USDL 03-98
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 8:30 A.M. EST,
THURSDAY, MARCH 6, 2003


Internet address:       http://www.bls.gov/lpc
Historical, technical   
  information:          (202) 691-5606
Current data:           (202) 691-5200
Media contact:          (202) 691-5902
                                      
                                      
                           PRODUCTIVITY AND COSTS
                  Fourth Quarter and Annual Averages, 2002


     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised fourth-quarter seasonally-adjusted annual rates of
productivity change--as measured by output per hour of all persons--and
revised annual changes for the full year 2002.  Percent changes in business
and nonfarm business productivity were:
     
                                  Fourth  Annual averages
                                 quarter     2001-2002

     Business sector                0.3          4.8
     Nonfarm business sector        0.8          4.8
     
     In both sectors, fourth-quarter productivity increased rather than
declining as originally reported.  Fourth-quarter productivity and related
measures are summarized in table A and appear in detail in tables 1 through
5; the preliminary and revised fourth-quarter and annual data appear in table
C.

     In the manufacturing sector, increases in productivity were:

                                        Fourth  Annual averages
                                        quarter     2001-2002

     Manufacturing                        0.1          4.5
       Durable goods manufacturing        2.9          5.6
       Nondurable goods manufacturing    -3.4          2.8

     Manufacturing productivity rose 0.1 percent (seasonally adjusted annual
rate) in the fourth quarter.  This increase was lower than originally
reported, reflecting downward revisions to output per hour in both the
durable and nondurable goods manufacturing subsectors.  (Output and hours in
manufacturing, which includes about 15 percent of U.S. business-sector
employment, tend to vary more from quarter to quarter than data for the
aggregate business and nonfarm business sectors.)

----------------------------------------------------------------------------
Table A. Productivity and costs: Revised fourth-quarter 2002 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           0.3       1.8      1.5     4.2       2.2       3.9
 Nonfarm business   0.8       1.7      0.9     4.6       2.5       3.8
 Manufacturing      0.1      -3.2     -3.2     5.5       3.4       5.4
   Durable          2.9      -2.3     -5.0     6.4       4.3       3.4
   Nondurable      -3.4      -3.9     -0.5     4.4       2.3       8.1
----------------------------------------------------------------------------
                      Percent change from same quarter a year ago

 Business           4.0       3.4     -0.6     4.3       2.0       0.3
 Nonfarm business   4.1       3.5     -0.6     4.2       1.9       0.1
 Manufacturing      4.4       1.1     -3.1     5.0       2.7       0.6
   Durable          6.6       2.1     -4.3     5.5       3.2      -1.1
   Nondurable       1.5       0.1     -1.4     4.4       2.1       2.9
----------------------------------------------------------------------------

     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 data 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.
                                      
                                      
                    THIRD-TO-FOURTH QUARTER 2002 CHANGES

Business

     Labor productivity in the business sector rose at a 0.3 percent annual
rate in the fourth quarter of 2002, as output increased 1.8 percent and hours
of all persons engaged in the sector increased 1.5 percent (table 1).  The
fourth-quarter increase in business sector hours followed six consecutive
quarterly declines.  During third quarter 2002, productivity had increased
5.8 percent as output grew 5.3 percent and hours declined 0.5 percent.

     Hourly compensation grew at a 4.2-percent annual rate in the fourth
quarter, compared with a 5.7-percent rise in the third 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, rose 2.2 percent in the fourth quarter of 2002
after increasing 3.5 percent one quarter earlier.

     Unit labor costs, which reflect changes in both hourly compensation and
productivity, increased 3.9 percent during the fourth quarter of 2002, after
being unchanged in the third quarter.  The implicit price deflator for
business output, which reflects changes in unit labor costs and unit nonlabor
payments, increased 1.3 percent in the fourth quarter and 0.5 percent in the
third quarter.

