USDL 01-402
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 8:30 A.M. EST,
WEDNESDAY, NOVEMBER 7, 2001

Internet address:        http://www.bls.gov/lpc/
Historical, technical    
  information:           (202) 691-5606
Current data:            (202) 691-5200
Media contact:           (202) 691-5902
                                      
                                      
                           PRODUCTIVITY AND COSTS
                             Third Quarter 2001


   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 2001.  The preliminary seasonally-adjusted
annual rates of productivity growth in the third quarter were:

               2.2 percent in the business sector and
               2.7 percent in the nonfarm business sector.

In both the business and the nonfarm business sectors, productivity increases
in the third quarter occurred because hours fell more than output (table A).

   The tragic events of September 11 occurred late in the reference period
for the productivity and costs measures.  BLS has made small downward
adjustments to the hours of employees of private nonfarm businesses in the
third quarter in order to be consistent with the output and compensation
measures from the Bureau of Economic Analysis.  See Adjustments for further
information.

   In manufacturing, productivity increases in the third quarter were:

               1.1 percent in manufacturing,
               2.5 percent in durable goods manufacturing, and
              -1.3 percent in nondurable goods manufacturing.

   The increase in manufacturing productivity compares with a 0.9-percent
rate reported for the previous quarter (as revised).  Output and hours in
manufacturing, which includes about 16 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 2001 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           2.2      -1.0      -3.1      4.1       3.4       1.9
 Nonfarm business   2.7      -1.0      -3.6      4.5       3.8       1.8
 Manufacturing      1.1      -6.7      -7.7      5.1       4.4       4.0
   Durable          2.5      -7.7     -10.0      5.6       4.9       3.1
   Nondurable      -1.3      -5.4      -4.1      4.8       4.1       6.1
-------------------------------------------------------------------------
                      Percent change from same quarter a year ago

 Business           1.9       0.4      -1.5      6.0       3.3       4.1
 Nonfarm business   1.8       0.4      -1.4      5.8       3.0       3.9
 Manufacturing      0.9      -5.3      -6.2      7.5       4.7       6.5
  Durable           1.4      -5.8      -7.1      8.1       5.3       6.6
  Nondurable       -0.1      -4.8      -4.8      6.7       3.9       6.7
-------------------------------------------------------------------------

Business

   From the second quarter to the third quarter of 2001, business sector
productivity increased at a 2.2 percent annual rate.  Output declined 1.0
percent, while hours of all persons engaged in the sector dropped 3.1 percent
(seasonally adjusted annual rates).  The decrease in business output was the
largest since the first quarter of 1993, when it fell 1.5 percent, and the
drop in hours of all persons was the biggest since a 4.6-percent decline in
the first quarter of 1991.  After revisions, second-quarter productivity in
the business sector rose 2.3 percent, reflecting a 0.7-percent decline in
output and a drop of 2.9 percent in hours (tables B and 1).

   Hourly compensation increased at an annual rate of 4.1 percent during the
third quarter of 2001, after increasing 5.3 percent during the second
quarter.  This measure includes wages and salaries, supplements, employer
contributions to employee benefit plans, and taxes.  Real hourly
compensation, which takes into account changes in consumer prices, increased
3.4 percent in the third quarter, after rising 2.2 percent in the second
quarter of 2001.

   Unit labor costs, which reflect changes in both hourly compensation and
productivity, increased at a 1.9-percent annual rate during the third
quarter.  During the previous quarter, these costs increased 3.0 percent.
The implicit price deflator for the business sector increased 1.7 percent in
both the second and third quarters of 2001.

Nonfarm business

   Productivity in the nonfarm business sector rose at a 2.7 percent annual
rate during the third quarter of 2001.  This increase in labor productivity
occurred as output declined 1.0 percent and hours of all persons fell 3.6
percent (seasonally adjusted annual rates).  The decline in hours was the
largest since the first quarter of 1991, when hours fell 4.8 percent, and the
decline in output was the largest since the first quarter of 1993, when it
fell 1.3 percent.  Productivity rose 2.2 percent in the second quarter of
2001, as output declined 0.4 percent and hours decreased 2.5 percent (table
2).

