USDL 98-363
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 10:00 A.M. EDT,
THURSDAY, SEPTEMBER 3, 1998.

Internet address:       http://stats.bls.gov/lprhome.htm
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  information:          (202) 606-5606
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                           PRODUCTIVITY AND COSTS
                             Second Quarter 1998


     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 second quarter of 1998.  The seasonally-adjusted annual
rates of productivity change in the second quarter were:

              -0.2 percent in the business sector, and
               0.1 percent in the nonfarm business sector.

In both sectors, changes in productivity were revised upward compared with
results reported on Aug. 11, as increases in output were revised up and
increases in hours were revised down.  (See table C.)  Business sector
productivity declined in the second quarter of 1998 for the first time since
the first quarter of 1995, and output per hour increased slightly in the
nonfarm business sector.

     In manufacturing, the revised productivity changes in the second quarter
were:
               2.5 percent in manufacturing,
               4.7 percent in durable goods manufacturing, and
              -0.1 percent in nondurable goods manufacturing.

In manufacturing, the changes in productivity were revised downward compared
with preliminary estimates.  The second-quarter increase in manufacturing
output per hour resulted from a small increase in output, 1.0 percent,
combined with a 1.4 percent drop in hours worked in the sector (seasonally
adjusted annual rates).  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.  Second-quarter measures are summarized in table A and
appear in detail in tables 1 through 5; the differences between these
measures and the preliminary second-quarter figures issued on Aug. 11 are
shown in table C.

     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 second-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           -0.2       1.4      1.7     4.1        2.0      4.3
Nonfarm business    0.1       1.6      1.5     4.0        2.0      3.9
Manufacturing       2.5       1.0     -1.4     2.6        0.6      0.1
  Durable           4.7       2.8     -1.8     1.5       -0.5     -3.0
  Nondurable       -0.1      -1.1     -1.0     4.4        2.4      4.5
-----------------------------------------------------------------------
                      Percent change from same quarter a year ago
Business            2.1       4.2      2.1     4.6        2.9      2.4
Nonfarm business    2.0       4.3      2.3     4.4        2.7      2.3
Manufacturing       4.0       4.3      0.3     5.0        3.4      1.0
  Durable           5.9       6.4      0.5     4.9        3.2     -0.9
  Nondurable        1.9       1.9      0.0     5.2        3.6      3.3
-----------------------------------------------------------------------

Business

     From the first quarter to the second quarter of 1998, business sector
productivity fell at a 0.2 percent annual rate, as output rose 1.4 percent
and hours of all persons engaged in the sector rose faster, 1.7 percent
(table A).  During the first quarter of 1998, productivity had increased 4.1
percent in the business sector, as strong output growth, at 7.1 percent,
combined with a 2.9 percent growth in hours (table 1).

     The second-quarter 1998 increase of 4.1 percent in hourly compensation
marked the fourth consecutive quarter that the measure rose by more than 4.0
percent (seasonally adjusted annual rates).  Hourly compensation 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 at a
2.0 percent annual rate in the second quarter of 1998.

     Unit labor costs, which reflect changes in hourly compensation and
productivity, grew at a 4.3 percent annual rate during the second quarter,
compared with a 0.8 percent rise in the first quarter of 1998.  The implicit
price deflator for the business sector, which incorporates changes in both
unit labor costs and unit nonlabor payments, increased 0.2 percent in each of
the first two quarters of 1998 (seasonally adjusted annual rates).  A sharp
drop in unit nonlabor payments, 6.6 percent, offset the large rise in unit
labor costs in the second quarter.


Nonfarm business

     Productivity in the nonfarm business sector increased 0.1 percent during
the second quarter of 1998, as output increased 1.6 percent and hours of all
persons increased 1.5 percent (table A).  The output increase was the
smallest since a 0.5 percent increase in the second quarter of 1995.  In the
second quarter of 1998, output per hour was 2.0 percent higher than in the
second quarter of 1997 (table 2).

     Hourly compensation grew at a 4.0 percent annual rate in the second
quarter of 1998, following two quarters of even faster growth.  When the rise
in the CPI-U is taken into account, real hourly compensation increased 2.0
percent in the second quarter of 1998.

     In the second quarter of 1998, unit labor costs increased 3.9 percent,
unit nonlabor payments fell 6.2 percent, and the implicit price deflator for
nonfarm business output rose 0.2 percent (seasonally adjusted annual rates).


Manufacturing

     Productivity increased 2.5 percent in manufacturing in the second
quarter of 1998, as output grew 1.0 percent and hours of all persons fell 1.4
percent (seasonally adjusted annual rates).  The second-quarter increase in
output per hour was due entirely to a 4.7 percent productivity gain in the
durable goods sector, as output per hour declined 0.1 percent in the
nondurable goods sector (tables 3, 4, and 5).

     Hourly compensation of all manufacturing workers increased 2.6 percent
during the second quarter of 1998, reflecting a 1.5 percent rise in hourly
compensation in durable goods industries combined with a 4.4 percent increase
in the nondurable goods sector.  Real hourly compensation in the total
manufacturing sector rose 0.6 percent in the second quarter, reflecting a 0.5
percent decline in real hourly compensation in durable manufacturing and a
2.4 percent gain in nondurable manufacturing.

