4 percent annual rate.  Output rose 3.5
percent, while hours of all persons engaged in the sector went up 1.1 percent
(seasonally adjusted annual rates).  The increase in hours of all persons in
the business sector reflected an employment increase of 2.1 percent and a
drop in average weekly hours of 1.0 percent.  Average weekly hours in the
business sector have fallen in four of the last five quarters.  After
revisions, second-quarter productivity in the business sector rose 0.1
percent, as output and hours both increased 1.7 percent (tables B and 1).

     Hourly compensation increased 3.8 percent during the third quarter of
1998.  This marks the third consecutive quarter in which the increase in
hourly compensation was smaller than in the previous quarter--hourly
compensation rose 4.1 percent in the second quarter of 1998.  This measure
includes wages and salaries, supplements, employer contributions to employee
benefit plans, and taxes.  Real hourly compensation, which takes into account
changes in the Consumer Price Index for All Urban Consumers (CPI-U),
increased 1.9 percent in the third quarter, about the same as the 2.0-percent
increase posted in the previous quarter.

     Unit labor costs, which reflect changes in both hourly compensation and
productivity, increased at a 1.4 percent annual rate during the third
quarter.  During the previous quarter, these costs had risen 4.0 percent.
The implicit price deflator for the business sector increased at a 0.3
percent annual rate in both the second and third quarters.  This measure has
increased less than 1.0 percent for four consecutive quarters as declines in
unit nonlabor payments, which account for about one-third of all payments,
have somewhat offset rises in unit labor costs.


Nonfarm business

     Productivity rose 2.3 percent in the nonfarm business sector during the
third quarter of 1998.  The increase in labor productivity in the third
quarter occurred as output rose 3.5 percent and hours of all persons grew by
1.2 percent.  In the previous quarter, productivity had risen 0.3 percent as
output grew 1.7 percent and hours increased 1.5 percent (table 2).

     Hourly compensation increased at a 4.0 percent annual rate in both the
second and third quarters, down somewhat from the 4.6 percent rise in the
first quarter.  When the rise in the CPI-U is taken into account, real hourly
compensation rose at a 2.2 percent annual rate during the July-September
period.
   
   Unit labor costs increased 1.7 percent during the third quarter of 1998.
In the second quarter, unit labor costs in the nonfarm business sector rose
3.7 percent.  The implicit price deflator for nonfarm business output rose
0.6 percent in the third quarter.


Manufacturing

     Productivity increased 3.7 percent in manufacturing in the third quarter
of 1998, as output dipped by 0.6 percent and hours of all persons fell 4.1
percent (seasonally adjusted annual rates).  The third-quarter decline in
output marks the first time output fell in the sector since a 10.0-percent
drop was recorded in the first quarter of 1991.  Third-quarter growth rates
in productivity and output were quite different in the durable and nondurable
manufacturing sectors.  In the durable goods sector, third-quarter
productivity rose by 5.4 percent as output increased 1.8 percent and hours of
all persons fell 3.4 percent.  Labor productivity also increased in the
nondurable goods sector during the third quarter, 1.7 percent, as output
dropped 3.5 percent and hours of all persons dropped more, 5.1 percent.
Nondurable goods output also dropped in the second quarter, by 1.3 percent
(tables 3, 4, and 5).

     Hourly compensation of manufacturing workers increased an average of 2.9
percent during the third quarter, after rising 2.6 percent in the previous
quarter (seasonally adjusted annual rates). In the third quarter, hourly
compensation grew 1.2 percent in durable goods and 5.6 percent in nondurable
goods.  When the increase in the CPI-U is taken into account, real hourly
compensation in total manufacturing rose 1.1 percent in the third quarter.

     Unit labor costs fell 0.7 percent in the third quarter of 1998, the
first decline in a year.  This decline in unit labor costs reflects a drop of
4.0 percent in durable goods industries and an increase of 3.8 percent in the
smaller nondurable goods sector.