Nonfarm business

     In the nonfarm business sector, productivity rose at an annual rate of
0.8 percent in the fourth quarter of 2002, as output grew 1.7 percent and
hours of all persons--employees, proprietors, and unpaid family workers--rose
0.9 percent (seasonally adjusted annual rates).  During the third quarter,
productivity had increased 5.5 percent, output had increased 5.2 percent, and
hours had declined 0.2 percent (table 2).

     Hourly compensation rose 4.6 percent in the fourth quarter, after rising
5.4 percent in the third quarter.  When the increase in consumer prices was
taken into account, real hourly compensation rose 2.5 percent in the fourth
quarter and 3.1 percent in the third quarter.

     Unit labor costs grew 3.8 percent in the fourth quarter, after edging
down 0.1 percent in the third quarter.  The implicit price deflator for
nonfarm business increased 1.2 percent in the fourth quarter, as a 2.8
percent decline in unit nonlabor payments offset much of the increase in unit
labor costs.

Manufacturing

     Manufacturing productivity rose 0.1 percent in the fourth quarter of
2002, as both output and hours dropped by 3.2 percent (seasonally adjusted
annual rates).  In durable goods industries, productivity increased 2.9
percent when output fell 2.3 percent but hours fell faster, 5.0 percent.  In
nondurable goods industries, output per hour fell 3.4 percent, reflecting
declines in output and hours of 3.9 percent and 0.5 percent, respectively.
During the third quarter, productivity had increased 5.5 percent in total
manufacturing, 7.9 percent in durable goods manufacturing, and 2.4 percent in
nondurable goods manufacturing (tables 3, 4, and 5).

     Hourly compensation of all manufacturing workers increased 5.5 percent
during the fourth quarter, rising in both of the manufacturing subsectors--
6.4 percent in durable goods and 4.4 percent in nondurable goods.  When the
increase in consumer prices was taken into account, real hourly compensation
for all manufacturing workers rose 3.4 percent in the fourth quarter.

     Unit labor costs in manufacturing grew 5.4 percent in the fourth quarter
of 2002, the largest increase in this measure since the third quarter of 2000
(7.8 percent).  Unit labor costs rose 3.4 percent in durable goods
manufacturing and 8.1 percent in nondurable goods industries.  Manufacturing
unit labor costs had increased only 0.1 percent in the third quarter.


                      ANNUAL AVERAGE CHANGES, 2001-2002
                                      
Business

     Business sector productivity increased 4.8 percent when the annual index
for 2002 was compared with the annual index for 2001 (table B).  This was the
largest annual productivity gain since 1950, when business sector output per
hour increased 8.5 percent.  The 2001-2002 increase reflected a 2.7-percent
increase in output combined with a 2.0-percent decline in hours.  In 2001,
output per hour had increased 1.1 percent, when output declined 0.2 percent
and hours worked fell 1.3 percent.

---------------------------------------------------------------------------
Table B. Productivity and costs: Revised 2002 annual averages
(Seasonally adjusted annual rates)
---------------------------------------------------------------------------
                                                         Real      
                                               Hourly    hourly    Unit
                  Produc-                      compen-   compen-   labor
Sector            tivity     Output   Hours    sation    sation    costs
---------------------------------------------------------------------------                                    
                                    
                    Percent change from previous year

Business             4.8       2.7     -2.0       2.9       1.3    -1.7
Nonfarm business     4.8       2.7     -2.0       2.8       1.2    -1.9
Manufacturing        4.5      -1.1     -5.4       3.8       2.1    -0.7
  Durable            5.6      -1.4     -6.7       4.1       2.5    -1.4
  Nondurable         2.8      -0.7     -3.4       3.5       1.8     0.7
---------------------------------------------------------------------------

     Hourly compensation in the business sector increased 2.9 percent in both
2001 and 2002.  Real hourly compensation increased more in 2002, 1.3 percent,
than it had in 2001, 0.2 percent, because consumer prices rose less in 2002
than they had in 2001.