   Hourly compensation increased at a 4.5 percent annual rate in the third
quarter of 2001. When the rise in consumer prices is taken into account, real
hourly compensation rose at a 3.8-percent annual rate during the July-
September period.  During the second quarter of 2001, real hourly
compensation had risen 1.7 percent.
   
   Unit labor costs increased 1.8 percent during the third quarter of 2001.
In the second quarter, unit labor costs in the nonfarm business sector had
increased 2.6 percent.  The implicit price deflator for nonfarm business
output rose 1.5 percent in both the second and the third quarters of 2001.

Manufacturing

   Productivity increased 1.1 percent in manufacturing in the third quarter
of 2001, as output fell 6.7 percent and hours of all persons dropped 7.7
percent (seasonally adjusted annual rates).  A similar increase in labor
productivity, 0.9 percent, was recorded in the previous quarter, reflecting
decreases in output and hours of 5.0 and 5.8 percent, respectively.  Output
has fallen in four consecutive quarters, and hours have fallen in the last
five quarters.  In durable goods, productivity rose 2.5 percent in the third
quarter, as output dropped 7.7 percent and hours of all persons fell 10.0
percent.  Productivity decreased in nondurable goods, by 1.3 percent, as
output fell more than hours; output dropped 5.4 percent, and hours of all
persons decreased 4.1 percent (tables 3, 4, and 5).

   Hourly compensation of manufacturing workers increased an average of 5.1
percent during the third quarter, a less rapid rise than the 6.2-percent
increase recorded in the two previous quarters (seasonally adjusted annual
rates).  In the third quarter, hourly compensation grew 5.6 percent in
durable goods and 4.8 percent in nondurable goods.  When the increase in
consumer prices is taken into account, real hourly compensation in total
manufacturing rose 4.4 percent in the third quarter.

   Unit labor costs increased 4.0 percent in the third quarter of 2001, less
than they had in the second quarter, when they rose 5.2 percent.  In the
durable goods sector, unit labor costs in the third quarter increased 3.1
percent.  Unit labor costs rose more rapidly, 6.1 percent, in the nondurable
goods sector.

Adjustments

   The terrorist attacks of September 11 resulted in significant disruptions
in the New York and Washington area economies, as well as disruptions to
businesses outside these directly impacted areas.  The Bureau of Economic
Analysis (BEA), U.S. Department of Commerce, reported that most of the
effects of this disaster are reflected in the usual source data used to
construct the national income and product accounts--the data that underlie
the output measures for the business and nonfarm business sectors.  See
http://www.bea.doc.gov/bea/newsrel/tech301a.htm for BEA's full discussion.

   BEA made adjustments to wages of employees because the regular source of
data--employment, hours, and earnings from the Bureau of Labor Statistics
monthly employment survey--covered the mid-month pay period and did not fully
reflect the changes to labor markets following the September attacks.
Therefore, BLS adjusted the change in hours of business employees downward by
0.3 percentage point to reflect these compensation adjustments.  It is not
possible to separately identify the impacts of the attacks on the
productivity and cost measures.

Revised Measures

   Current and previous measures for the second quarter of 2001 for the
business, nonfarm business, and manufacturing sectors are compared in table
B.  In all these sectors, the measures are similar to those reported on Sept.
5, based on information then available.

---------------------------------------------------------------------
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 2001
Business:                                                      
  Previous          2.2      -0.8    -2.9     5.4      2.2      3.1
  Current           2.3      -0.7    -2.9     5.3      2.2      3.0

Nonfarm business:                                              
  Previous          2.1      -0.5    -2.6     4.8      1.7      2.7
  Current           2.2      -0.4    -2.5     4.8      1.7      2.6

Manufacturing:                                                 
  Previous          1.1      -4.8    -5.8     6.2      3.1      5.1
  Current           0.9      -5.0    -5.8     6.2      3.1      5.2
---------------------------------------------------------------------

Revised measures: Nonfinancial Corporations
   
   Second-quarter 2001 productivity and cost measures for nonfinancial
corporations also were revised to incorporate more recent information than
was available on Sept. 5.  Productivity and output were revised up, while
hours growth was unchanged.  Productivity grew at an annual rate of 3.4
percent, compared with the previously published growth of 2.8 percent.  Since
hourly compensation growth was unchanged at 6.2 percent, unit labor costs
grew 2.7 percent--less than the 3.3-percent growth reported in September.
Unit profits fell 12.6 percent in the second quarter (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 2001