Revised Measures

     Current and previous measures for the second quarter of 1998 for the
business, nonfarm business, and manufacturing sectors are compared in table B.
In the business and nonfarm business sectors, the quarterly movements in
output per hour and output are slightly higher, and unit labor costs
correspondingly lower, than those reported on Sept. 3, based on information
then available.  Conversely, productivity and output movements in the
manufacturing sector were revised slightly downward and unit labor costs
upward, based on newer information from the Federal Reserve Board's Indexes
of Industrial Production.

--------------------------------------------------------------------
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 1998
Business:                                                      
  Previous         -0.2      1.4      1.7     4.1      2.0       4.3
  Current           0.1      1.7      1.7     4.1      2.0       4.0
Nonfarm business:                                              
  Previous          0.1      1.6      1.5     4.0      2.0       3.9
  Current           0.3      1.7      1.5     4.0      2.0       3.7
Manufacturing:                                                 
  Previous          2.5      1.0     -1.4     2.6      0.6       0.1
  Current           2.3      0.8     -1.4     2.6      0.6       0.3
--------------------------------------------------------------------


Revised measures: Nonfinancial Corporations
   
    Second quarter 1998 productivity and cost measures for nonfinancial
corporations also were revised to incorporate more recent information than
was available on Sept. 3.  Small upward revisions were made to productivity
and output, with a corresponding downward revision to unit labor costs.  Unit
profits show less of a decline than originally reported (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 1998
Previous     2.8      3.7     0.9    4.6      2.5     1.8    -10.6     -0.2
Current      3.1      4.0     0.9    4.6      2.5     1.5     -7.7     -0.1
-----------------------------------------------------------------------------   
   
                                      
                                      
                              Next release date
   
   The next release of Productivity and Costs is scheduled for 10:00 AM EST,
Thursday, Dec. 3, 1998.  Third-quarter measures for nonfinancial corporations
and revised third-quarter measures for business, nonfarm business, and
manufacturing will be released at that time.

                                TECHNICAL NOTES
                                      
                                      
                                      
 Labor  Hours:  The primary source of hours and employment  data  is  the  BLS
 Current  Employment Statistics (CES) program, which provides  monthly  survey
 data on total employment and average weekly paid hours of production and non-
 supervisory  workers  in  nonagricultural establishments.  Jobs  rather  than
 persons  are counted. Weekly paid hours are adjusted to hours at  work  using
 the BLS Hours at Work survey, conducted for this purpose.
       Data  from  the BLS Current Population Survey (CPS) are used  for  farm
 labor; in the nonfarm sector, the National Income and Product Accounts (NIPA)
 prepared  by the Bureau of Economic Analysis (BEA) of the Department  of Com-
 merce and the CPS are used to measure labor input for government enterprises,
 proprietors, and unpaid family workers.
 
 Output: Business sector output is an annual-weighted index constructed  after
 excluding  from  gross domestic product (GDP) the following outputs:  General
 government, nonprofit institutions, paid employees of private households, and
 the  rental value of owner-occupied dwellings. Corresponding exclusions  also
 are  made in labor inputs. Business output accounted for about 76 percent  of
 the  value  of  GDP  in 1992. Nonfarm business, which also excludes  farming,
 accounted for about 75 percent of GDP in 1992.
      Annual manufacturing indexes are constructed by deflating current-dollar
 industry  value  of production data from the U.S. Bureau of the  Census  with
 deflators  from  the BEA.  These deflators are based on  data  from  the  BLS
 producer  price  program  and  other sources.   The  industry  shipments  are
 aggregated  using annual weights, and intrasector transactions  are  removed.
 Quarterly  manufacturing output measures are based on the index of industrial
 production prepared monthly by the Board of Governors of the Federal  Reserve
 System  adjusted to be consistent with annual indexes of manufacturing sector
 output  prepared  by  BLS.   Durables  include  the  following  2-digit   SIC
 industries:   Primary  metal  industries;  fabricated  metal  products;  non-
 electrical  machinery;  industrial  and  commercial  machinery  and  computer
 equipment;   electronic   and  other  electrical  equipment;   transportation
 equipment;  instruments; lumber and lumber products; furniture and  fixtures;
 stone, clay, and glass and concrete products; and miscellaneous manufactures.
 Nondurables  include:  Food and kindred products, tobacco  products,  textile
 mill  products,  apparel  products, paper and allied products,  printing  and
 publishing,  chemicals and chemical products, petroleum refining and  related
 industries, rubber and plastic products, and leather and leather products.
      Nonfinancial corporate output is an annual-weighted index constructed by
 excluding  from  GDP  the  following outputs: General  government;  nonprofit
 institutions; employees of private households; the rental value  of owner-oc-
 cupied  dwellings; unincorporated business; and those corporations which  are
 depository  institutions, nondepository institutions, security and  commodity
 brokers,  insurance  carriers, regulated investment offices,  small  business
 investment   offices,   and  real  estate  investment  trusts.   Nonfinancial
 corporations accounted for about 52 percent of the value of GDP in 1992.
 