     Business sector unit labor costs decreased 1.7 percent in 2002.  This
was the largest annual decrease to date in this measure, which begins with
data for 1948.  Unit labor costs rose 1.8 percent in 2001.  The implicit
price deflator rose 0.4 percent in 2002, compared with a 2.0-percent increase
in 2001.

Nonfarm business

     Productivity increased 4.8 percent in the nonfarm business sector during
2002, more than in any year since 1950, when output per hour grew 6.9
percent.  Output grew 2.7 percent and hours of all persons fell 2.0 percent
in 2002.  The decline in hours was the largest since they fell 2.4 percent in
1991.  Nonfarm business productivity had increased 1.1 percent in 2001, when
output edged down 0.1 percent and hours fell 1.2 percent.

     Hourly compensation grew 2.8 percent in 2002, about the same as the 2.7-
percent increase in 2001.  Real hourly compensation increased 1.2 percent in
2002, following a 0.1-percent decline in the previous year.

     Unit labor costs in the nonfarm business sector dropped 1.9 percent in
2002, the largest annual decline in this measure ever recorded.  These costs
had increased 1.6 percent during 2001.  The implicit price deflator, which
reflects nonlabor payments as well as labor costs, rose 0.5 percent in 2002,
following a 1.9-percent rise in 2001.

Manufacturing

     Manufacturing productivity grew 4.5 percent in 2002, rebounding from a
small increase in 2001 of 0.8 percent.  Output fell 1.1 percent in 2002, and
hours of all persons working in the sector dropped 5.4 percent.  Labor
productivity increased 5.6 percent in durable goods manufacturing, reflecting
declines of 1.4 percent in output and 6.7 percent in hours.  In nondurable
goods manufacturing, productivity rose 2.8 percent in 2002, output fell 0.7
percent, and hours declined 3.4 percent (tables B, 3, 4, and 5).

     Hourly compensation of manufacturing workers increased 3.8 percent in
2002, compared to a 1.5 percent increase one year earlier.  Real hourly
compensation rose 2.1 percent in 2002, after having declined 1.2 percent in
2001.  Hourly compensation increased 4.1 percent in durable goods industries
and 3.5 percent in nondurable goods industries in 2002.

     Unit labor costs declined 0.7 percent in manufacturing.  In durable
manufacturing, unit labor costs fell 1.4 percent in 2002.  By contrast, unit
labor costs in nondurable manufacturing rose last year, by 0.7 percent.


                              REVISED MEASURES
                                      
     Productivity and cost data for the fourth quarter and full year 2002 for
business, nonfarm business, and manufacturing were revised to incorporate the
most recent information (table C).  Quarterly measures of real hourly
compensation in the business, nonfarm business, nonfinancial corporate, and
manufacturing sectors for 2002 were revised to incorporate the annual
recalculation of seasonal factors for the Consumer Price Index.

     In the business and nonfarm business sectors, changes in productivity
and output are greater--and increases in unit labor costs are smaller--than
those reported on Feb. 6, based on information available at that time.
Fourth-quarter measures of manufacturing productivity were revised down from
those reported on Feb. 6, reflecting a larger decline in output than
originally reported.  As a result, unit labor costs in manufacturing showed a
larger increase than previously reported.  Annual measures of productivity
and costs are similar to those reported on Feb. 6.