Previous     2.8      0.2     -2.5    6.2      3.0    3.3    -17.1    2.2
Current      3.4      0.8     -2.5    6.2      3.0    2.7    -12.6    2.3
-----------------------------------------------------------------------------
                                      
                                      
                              Next release date
   
   The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Thursday, Dec. 6, 2001.  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: Hours data for the labor productivity and cost measures include
hours for all persons working in the sector-wage and salary workers, the self-
employed, and unpaid family workers.  The primary source of hours and
employment data is the BLS Current Employment Statistics (CES) program, which
provides monthly survey data on the number of jobs held by wage and salary
workers in nonfarm establishments.  The CES also provides average weekly paid
hours of production and nonsupervisory workers in these establishments.
Average weekly paid hours of nonproduction and supervisory workers are
estimated by the Office of Productivity and Technology.  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 77 percent of
the value of GDP in 1996. Nonfarm business, which also excludes farming,
accounted for about 76 percent of GDP in 1996.
     Annual indexes for manufacturing and its durable and nondurable goods
components are constructed by deflating current-dollar industry value of
production data from the U.S. Bureau of the Census with deflators from the
BEA.  These deflators are based on data from the BLS producer price program
and other sources.  The industry shipments are aggregated using annual
weights, and intrasector transactions are removed.  Quarterly manufacturing
output measures are based on the index of industrial production prepared
monthly by the Board of Governors of the Federal Reserve System adjusted to
be consistent with annual indexes of manufacturing sector output prepared by
BLS.  Durables include the following 2-digit SIC industries: Primary metal
industries; fabricated metal products; nonelectrical machinery; industrial
and commercial machinery and computer equipment; electronic and other
electrical equipment; transportation equipment; instruments; lumber and
lumber products; furniture and fixtures; stone, clay, and glass and concrete
products; and miscellaneous manufactures. Nondurables include: Food and
kindred products, tobacco products, textile mill products, apparel products,
paper and allied products, printing and publishing, chemicals and chemical
products, petroleum refining and related industries, rubber and plastic
products, and leather and leather products.
     Nonfinancial corporate output is an annual-weighted index 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 53 percent of the value of GDP in 1996.

Productivity: These productivity measures describe the relationship between
real output and the labor time involved in its production. They show the
changes from period to period in the amount of goods and services produced
per hour. Although these measures relate output to hours at work of all
persons engaged in a sector, they do not measure the specific contribution of
labor, capital, or any other factor of production. Rather, they reflect the
joint effects of many influences, including changes in technology; capital
investment; level of output; utilization of capacity, energy, and materials;
the organization of production; managerial skill; and the characteristics and
effort of the work force.

     Information in this release will be made available to sensory-impaired
individuals upon request. Voice phone: 202-691-5200; Federal Relay Service
number: 1-800-877-8339.


  Table 1. Business sector: Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  1999       I     112.8      132.4     117.4     123.2       106.6      109.2       114.5      111.2
            II     112.5      132.9     118.2     124.5       107.0      110.7       112.6      111.4
           III     113.3      134.6     118.8     126.1       107.5      111.3       112.3      111.7
            IV     115.2      137.8     119.6     127.2       107.6      110.4       114.8      112.0

        ANNUAL     113.4      134.4     118.5     125.2       107.3      110.4       113.6      111.6

  2000       I     115.0      138.6     120.5     129.0       108.1      112.1       114.2      112.9
            II     117.1      140.8     120.2     131.7       109.6      112.5       115.2      113.5
           III     117.4      141.2     120.3     133.8       110.3      114.0       113.9      113.9
            IV     118.2      141.9     120.0     136.8       112.0      115.7       112.1      114.4

        ANNUAL     116.9      140.6     120.3     132.8       110.1      113.6       113.9      113.7

  2001       I     118.2      142.3     120.4     138.6       112.3      117.2       111.8      115.2
            II     118.9     r142.1     119.5     140.4       113.0      118.1       111.6      115.7
           III     119.5      141.7     118.5     141.8       113.9      118.6       112.0      116.2
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1999       I       3.1        3.5       0.4       4.7         3.1        1.5         0.9        1.3
            II      -1.1        1.6       2.7       4.2         1.4        5.4        -6.3        0.8
           III       2.9        5.1       2.1       5.1         2.0        2.1        -1.1        0.9
            IV       7.0        9.9       2.7       3.5         0.3       -3.2         9.1        1.2