 Productivity:  These productivity measures describe the relationship  between
 real  output  and the labor time involved in its production.  They  show  the
 changes  from  period to period in the amount of goods and services  produced
 per  hour.  Although these measures relate output to hours  at  work  of  all
 persons engaged in a sector, they do not measure the specific contribution of
 labor,  capital, or any other factor of production. Rather, they reflect  the
 joint  effects  of many influences, including changes in technology;  capital
 investment; level of output; utilization of capacity, energy, and  materials;
 the organization of production; managerial skill; and the characteristics and
 effort of the work force.
 
       Information  in this release will be made available to sensory-impaired
 individuals upon request. Voice phone: 202-606-STAT; TDD phone: 202-606-5897;
 TDD message referral phone number: 1-800-326-2577.
 
 

  Table 1. Business sector:   Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  1996       I     102.9      112.5     109.3     108.8        98.4      105.7       111.9      107.9
            II     103.8      114.2     110.0     110.3        98.9      106.3       112.1      108.4
           III     103.8      114.9     110.7     111.4        99.3      107.3       111.5      108.8
            IV     104.2      116.4     111.6     112.3        99.3      107.8       111.8      109.2

        ANNUAL     103.7      114.5     110.4     110.7        99.0      106.8       111.8      108.6

  1997       I     104.5      117.8     112.7     113.4        99.7      108.5       112.4      109.9
            II     105.0      119.1     113.4     114.1       100.0      108.7       113.1      110.3
           III     106.0      120.6     113.8     115.3       100.5      108.8       113.8      110.6
            IV     106.2      121.7     114.5     116.8       101.3      110.0       112.4      110.8

        ANNUAL     105.4      119.8     113.6     114.9       100.5      109.0       112.9      110.4

  1998       I     107.3      123.7     115.4     118.2       102.4      110.2       112.2      110.9
            II    r107.3     r124.3     115.8     119.4       102.9      111.3      r110.5      111.0
           III     107.9      125.4     116.2     120.5       103.4      111.6       110.0      111.1
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1996       I       4.4        4.5       0.1       2.5        -0.7       -1.9         8.5        1.9
            II       3.5        6.4       2.9       5.6         1.8        2.1         0.9        1.7
           III       0.1        2.5       2.4       4.0         1.5        3.8        -2.2        1.6
            IV       1.5        5.1       3.5       3.4         0.0        1.8         1.0        1.5

        ANNUAL       2.7        4.2       1.5       3.6         0.7        0.9         2.8        1.6

  1997       I       1.0        4.9       3.9       3.9         1.7        2.8         2.0        2.5
            II       2.0        4.7       2.6       2.6         1.3        0.6         2.8        1.4
           III       3.7        4.9       1.2       4.1         2.1        0.4         2.2        1.1
            IV       0.9        3.6       2.7       5.3         3.1        4.4        -4.8        0.9

        ANNUAL       1.7        4.6       2.9       3.8         1.5        2.1         1.0        1.7

  1998       I       4.1        7.1       2.9       4.9         4.4        0.8        -0.7        0.2
            II      r0.1       r1.7       1.7       4.1         2.0       r4.0       r-6.0       r0.3
           III       2.4        3.5       1.1       3.8         1.9        1.4        -1.5        0.3
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1996       I       2.5        3.2       0.7       3.0         0.2        0.6         3.3        1.6
            II       3.1        4.7       1.6       3.7         0.8        0.6         3.4        1.6
           III       2.8        4.2       1.4       4.0         1.0        1.1         2.4        1.6
            IV       2.4        4.6       2.2       3.9         0.7        1.5         2.0        1.7