--------------------------------------------------------------------------
Table C. Previous and revised productivity and related measures:
Fourth-quarter and annual averages 2002
(Seasonally adjusted annual rates)
--------------------------------------------------------------------------                                                                  
                                                        Real      
                                              Hourly    hourly    Unit
                   Produc-                    compen-   compen-   labor
Sector             tivity    Output   Hours   sation    sation    costs
--------------------------------------------------------------------------
                                                                  
              Percent change, third to fourth quarter 2002

Business:                                                         
  Previous         -0.7       0.9      1.5     4.3       1.8       5.0
  Current           0.3       1.8      1.5     4.2       2.2       3.9
Nonfarm business:                                                 
  Previous         -0.2       0.8      1.0     4.6       2.2       4.8
  Current           0.8       1.7      0.9     4.6       2.5       3.8
Manufacturing:                                                    
  Previous          0.7      -2.4     -3.0     5.3       2.9       4.6
  Current           0.1      -3.2     -3.2     5.5       3.4       5.4
--------------------------------------------------------------------------

                      Percent change, 2001 - 2002
Business:                                                         
  Previous          4.7       2.6     -2.0     2.9       1.3      -1.7
  Current           4.8       2.7     -2.0     2.9       1.3      -1.7
Nonfarm business:                                                 
  Previous          4.7       2.7     -2.0     2.8       1.2      -1.8
  Current           4.8       2.7     -2.0     2.8       1.2      -1.9
Manufacturing:                                                    
  Previous          4.6      -1.0     -5.4     3.8       2.1      -0.7
  Current           4.5      -1.1     -5.4     3.8       2.1      -0.7
--------------------------------------------------------------------------                                                                  
                                      
                                      
                              NEXT RELEASE DATE
                                      
     The next release of Productivity and Costs is scheduled for 8:30 AM EDT,
Thursday, May 1, 2003, and will present preliminary first-quarter measures
for business, nonfarm business, and manufacturing.  Fourth-quarter and annual
data for nonfinancial corporations will be released at that time.


Upcoming change to productivity and cost data

     The Bureau of Labor Statistics discontinued the Hours at Work Survey
(HWS), used to adjust the paid hours of wage and salary employees to their
hours at the workplace, following the 2000 survey.  The survey will be
replaced with a comparable set of measures derived from information on
scheduled hours of work and paid leave collected from employers participating
in the National Compensation Survey.

     The new ratios of hours worked to hours paid will be incorporated into
the measures of employee hours beginning with the release of the second
quarter 2003 data on Aug. 7.  These ratios will be adjusted to levels from
the HWS and will cover the period following 2000.




                               TECHNICAL NOTES
                                      
Labor  Hours: Hours data for the labor productivity and cost measures include
hours for all persons working in the sector-wage and salary workers, the self-
employed,  and  unpaid  family  workers.  The primary  source  of  hours  and
employment data is the BLS Current Employment Statistics (CES) program, which
provides  monthly survey data on the number of jobs held by wage  and  salary
workers in nonfarm establishments.  The CES also provides average weekly paid
hours of production and nonsupervisory workers in these establishments.   The
Office of Productivity and Technology estimates average weekly paid hours  of
nonproduction  and supervisory workers.  Weekly paid hours  are  adjusted  to
hours at work using the BLS Hours at Work survey, conducted for this purpose.
    Data  from  the  BLS Current Population Survey (CPS) are  used  for  farm
labor; in the nonfarm sector, the National Income and Product Accounts (NIPA)
prepared  by  the  Bureau of Economic Analysis (BEA)  of  the  Department  of
Commerce  and  the  CPS  are  used  to measure  labor  input  for  government
enterprises, proprietors, and unpaid family workers.