     Manufacturing unit labor costs edged up 0.1 percent in the second
quarter of 1998.  A 3.0 percent drop in unit labor costs in durable goods
industries offset a 4.5 percent increase in the smaller nondurable
manufacturing sector.


Nonfinancial corporations

     Preliminary second-quarter 1998 measures of productivity and costs also
were announced today for nonfinancial corporations (tables B and 6).
Productivity increased 2.8 percent during the second quarter, as output rose
3.7 percent and hours increased 0.9 percent (seasonally adjusted annual
rates).  Nonfinancial corporations include all corporations doing business in
the United States except those classified as depository institutions,
nondepository institutions, security and commodity brokers, insurance
carriers, regulated investment offices, small business investment offices,
and real estate investment trusts.

-------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Preliminary second-quarter 1998
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
1998 II   2.8     3.7     0.9     4.6     2.5     1.8   -10.6     -0.2
-------------------------------------------------------------------------
                 Percent change from same quarter a year ago
1998 II   3.0     5.6     2.6     4.3     2.7     1.3    -5.1     -0.2
-------------------------------------------------------------------------

     Hourly compensation rose 4.6 percent, and real hourly compensation
increased 2.5 percent in the second quarter of 1998.  This was the fourth
consecutive quarter that this measure grew at an annual rate of more than
2.0 percent (table 6).

     Unit labor costs for nonfinancial corporations increased 1.8 percent
in the second quarter of 1998.  Unit nonlabor costs rose 0.5 percent, the
first increase since the fourth quarter of 1995, and unit profits fell
10.6 percent.  The implicit price deflator for nonfinancial corporate
output declined 0.2 percent in the second quarter of 1998.


Revised Measures

     Current and previous measures for the second quarter of 1998 for the
business, nonfarm business, and manufacturing sectors are compared in
table C.  The quarterly movements differ from those reported on Aug. 11
based on information then available.  In the business and nonfarm business
sectors, changes in output (which are based on information from the national
income and product accounts prepared by the U.S. Department of Commerce) and
productivity were revised up, and the increase in hours was revised down.
Manufacturing output (which is based on information from the Federal Reserve
Board) and productivity 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
---------------------------------------------------------------------                                                               
                             Second quarter 1998
Business:                                                      
  Previous          -0.6      1.2      1.8    3.9      1.9      4.5
  Current           -0.2      1.4      1.7    4.1      2.0      4.3
Nonfarm business:                                             
  Previous          -0.2      1.3      1.6    3.8      1.8      4.1
  Current            0.1      1.6      1.5    4.0      2.0      3.9
Manufacturing:                                                 
  Previous           3.3      1.7     -1.5    2.5      0.5     -0.7
  Current            2.5      1.0     -1.4    2.6      0.6      0.1
---------------------------------------------------------------------


                              Next release date

     The next release of Productivity and Costs is scheduled for 10:00 AM
EST, Tuesday, Nov. 10, 1998.  Revised second-quarter measures for
nonfinancial corporations and preliminary 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    r107.2     r124.2    r115.8    r119.4       102.9     r111.3      r110.3      111.0
  ---------------------------------------------------------------------------------------------------------
                       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     r-0.2       r1.4      r1.7      r4.1        r2.0       r4.3       r-6.6       r0.2
  ---------------------------------------------------------------------------------------------------------
                      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      r2.1        4.2       2.1      r4.6         2.9       r2.4       r-2.5        0.6
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       September 3, 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    r106.8     r124.4     116.5    r118.8      r102.4     r111.2      r111.4      111.3
  ---------------------------------------------------------------------------------------------------------
                       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      r0.1       r1.6      r1.5      r4.0        r2.0       r3.9       r-6.2       r0.2
  ---------------------------------------------------------------------------------------------------------
                      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      r2.0       r4.3       2.3      r4.4         2.7       r2.3       r-2.0       r0.8
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       September 3, 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           r122.7       r129.9        105.9        119.7          103.2         r97.6
  --------------------------------------------------------------------------------------------------
                         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             r2.5         r1.0        r-1.4         r2.6           r0.6          r0.1
  --------------------------------------------------------------------------------------------------
                     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             r4.0         r4.3          0.3          5.0           r3.4          r1.0
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                September 3,  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           r134.9       r149.4       r110.8        117.0          100.8         r86.7
  --------------------------------------------------------------------------------------------------
                         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             r4.7         r2.8        r-1.8          1.5           -0.5         r-3.0
  --------------------------------------------------------------------------------------------------
                     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             r5.9         r6.4          0.5          4.9            3.2         r-0.9
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                September 3, 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           r111.2       r110.5         99.4        123.2          106.2        r110.8
  --------------------------------------------------------------------------------------------------
                         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-0.1        r-1.1        r-1.0          4.4           r2.4          r4.5
  --------------------------------------------------------------------------------------------------
                     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             r1.9         r1.9          0.0          5.2           r3.6          r3.3
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                September 3, 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    112.9    133.3     118.0    117.5     101.2     104.0     95.5    101.8    149.2    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      2.8      3.7       0.9      4.6       2.5       1.8      0.5      1.5    -10.6     -0.2
  ----------------------------------------------------------------------------------------------------------
                          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      3.0      5.6       2.6      4.3       2.7       1.3     -1.6      0.6     -5.1     -0.2
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        September 3, 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.