        ANNUAL       2.7        4.2       1.5       3.6         0.7        0.9         2.8        1.6

  1997       I       1.5        4.7       3.2       4.2         1.2        2.6         0.4        1.8
            II       1.2        4.3       3.1       3.5         1.1        2.3         0.9        1.8
           III       2.1        4.9       2.8       3.5         1.3        1.4         2.0        1.6
            IV       1.9        4.5       2.6       4.0         2.0        2.0         0.5        1.5

        ANNUAL       1.7        4.6       2.9       3.8         1.5        2.1         1.0        1.7

  1998       I       2.6        5.1       2.3       4.2         2.7        1.5        -0.2        0.9
            II       2.1       r4.3       2.1       4.6         2.9        2.4       r-2.4        0.6
           III       1.8        4.0       2.1       4.5         2.9        2.6        -3.3        0.4
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 10, 1998 
  r=revised                                                              Source: Bureau of Labor Statistics



  Table 2. Nonfarm business sector:   Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  1996       I     103.0      112.8     109.4     108.6        98.3      105.4       112.3      107.9
            II     103.8      114.5     110.3     110.0        98.6      106.0       112.3      108.2
           III     103.8      115.2     111.0     111.0        98.9      107.0       111.6      108.6
            IV     104.1      116.6     112.0     112.0        98.9      107.5       112.2      109.2

        ANNUAL     103.7      114.8     110.7     110.4        98.7      106.5       112.1      108.5

  1997       I     104.2      117.9     113.1     113.1        99.4      108.5       112.8      110.0
            II     104.7      119.2     113.9     113.8        99.7      108.7       113.6      110.4
           III     105.6      120.6     114.2     114.9       100.2      108.8       114.5      110.8
            IV     105.9      121.8     115.1     116.3       100.9      109.9       113.3      111.1

        ANNUAL     105.1      119.9     114.1     114.5       100.1      109.0       113.6      110.6

  1998       I     106.8      123.9     116.0     117.6       101.9      110.2       113.2      111.2
            II     106.8      124.4    r116.4     118.8       102.4      111.2      r111.5      111.3
           III     107.4      125.5     116.8     120.0       102.9      111.6       111.1      111.5
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1996       I       4.1        4.2       0.0       2.6        -0.5       -1.5         7.4        1.7
            II       3.0        6.4       3.3       5.2         1.4        2.2        -0.1        1.3
           III       0.0        2.5       2.4       3.7         1.3        3.7        -2.3        1.4
            IV       1.2        5.0       3.7       3.3         0.0        2.1         2.3        2.2

        ANNUAL       2.4        4.1       1.6       3.5         0.6        1.1         2.0        1.4

  1997       I       0.5        4.5       4.1       4.0         1.8        3.6         2.2        3.1
            II       1.8        4.5       2.6       2.6         1.2        0.7         2.8        1.5
           III       3.6        4.8       1.2       3.9         2.0        0.3         3.1        1.4
            IV       0.9        4.0       3.0       4.9         2.8        4.0        -4.3        0.9

        ANNUAL       1.4        4.5       3.0       3.7         1.4        2.3         1.3        1.9

  1998       I       3.5        7.0       3.4       4.6         4.1        1.1        -0.3        0.6
            II      r0.3       r1.7       1.5       4.0         2.0       r3.7       r-5.7        0.2
           III       2.3        3.5       1.2       4.0         2.2        1.7        -1.5        0.6
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1996       I       2.4        3.2       0.8       3.0         0.2        0.6         2.7        1.4
            II       2.9        4.7       1.8       3.6         0.7        0.7         2.4        1.3
           III       2.4        4.1       1.6       3.8         0.8        1.3         1.4        1.3
            IV       2.1        4.5       2.4       3.7         0.5        1.6         1.7        1.7