Output: Business sector output is an annual-weighted index constructed  after
excluding  from  gross domestic product (GDP) the following outputs:  General
government, nonprofit institutions, paid employees of private households, and
the  rental value of owner-occupied dwellings. Corresponding exclusions  also
are  made in labor inputs. Business output accounted for about 77 percent  of
the  value  of  GDP  in 1996. Nonfarm business, which also excludes  farming,
accounted for about 76 percent of GDP in 1996.
    Annual  indexes  for manufacturing and its durable and  nondurable  goods
components  are  constructed by deflating current-dollar  industry  value  of
production  data from the U.S. Bureau of the Census with deflators  from  the
BEA.   These deflators are based on data from the BLS producer price  program
and  other  sources.   The  industry shipments are  aggregated  using  annual
weights,  and  intrasector transactions are removed.  Quarterly manufacturing
output  measures  are  based on the index of industrial  production  prepared
monthly  by the Board of Governors of the Federal Reserve System adjusted  to
be  consistent with annual indexes of manufacturing sector output prepared by
BLS.   Durables  include the following 2-digit SIC industries: Primary  metal
industries;  fabricated metal products; nonelectrical  machinery;  industrial
and  commercial  machinery  and  computer  equipment;  electronic  and  other
electrical  equipment;  transportation  equipment;  instruments;  lumber  and
lumber  products; furniture and fixtures; stone, clay, and glass and concrete
products;  and  miscellaneous  manufactures. Nondurables  include:  Food  and
kindred  products, tobacco products, textile mill products, apparel products,
paper  and  allied products, printing and publishing, chemicals and  chemical
products,  petroleum  refining  and related industries,  rubber  and  plastic
products, and leather and leather products.
   Nonfinancial  corporate output is an annual-weighted index  calculated  on
the  basis of the costs incurred and the incomes earned from production.  The
output  measure excludes the following outputs from GDP: general  government;
nonprofit institutions; employees of private households; the rental value  of
owner-occupied  dwellings; unincorporated business;  and  those  corporations
which  are depository institutions, nondepository institutions, security  and
commodity  brokers, insurance carriers, regulated investment  offices,  small
business  investment offices, and real estate investment trusts. Nonfinancial
corporations accounted for about 53 percent of the value of GDP in 1996.

Productivity:  These productivity measures describe the relationship  between
real  output  and the labor time involved in its production.  They  show  the
changes  from  period to period in the amount of goods and services  produced
per  hour.  Although these measures relate output to hours  at  work  of  all
persons engaged in a sector, they do not measure the specific contribution of
labor,  capital, or any other factor of production. Rather, they reflect  the
joint  effects  of many influences, including changes in technology;  capital
investment; level of output; utilization of capacity, energy, and  materials;
the organization of production; managerial skill; and the characteristics and
effort of the work force.
    Information  in  this release will be made available to  sensory-impaired
individuals  upon request. Voice phone: 202-691-5200; Federal  Relay  Service
number: 1-800-877-8339.

  Table 1. Business sector: Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  2000       I     115.3      138.4     120.1     131.4       110.5      114.0       110.7      112.8
            II     117.2      140.3     119.7     132.4       110.5      113.0       114.1      113.4
           III     117.3      140.4     119.7     135.0       111.7      115.1       111.2      113.7
            IV     117.9      140.7     119.4     136.3       111.9      115.6       112.0      114.3

        ANNUAL     116.9      140.0     119.7     133.8       111.2      114.4       112.0      113.5

  2001       I     117.5      140.4     119.5     137.3       111.8      116.9       112.3      115.2
            II     117.4      139.4     118.7     137.5       111.0      117.1       113.6      115.8
           III     117.9      139.1     117.9     137.8       111.1      116.8       115.5      116.4
            IV     120.1      140.3     116.8     138.3       111.6      115.1       117.2      115.9

        ANNUAL     118.2      139.8     118.2     137.7       111.4      116.5       114.7      115.8

  2002       I     122.5      142.3     116.1     139.3       112.0      113.7       119.9      116.0
            II     123.1      142.5     115.8     140.8      r112.3      114.4       119.3      116.2
           III     124.8      144.4     115.6     142.7      r113.2      114.3       119.7      116.3
            IV    r124.9     r145.0     116.1     144.2       113.8     r115.4      r118.9      116.7