        ANNUAL       2.5        4.6       2.0       4.6         2.4        2.0        -0.8        0.9

  2000       I      -0.6        2.2       2.9       5.9         1.8        6.5        -2.0        3.2
            II       7.3        6.5      -0.7       8.6         5.5        1.2         3.6        2.1
           III       1.0        1.3       0.3       6.5         2.9        5.5        -4.5        1.7
            IV       3.0        1.8      -1.1       9.4         6.3        6.3        -6.1        1.6

        ANNUAL       3.1        4.6       1.5       6.0         2.6        2.9         0.3        1.9

  2001       I       0.0        1.2       1.2       5.3         1.1        5.3        -1.3        2.9
            II      r2.3      r-0.7      -2.9      r5.3         2.2       r3.0       r-0.7       r1.7
           III       2.2       -1.0      -3.1       4.1         3.4        1.9         1.5        1.7
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1999       I       2.6        4.5       1.9       4.8         3.2        2.2        -1.4        0.8
            II       2.3        4.4       2.1       4.5         2.5        2.2        -1.2        0.9
           III       2.3        4.6       2.2       4.5         2.2        2.2        -1.2        0.9
            IV       2.9        5.0       2.0       4.4         1.7        1.4         0.5        1.1

        ANNUAL       2.5        4.6       2.0       4.6         2.4        2.0        -0.8        0.9

  2000       I       2.0        4.7       2.6       4.7         1.4        2.6        -0.3        1.5
            II       4.1        5.9       1.8       5.7         2.4        1.6         2.3        1.9
           III       3.6        4.9       1.3       6.1         2.6        2.4         1.4        2.1
            IV       2.6        3.0       0.3       7.6         4.1        4.8        -2.3        2.1

        ANNUAL       3.1        4.6       1.5       6.0         2.6        2.9         0.3        1.9

  2001       I       2.8        2.7      -0.1       7.4         3.9        4.6        -2.1        2.1
            II      r1.6        0.9      -0.6       6.6         3.1        5.0       r-3.2        2.0
           III       1.9        0.4      -1.5       6.0         3.3        4.1        -1.7        2.0
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 7, 2001
  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

  1999       I     112.2      132.8     118.3     122.3       105.9      109.0       116.0      111.5
            II     111.9      133.2     119.1     123.6       106.2      110.5       114.2      111.8
           III     112.7      134.9     119.8     125.1       106.8      111.1       114.0      112.1
            IV     114.7      138.1     120.4     126.4       107.0      110.2       116.5      112.5

        ANNUAL     112.9      134.8     119.4     124.4       106.5      110.2       115.2      112.0

  2000       I     114.5      138.8     121.2     128.4       107.6      112.1       116.0      113.5
            II     116.3      141.0     121.3     130.7       108.8      112.4       116.7      114.0
           III     116.7      141.4     121.2     133.0       109.7      114.0       115.4      114.5
            IV     117.4      142.1     121.0     135.9       111.3      115.8       113.5      114.9

        ANNUAL     116.2      140.8     121.2     132.0       109.4      113.6       115.4      114.2

  2001       I     117.4      142.5     121.4     137.6       111.5      117.2       113.1      115.7
            II     118.0     r142.4     120.6     139.2       112.0     r117.9       113.0     r116.1
           III     118.8      142.0     119.5     140.7       113.0      118.5       113.3      116.6
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1999       I       2.4        3.5       1.0       3.8         2.2        1.3         1.9        1.5
            II      -1.4        1.4       2.8       4.2         1.3        5.6        -5.9        1.2
           III       3.0        5.3       2.2       5.2         2.1        2.1        -0.8        1.0
            IV       7.4        9.8       2.3       4.2         0.9       -2.9         9.1        1.4

        ANNUAL       2.3        4.6       2.2       4.4         2.2        2.0        -0.4        1.1

  2000       I      -0.6        2.0       2.6       6.2         2.1        6.8        -1.7        3.5
            II       6.3        6.5       0.2       7.6         4.5        1.2         2.6        1.7
           III       1.4        1.2      -0.2       7.1         3.5        5.6        -4.4        1.8
            IV       2.3        1.8      -0.5       8.9         5.8        6.4        -6.6        1.5