        ANNUAL       2.4        4.1       1.6       3.5         0.6        1.1         2.0        1.4

  1997       I       1.2        4.6       3.4       4.1         1.1        2.9         0.5        2.0
            II       0.9        4.1       3.2       3.4         1.1        2.5         1.2        2.0
           III       1.8        4.7       2.9       3.5         1.2        1.7         2.6        2.0
            IV       1.7        4.4       2.7       3.9         1.9        2.1         0.9        1.7

        ANNUAL       1.4        4.5       3.0       3.7         1.4        2.3         1.3        1.9

  1998       I       2.4        5.1       2.6       4.0         2.5        1.5         0.3        1.1
            II       2.0       r4.4       2.3       4.4         2.7        2.3       r-1.9        0.8
           III       1.7        4.0       2.3       4.4         2.8        2.6        -3.0        0.6
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 10, 1998
  r=revised                                                              Source: Bureau of Labor Statistics
Table 3. Manufacturing sector:   Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  1996       I            112.9        115.8        102.6        109.2           98.8          96.8
            II            114.0        118.3        103.8        110.3           98.9          96.8
           III            115.2        119.9        104.1        111.2           99.1          96.5
            IV            116.3        121.2        104.3        111.9           98.9          96.2

        ANNUAL            114.6        118.8        103.7        110.7           99.0          96.6

  1997       I            117.1        123.0        105.1        113.0           99.3          96.5
            II            118.0        124.5        105.5        114.0           99.9          96.6
           III            120.1        126.4        105.2        115.5          100.7          96.2
            IV            121.5        128.9        106.1        117.8          102.2          96.9

        ANNUAL            119.2        125.7        105.5        115.1          100.6          96.6

  1998       I            121.9        129.6        106.3        119.0          103.1          97.6
            II           r122.6       r129.8        105.9        119.7          103.2          97.6
           III            123.7        129.6        104.8        120.6          103.5          97.5
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1996       I              6.2          2.6         -3.3         -0.1           -3.2          -6.0
            II              3.9          9.0          4.9          4.1            0.4           0.2
           III              4.3          5.4          1.1          3.1            0.7          -1.1
            IV              3.8          4.5          0.7          2.5           -0.9          -1.3

        ANNUAL              4.5          4.2         -0.4          2.2           -0.8          -2.3

  1997       I              2.8          6.2          3.3          4.2            2.0           1.3
            II              3.2          4.9          1.7          3.5            2.1           0.3
           III              7.3          6.1         -1.1          5.6            3.6          -1.6
            IV              4.9          8.2          3.1          8.0            5.8           3.0

        ANNUAL              4.0          5.8          1.7          4.0            1.7           0.0

  1998       I              1.4          2.2          0.8          4.1            3.6           2.7
            II             r2.3         r0.8         -1.4          2.6            0.6          r0.3
           III              3.7         -0.6         -4.1          2.9            1.1          -0.7
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1996       I              4.7          2.2         -2.4          1.9           -0.9          -2.7
            II              4.4          4.3         -0.1          2.1           -0.7          -2.2
           III              4.3          4.7          0.4          2.2           -0.7          -2.0
            IV              4.6          5.4          0.8          2.4           -0.8          -2.1

        ANNUAL              4.5          4.2         -0.4          2.2           -0.8          -2.3

  1997       I              3.7          6.3          2.5          3.5            0.5          -0.2
            II              3.5          5.3          1.7          3.3            1.0          -0.2
           III              4.2          5.4          1.1          3.9            1.7          -0.3
            IV              4.5          6.3          1.7          5.3            3.4           0.7

        ANNUAL              4.0          5.8          1.7          4.0            1.7           0.0

  1998       I              4.2          5.3          1.1          5.3            3.8           1.1
            II             r3.9          4.3          0.3          5.0            3.4          r1.1
           III              3.1          2.6         -0.5          4.4            2.7           1.3
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 10, 1998
  r=revised                                                       Source: Bureau of Labor Statistics



  Table 4. Durable manufacturing sector:   Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  1996       I            120.2        126.8        105.5        107.5           97.2          89.4
            II            122.0        131.1        107.4        108.5           97.2          88.9
           III            123.6        133.2        107.8        109.2           97.3          88.4
            IV            124.6        134.6        108.0        109.6           96.8          87.9

        ANNUAL            122.6        131.4        107.2        108.7           97.2          88.6

  1997       I            125.7        137.7        109.5        110.6           97.2          88.0
            II            127.4        140.4        110.2        111.5           97.7          87.5
           III            130.6        143.8        110.1        113.0           98.5          86.5
            IV            133.0        147.4        110.9        115.8          100.4          87.1

        ANNUAL            129.2        142.3        110.2        112.8           98.6          87.3

  1998       I            133.4        148.4        111.3        116.6          101.0          87.4
            II           r134.8       r149.3       r110.7        117.0         r100.9         r86.8
           III            136.6        150.0        109.8        117.4          100.7          85.9
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1996       I              8.8          5.9         -2.7         -2.8           -5.8         -10.7
            II              6.2         14.2          7.5          3.8            0.1          -2.2
           III              5.2          6.8          1.5          2.6            0.2          -2.5
            IV              3.6          4.3          0.7          1.4           -1.9          -2.1

        ANNUAL              6.2          7.1          0.9          0.8           -2.1          -5.0

  1997       I              3.5          9.4          5.7          3.9            1.6           0.3
            II              5.6          8.1          2.4          3.4            2.0          -2.0
           III             10.4         10.2         -0.2          5.5            3.5          -4.5
            IV              7.5         10.3          2.7         10.2            7.9           2.5

        ANNUAL              5.4          8.3          2.8          3.7            1.4          -1.6

  1998       I              1.2          2.6          1.4          2.6            2.1           1.4
            II             r4.5         r2.5         -1.8         r1.6          r-0.4         r-2.8
           III              5.4          1.8         -3.4          1.2           -0.6          -4.0
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1996       I              6.0          4.8         -1.2          0.4           -2.4          -5.3
            II              6.5          8.0          1.4          0.7           -2.1          -5.4
           III              6.2          8.0          1.7          0.9           -2.0          -5.0
            IV              5.9          7.7          1.7          1.2           -1.9          -4.4

        ANNUAL              6.2          7.1          0.9          0.8           -2.1          -5.0

  1997       I              4.6          8.6          3.8          2.9            0.0          -1.6
            II              4.5          7.1          2.6          2.8            0.5          -1.6
           III              5.7          8.0          2.1          3.5            1.3          -2.1
            IV              6.7          9.5          2.6          5.7            3.7          -0.9

        ANNUAL              5.4          8.3          2.8          3.7            1.4          -1.6

  1998       I              6.1          7.8          1.6          5.4            3.9          -0.7
            II             r5.8          6.4          0.5          4.9            3.2          -0.9
           III              4.6          4.3         -0.3          3.8            2.2          -0.7
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 10, 1998
  r=revised                                                       Source: Bureau of Labor Statistics


  Table 5. Nondurable manufacturing sector:   Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  1996       I            105.9        104.5         98.7        111.4          100.8         105.2
            II            106.4        105.3         99.0        112.6          100.9         105.8
           III            107.2        106.3         99.1        113.7          101.3         106.0
            IV            108.3        107.5         99.3        114.8          101.5         106.0

        ANNUAL            107.0        105.9         99.0        113.1          101.2         105.8

  1997       I            109.0        108.2         99.2        116.1          102.0         106.5
            II            109.2        108.5         99.4        117.1          102.6         107.2
           III            110.2        108.9         98.8        118.7          103.5         107.6
            IV            110.7        110.3         99.7        120.0          104.1         108.4

        ANNUAL            109.8        109.0         99.2        118.0          103.1         107.4

  1998       I            111.3        110.8         99.6        121.9          105.6         109.5
            II           r111.1        110.5         99.4        123.2          106.2        r110.9
           III            111.6        109.5         98.1        124.9          107.2         111.9
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1996       I              3.1         -1.2         -4.2          4.2            1.0           1.0
            II              1.8          3.1          1.2          4.1            0.4           2.3
           III              3.3          3.8          0.5          4.0            1.5           0.7
            IV              4.0          4.6          0.6          4.2            0.8           0.2