        ANNUAL       3.0        4.5       1.5       6.1         2.7        3.1         0.2        2.0

  2001       I       0.1        1.4       1.3       5.1         0.9        5.0        -1.2        2.7
            II      r2.2      r-0.4     r-2.5       4.8         1.7       r2.6       r-0.5       r1.5
           III       2.7       -1.0      -3.6       4.5         3.8        1.8         1.0        1.5
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1999       I       2.4        4.5       2.1       4.6         3.0        2.1        -1.1        0.9
            II       1.9        4.3       2.4       4.2         2.3        2.3        -0.9        1.1
           III       2.1        4.6       2.4       4.3         1.9        2.1        -0.8        1.0
            IV       2.8        4.9       2.1       4.3         1.6        1.5         0.9        1.3

        ANNUAL       2.3        4.6       2.2       4.4         2.2        2.0        -0.4        1.1

  2000       I       2.0        4.6       2.5       5.0         1.6        2.9         0.0        1.8
            II       4.0        5.9       1.8       5.8         2.4        1.8         2.2        1.9
           III       3.6        4.8       1.2       6.3         2.8        2.6         1.3        2.1
            IV       2.3        2.8       0.5       7.4         4.0        5.0        -2.6        2.2

        ANNUAL       3.0        4.5       1.5       6.1         2.7        3.1         0.2        2.0

  2001       I       2.5        2.7       0.2       7.2         3.7        4.6        -2.5        2.0
            II       1.5       r1.0      -0.5       6.5        r2.9        4.9        -3.2        1.9
           III       1.8        0.4      -1.4       5.8         3.0        3.9        -1.9        1.8
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 7, 2001
  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

  1999       I            127.4        132.8        104.3        119.9          103.7          94.1
            II            128.4        134.1        104.5        121.3          104.2          94.4
           III            129.8        135.8        104.7        123.0          104.9          94.7
            IV            132.7        138.0        104.0        124.4          105.3          93.7

        ANNUAL            129.6        135.2        104.3        122.1          104.6          94.3

  2000       I            135.2        140.3        103.8        125.9          105.5          93.2
            II            137.3        143.1        104.2        128.1          106.6          93.3
           III            139.4        144.4        103.6        131.2          108.3          94.1
            IV            141.3        143.9        101.8        135.2          110.7          95.7

        ANNUAL            138.3        142.9        103.4        130.1          107.8          94.1

  2001       I            140.0        140.9        100.6        137.2          111.3          98.0
            II           r140.3        139.1         99.1        139.3          112.1          99.3
           III            140.7        136.7         97.2        141.1          113.3         100.3
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1999       I              5.1          2.5         -2.5          2.6            1.1          -2.3
            II              3.3          4.1          0.8          4.8            1.9           1.4
           III              4.4          5.1          0.7          5.7            2.6           1.2
            IV              9.3          6.4         -2.6          4.7            1.4          -4.2

        ANNUAL              4.5          3.7         -0.8          4.0            1.9          -0.5

  2000       I              7.6          7.1         -0.5          5.1            1.0          -2.3
            II              6.5          8.0          1.5          7.0            3.9           0.5
           III              6.4          3.7         -2.5         10.3            6.5           3.7
            IV              5.3         -1.5         -6.5         12.6            9.4           6.9

        ANNUAL              6.7          5.7         -0.9          6.5            3.1          -0.2

  2001       I             -3.6         -8.1         -4.7          6.2            1.9          10.1
            II             r0.9        r-5.0         -5.8          6.2            3.1          r5.2
           III              1.1         -6.7         -7.7          5.1            4.4           4.0
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1999       I              4.5          2.9         -1.5          3.9            2.3          -0.7
            II              4.3          3.3         -1.0          3.6            1.7          -0.7
           III              3.7          3.8          0.1          4.0            1.7           0.3
            IV              5.5          4.5         -0.9          4.4            1.7          -1.0