        ANNUAL              2.7          0.6         -2.1          4.1            1.1           1.4

  1997       I              2.7          2.5         -0.2          4.3            2.1           1.6
            II              0.5          1.2          0.6          3.5            2.2           3.0
           III              4.0          1.5         -2.4          5.6            3.6           1.5
            IV              1.7          5.5          3.7          4.6            2.5           2.9

        ANNUAL              2.6          2.9          0.2          4.3            1.9           1.6

  1998       I              2.0          1.8         -0.2          6.4            5.8           4.3
            II            r-0.4        r-1.3        r-0.9         r4.5            2.4          r4.9
           III              1.7         -3.5         -5.1          5.6            3.7           3.8
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1996       I              3.3         -1.0         -4.1          4.1            1.3           0.8
            II              2.3         -0.1         -2.3          4.1            1.2           1.8
           III              2.3          0.8         -1.5          4.1            1.2           1.8
            IV              3.0          2.5         -0.5          4.1            0.9           1.0

        ANNUAL              2.7          0.6         -2.1          4.1            1.1           1.4

  1997       I              2.9          3.5          0.5          4.2            1.2           1.2
            II              2.6          3.0          0.4          4.0            1.7           1.4
           III              2.8          2.4         -0.4          4.4            2.2           1.6
            IV              2.2          2.6          0.4          4.5            2.6           2.2

        ANNUAL              2.6          2.9          0.2          4.3            1.9           1.6

  1998       I              2.1          2.5          0.4          5.0            3.5           2.9
            II             r1.8         r1.8          0.0          5.2            3.6          r3.4
           III              1.2          0.6         -0.7          5.2            3.6           4.0
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 10, 1998
  r=revised                                                       Source: Bureau of Labor Statistics
Table 6. Nonfinancial corporations:   Productivity, hourly compensation, unit labor costs, unit profits,
  and prices, seasonally adjusted
 
                Output                      Hourly    Real                Unit     Total    Unit   Implicit
      Year      per all-                    compen-   hourly     Unit     non-     unit     pro-   price
      and       employee          Employee  sation    compen-    labor    labor    costs    fits   deflator
      quarter   hour      Output  hours      (1)      sation(2)  costs    costs(6) (7)      (8)      (4)
  ----------------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  1996       I    106.4    117.3     110.3    107.7      97.4     101.2     98.7    100.6    153.7    105.4
            II    107.2    119.3     111.2    109.0      97.7     101.7     97.9    100.7    154.1    105.5
           III    108.0    120.9     111.9    110.1      98.1     101.9     97.5    100.8    155.3    105.7
            IV    108.6    122.5     112.8    110.9      98.0     102.1     97.4    100.9    155.4    105.8

        ANNUAL    107.6    120.0     111.5    109.5      97.9     101.7     97.9    100.7    154.6    105.6

  1997       I    109.0    124.3     114.0    111.8      98.3     102.6     97.3    101.2    156.6    106.2
            II    109.7    126.2     115.1    112.6      98.6     102.6     97.1    101.2    157.3    106.3
           III    111.2    128.7     115.7    113.7      99.2     102.3     96.4    100.7    161.7    106.3
            IV    111.4    130.2     116.8    115.1      99.9     103.3     95.7    101.3    155.7    106.3

        ANNUAL    110.4    127.3     115.3    113.4      99.1     102.7     96.6    101.1    157.8    106.3

  1998       I    112.2    132.1     117.7    116.2     100.6     103.5     95.4    101.4    153.5    106.2
            II   r113.0   r133.4     118.0    117.5     101.2    r103.9     95.5   r101.7   r150.4    106.1
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  1996       I      1.2      1.4       0.2      1.7      -1.5       0.4     -0.7      0.1     13.1      1.7
            II      3.3      6.9       3.5      5.0       1.2       1.7     -2.9      0.5      1.1      0.6
           III      2.9      5.6       2.6      3.9       1.4       0.9     -1.7      0.3      3.0      0.6
            IV      2.1      5.5       3.3      2.9      -0.4       0.7     -0.5      0.4      0.3      0.4