        ANNUAL              4.5          3.7         -0.8          4.0            1.9          -0.5

  2000       I              6.1          5.7         -0.4          5.1            1.7          -1.0
            II              6.9          6.7         -0.2          5.6            2.2          -1.2
           III              7.4          6.3         -1.0          6.7            3.2          -0.6
            IV              6.5          4.3         -2.1          8.7            5.2           2.1

        ANNUAL              6.7          5.7         -0.9          6.5            3.1          -0.2

  2001       I              3.6          0.4         -3.1          9.0            5.4           5.2
            II              2.2        r-2.8         -4.9          8.8            5.2           6.4
           III              0.9         -5.3         -6.2          7.5            4.7           6.5
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 7, 2001
  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

  1999       I            140.2        153.8        109.7        117.7          101.9          84.0
            II            142.2        156.2        109.8        119.4          102.6          84.0
           III            144.0        159.5        110.7        121.1          103.3          84.1
            IV            147.5        162.2        110.0        122.6          103.7          83.1

        ANNUAL            143.5        157.9        110.1        120.2          103.0          83.8

  2000       I            152.0        167.2        110.0        124.0          103.9          81.6
            II            155.9        172.6        110.8        126.2          105.0          81.0
           III            159.7        176.0        110.2        129.5          106.8          81.1
            IV            162.0        175.9        108.5        133.9          109.6          82.6

        ANNUAL            157.4        172.9        109.9        128.4          106.4          81.6

  2001       I            160.3        171.5        106.9        136.0          110.2          84.8
            II            161.0        169.2        105.1        138.1          111.1          85.8
           III            162.0        165.8        102.4        140.0          112.4          86.4
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1999       I              7.5          3.0         -4.2          4.0            2.4          -3.2
            II              5.8          6.2          0.4          5.8            2.9           0.0
           III              5.2          8.7          3.4          5.8            2.7           0.6
            IV             10.1          7.1         -2.7          5.0            1.7          -4.6

        ANNUAL              6.9          6.1         -0.8          4.7            2.5          -2.1

  2000       I             12.6         12.7          0.1          4.8            0.8          -6.9
            II             10.7         13.7          2.8          7.1            4.1          -3.2
           III             10.3          8.1         -1.9         10.9            7.1           0.6
            IV              5.9         -0.4         -6.0         14.3           11.0           7.9

        ANNUAL              9.7          9.5         -0.2          6.8            3.3          -2.6

  2001       I             -4.1         -9.6         -5.8          6.3            2.1          10.9
            II             r1.6        r-5.2         -6.7          6.4           r3.3          r4.7
           III              2.5         -7.7        -10.0          5.6            4.9           3.1
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1999       I              7.4          5.7         -1.6          4.3            2.7          -2.9
            II              7.3          6.1         -1.1          4.4            2.4          -2.8
           III              5.8          6.4          0.5          4.9            2.6          -0.9
            IV              7.1          6.2         -0.8          5.2            2.4          -1.9

        ANNUAL              6.9          6.1         -0.8          4.7            2.5          -2.1

  2000       I              8.4          8.7          0.3          5.3            2.0          -2.8
            II              9.6         10.5          0.9          5.7            2.3          -3.6
           III             10.9         10.4         -0.5          6.9            3.4          -3.6
            IV              9.8          8.4         -1.3          9.2            5.7          -0.5

        ANNUAL              9.7          9.5         -0.2          6.8            3.3          -2.6

  2001       I              5.5          2.6         -2.8          9.6            6.0           3.9
            II              3.3         -2.0         -5.1          9.4            5.8          r6.0
           III              1.4         -5.8         -7.1          8.1            5.3           6.6
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 7, 2001
  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

  1999       I            116.6        113.1         97.0        122.1          105.7         104.8
            II            116.6        113.5         97.3        123.1          105.8         105.5
           III            117.8        113.7         96.6        124.5          106.3         105.8
            IV            120.1        115.3         96.0        125.8          106.5         104.8

        ANNUAL            117.8        113.9         96.7        123.9          106.1         105.2

  2000       I            120.7        115.4         95.6        127.5          106.9         105.7
            II            121.2        115.8         95.5        129.5          107.8         106.8
           III            121.8        115.3         94.7        132.4          109.2         108.7
            IV            123.2        114.4         92.9        135.4          110.9         110.0