        ANNUAL      2.8      4.5       1.7      3.1       0.2       0.3     -1.1     -0.1      7.7      0.9

  1997       I      1.5      5.9       4.3      3.6       1.3       2.0     -0.6      1.4      3.2      1.6
            II      2.5      6.3       3.8      2.6       1.3       0.2     -0.6      0.0      1.7      0.2
           III      5.6      8.2       2.4      4.2       2.2      -1.3     -3.1     -1.8     11.8      0.0
            IV      1.0      4.8       3.8      5.0       2.9       4.0     -2.7      2.3    -14.1     -0.1

        ANNUAL      2.6      6.1       3.5      3.6       1.2       1.0     -1.3      0.4      2.1      0.6

  1998       I      2.6      5.9       3.2      3.6       3.1       0.9     -1.1      0.4     -5.6     -0.4
            II     r3.1     r4.0       0.9      4.6       2.5      r1.5     r0.1     r1.1    r-7.7    r-0.1
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  1996       I      2.9      3.9       1.0      2.5      -0.3      -0.4     -0.6     -0.5     11.5      0.9
            II      3.2      4.9       1.7      3.1       0.2      -0.1     -1.6     -0.5     11.1      0.9
           III      2.6      4.4       1.8      3.4       0.5       0.8     -0.9      0.3      4.5      0.9
            IV      2.4      4.8       2.4      3.4       0.2       0.9     -1.4      0.3      4.3      0.8

        ANNUAL      2.8      4.5       1.7      3.1       0.2       0.3     -1.1     -0.1      7.7      0.9

  1997       I      2.5      5.9       3.4      3.8       0.9       1.3     -1.4      0.6      1.9      0.8
            II      2.3      5.8       3.5      3.2       0.9       1.0     -0.8      0.5      2.0      0.7
           III      2.9      6.4       3.4      3.3       1.1       0.4     -1.2      0.0      4.2      0.5
            IV      2.6      6.3       3.5      3.9       1.9       1.2     -1.8      0.5      0.2      0.4

        ANNUAL      2.6      6.1       3.5      3.6       1.2       1.0     -1.3      0.4      2.1      0.6

  1998       I      2.9      6.3       3.3      3.9       2.4       0.9     -1.9      0.2     -2.0     -0.1
            II     r3.1     r5.7       2.6      4.3       2.7      r1.2    r-1.7     r0.5    r-4.3    r-0.1
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        November 10, 1998
  r=revised                                                               Source: Bureau of Labor Statistics


SOURCES:  Output data are from the Bureau of Economic Analysis and the Census
Bureau of the U.S. Department of Commerce; the Bureau of Labor Statistics,
U.S. Department of Labor; and the Federal Reserve Board.  Compensation and
hours data are from the Bureau of Labor Statistics  and the Bureau of
Economic Analysis.

RELIABILITY:  Productivity and cost measures are regularly revised as more
complete information becomes available.  The measures are first published 30
days after the close of the reference period; revisions appear 30 days later,
and second revisions after an additional 60 days.



                            Footnotes, Tables 1-6

(1)  Wages and salaries of employees plus employers' contributions for social
     insurance and private benefit plans.  Except for nonfinancial
     corporations, where there are no self-employed, data also include an
     estimate of wages, salaries, and supplemental payments for the self-
     employed.

(2)  Compensation per hour adjusted for changes in the Consumer Price Index
     for All Urban Consumers.

(3)  Unit nonlabor payments include profits, capital consumption allowances,
     interest, rental income of persons, and indirect taxes.

(4)  Current dollar output divided by the output index.

(5)  Quarterly changes:  Percent change compounded at annual rate from the
     original data rather than index numbers.  Annual changes:  Percent
     change between annual average levels.

(6)  Unit nonlabor costs include capital consumption allowances, interest,
     rental income of persons, and indirect taxes.  For nonfinancial
     corporations, rental income of persons is zero by definition.

(7)  Total unit costs are the sum of unit labor and nonlabor costs.

(8)  Unit profits include corporate profits with inventory valuation and
     capital consumption adjustments.