        ANNUAL            121.7        115.2         94.7        131.2          108.7         107.8

  2001       I            122.2        112.7         92.2        137.5          111.4         112.5
            II           r122.1       r111.3        r91.1        139.5          112.3        r114.3
           III            121.7        109.8         90.2        141.2          113.4         116.0
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1999       I              1.6          1.8          0.2          0.7           -0.9          -0.9
            II              0.2          1.5          1.3          3.1            0.3           2.9
           III              4.0          0.7         -3.1          4.9            1.9           0.9
            IV              8.2          5.6         -2.5          4.2            0.9          -3.7

        ANNUAL              1.6          0.7         -0.9          2.8            0.7           1.2

  2000       I              1.9          0.5         -1.4          5.5            1.4           3.5
            II              1.8          1.2         -0.6          6.4            3.4           4.5
           III              1.9         -1.5         -3.4          9.1            5.4           7.1
            IV              4.5         -3.1         -7.3          9.6            6.5           4.9

        ANNUAL              3.3          1.2         -2.1          5.9            2.4           2.4

  2001       I             -3.0         -5.9         -3.0          6.2            1.9           9.4
            II            r-0.3        r-4.8        r-4.5          6.1           r2.9          r6.5
           III             -1.3         -5.4         -4.1          4.8            4.1           6.1
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1999       I              1.1         -0.3         -1.5          3.2            1.6           2.0
            II              0.7          0.0         -0.7          2.4            0.5           1.7
           III              1.2          0.7         -0.5          2.5            0.2           1.3
            IV              3.4          2.4         -1.0          3.2            0.5          -0.2

        ANNUAL              1.6          0.7         -0.9          2.8            0.7           1.2

  2000       I              3.5          2.0         -1.4          4.4            1.1           0.9
            II              3.9          2.0         -1.9          5.2            1.9           1.2
           III              3.4          1.4         -2.0          6.3            2.7           2.8
            IV              2.5         -0.8         -3.2          7.6            4.1           5.0

        ANNUAL              3.3          1.2         -2.1          5.9            2.4           2.4

  2001       I              1.3         -2.4         -3.6          7.8            4.3           6.5
            II             r0.7        r-3.9        r-4.6          7.7            4.2           6.9
           III             -0.1         -4.8         -4.8          6.7            3.9           6.7
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 7, 2001
  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

  1999       I    114.3    139.2     121.8    119.2     103.2     104.3    103.0    103.9    141.8    107.1
            II    114.4    140.3     122.6    120.4     103.5     105.2    103.7    104.8    135.8    107.5
           III    115.2    142.3     123.4    121.9     104.0     105.8    105.1    105.6    128.2    107.5
            IV    116.5    145.0     124.5    123.1     104.1     105.6    105.0    105.4    131.1    107.6

        ANNUAL    115.1    141.7     123.1    121.2     103.8     105.2    104.2    105.0    134.2    107.4

  2000       I    117.7    147.5     125.4    124.7     104.5     106.0    105.5    105.9    134.3    108.3
            II    119.7    150.3     125.5    127.2     105.8     106.2    105.3    106.0    137.8    108.7
           III    120.9    151.9     125.6    129.3     106.6     106.9    105.6    106.6    133.8    108.9
            IV    121.4    152.4     125.6    132.3     108.3     109.0    106.0    108.2    118.5    109.0

        ANNUAL    119.9    150.5     125.5    128.3     106.4     107.0    105.6    106.7    131.0    108.7

  2001       I    121.5    152.6     125.6    134.1     108.7     110.3    107.5    109.6    109.2    109.5
            II   r122.6   r152.9     124.8    136.1     109.5    r111.1   r109.3   r110.6   r105.6   r110.2
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  1999       I      3.9      6.0       2.0      4.5       2.9       0.6     -1.0      0.1     12.4      1.4
            II      0.4      3.2       2.8      4.2       1.3       3.8      2.8      3.6    -16.0      1.2
           III      2.8      5.6       2.7      4.9       1.9       2.1      5.5      3.0    -20.4      0.3
            IV      4.5      8.0       3.3      3.8       0.6      -0.6     -0.7     -0.6      9.1      0.3

        ANNUAL      3.0      5.5       2.4      4.5       2.3       1.4      2.0      1.6     -5.3      0.8

  2000       I      4.0      7.2       3.0      5.5       1.4       1.4      2.2      1.6     10.2      2.5
            II      7.1      7.6       0.5      8.1       5.0       0.9     -0.7      0.4     11.0      1.5
           III      4.0      4.4       0.4      6.8       3.1       2.7      0.8      2.2    -11.1      0.7
            IV      1.6      1.3      -0.3      9.6       6.5       7.9      1.7      6.2    -38.6      0.6

        ANNUAL      4.1      6.2       2.0      5.9       2.5       1.7      1.3      1.6     -2.3      1.2

  2001       I      0.6      0.7       0.0      5.7       1.5       5.0      5.8      5.2    -27.8      1.8
            II     r3.4     r0.8      -2.5      6.2       3.0      r2.7     r7.0     r3.8   r-12.6     r2.3
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  1999       I      4.0      6.1       2.0      4.7       3.1       0.7      1.3      0.8     -1.3      0.6
            II      2.9      5.4       2.4      4.4       2.4       1.4      1.8      1.5     -3.2      1.0
           III      2.2      4.9       2.6      4.4       2.0       2.1      3.3      2.4    -11.5      0.8
            IV      2.9      5.7       2.7      4.4       1.7       1.5      1.6      1.5     -4.9      0.8

        ANNUAL      3.0      5.5       2.4      4.5       2.3       1.4      2.0      1.6     -5.3      0.8

  2000       I      2.9      6.0       3.0      4.6       1.3       1.7      2.4      1.9     -5.3      1.1
            II      4.6      7.1       2.4      5.6       2.2       0.9      1.6      1.1      1.5      1.1
           III      4.9      6.8       1.8      6.0       2.5       1.1      0.4      0.9      4.3      1.3
            IV      4.2      5.1       0.9      7.5       4.0       3.2      1.0      2.6     -9.6      1.3

        ANNUAL      4.1      6.2       2.0      5.9       2.5       1.7      1.3      1.6     -2.3      1.2

  2001       I      3.3      3.4       0.1      7.5       4.0       4.1      1.9      3.5    -18.7      1.2
            II     r2.4     r1.8      -0.6     r7.0       3.5      r4.6     r3.8      4.4   r-23.4     r1.4
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        November 7, 2001
  r=revised                                                               Source: Bureau of Labor Statistics













SOURCES:  Output data are from the Bureau of Economic Analysis and the Census 
Bureau of the U.S. Department of Commerce; the Bureau of Labor Statistics, 
U.S. Department of Labor; and the Federal Reserve Board.  Compensation and 
hours data are from the Bureau of Labor Statistics and the Bureau of Economic 
Analysis.

RELIABILITY:  Productivity and cost measures are regularly revised as more 
complete information becomes available.  The measures are first published 
within 40 days of the close of the reference period; revisions appear 30 days 
later, and second revisions after an additional 60 days.  In the business 
sector, the third publication (second revision) of a quarterly index of 
output per hour of all persons has differed from the initial value by between 
-1.6 and +1.8 index points approximately 95 percent of the time.  This 
interval is based on the performance of this measure between the fourth 
quarter of 1995 and the second quarter of 2001.  



Footnotes, Tables 1-6

(1)  Wages and salaries of employees plus employers' contributions for social 
insurance and private benefit plans.  Except for nonfinancial 
corporations, where there are no self-employed, data also include an 
estimate of wages, salaries, and supplemental payments for the self-
employed.

(2)  The change for recent quarters is based on the Consumer Price Index for 
all urban consumers (CPI-U).  The trend from 1978-2000 is based on the 
Consumer Price Index research series (CPI-U-RS).

(3)  Unit nonlabor payments include profits, capital consumption allowances, 
interest, rental income of persons, and indirect taxes.

(4)  Current dollar output divided by the output index.

(5)  Quarterly changes:  Percent change compounded at annual rate from the 
original data rather than index numbers.  Annual changes:  Percent 
change between annual average levels.

(6)  Unit nonlabor costs include capital consumption allowances, interest, 
rental income of persons, and indirect taxes.  For nonfinancial 
corporations, rental income of persons is zero by definition.

(7)  Total unit costs are the sum of unit labor and nonlabor costs.

(8)  Unit profits include corporate profits with inventory valuation and 
capital consumption adjustments.