        ANNUAL     123.8      143.5     115.9     141.8       112.8      114.5      r119.5      116.3

  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2000       I       0.3        2.2       1.9      14.7        10.3       14.4       -15.1        2.4
            II       6.7        5.4      -1.2       3.0         0.1       -3.5        12.9        2.2
           III       0.4        0.4       0.0       8.3         4.6        7.8        -9.6        1.1
            IV       2.1        0.9      -1.2       3.7         0.7        1.6         2.6        1.9

        ANNUAL       3.0        4.1       1.0       6.8         3.4        3.7        -1.7        1.7

  2001       I      -1.5       -1.0       0.4       3.1        -0.6        4.7         1.1        3.4
            II      -0.2       -2.8      -2.6       0.5        -2.6        0.7         4.9        2.2
           III       1.8       -0.9      -2.6       0.9         0.2       -0.9         6.8        1.8
            IV       7.6        3.5      -3.8       1.4         1.7       -5.8         6.1       -1.6

        ANNUAL       1.1       -0.2      -1.3       2.9         0.2        1.8         2.4        2.0

  2002       I       8.3        5.9      -2.2       3.0        r1.7       -4.9         9.5        0.3
            II       1.8        0.6      -1.2       4.3         0.8        2.4        -2.1        0.7
           III       5.8        5.3      -0.5       5.7        r3.5        0.0         1.3        0.5
            IV      r0.3       r1.8       1.5      r4.2        r2.2       r3.9       r-2.8       r1.3

        ANNUAL      r4.8       r2.7      -2.0       2.9         1.3       -1.7        r4.2        0.4

  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2000       I       2.3        4.6       2.3       5.9         2.5        3.5        -2.0        1.4
            II       4.1        5.4       1.3       6.5         3.1        2.3         0.8        1.7
           III       3.3        4.1       0.7       7.7         4.1        4.3        -2.5        1.7
            IV       2.4        2.2      -0.1       7.3         3.8        4.9        -2.9        1.9

        ANNUAL       3.0        4.1       1.0       6.8         3.4        3.7        -1.7        1.7

  2001       I       1.9        1.4      -0.5       4.5         1.2        2.6         1.4        2.2
            II       0.2       -0.7      -0.9       3.9         0.5        3.6        -0.4        2.1
           III       0.5       -1.0      -1.5       2.0        -0.6        1.5         3.8        2.3
            IV       1.9       -0.3      -2.2       1.5        -0.3       -0.4         4.7        1.4

        ANNUAL       1.1       -0.2      -1.3       2.9         0.2        1.8         2.4        2.0

  2002       I       4.3        1.4      -2.8       1.4         0.2       -2.8         6.8        0.7
            II       4.8        2.3      -2.5       2.4         1.1       -2.3         5.0        0.3
           III       5.9        3.8      -1.9       3.6        r1.9       -2.1         3.6        0.0
            IV      r4.0       r3.4      -0.6       4.3         2.0       r0.3        r1.4        0.7

        ANNUAL      r4.8       r2.7      -2.0       2.9         1.3       -1.7        r4.2        0.4

  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       March 6, 2003
  r=revised                                                              Source: Bureau of Labor Statistics


  Table 2. Nonfarm business sector: Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  2000       I     114.7      138.7     120.9     130.8       110.0      114.0       112.3      113.4
            II     116.4      140.5     120.7     131.5       109.8      113.0       115.6      113.9
           III     116.6      140.6     120.6     134.3       111.1      115.2       112.8      114.3
            IV     117.1      141.0     120.4     135.3       111.2      115.6       113.4      114.8

        ANNUAL     116.2      140.2     120.6     133.0       110.6      114.4       113.5      114.1

  2001       I     116.7      140.7     120.6     136.3       110.9      116.8       113.8      115.7
            II     116.6      139.7     119.8     136.3       110.1      116.9       115.3      116.3
           III     117.2      139.4     118.9     136.7       110.2      116.6       117.2      116.8
            IV     119.3      140.4     117.7     137.2       110.7      115.0       119.2      116.5

        ANNUAL     117.5      140.1     119.2     136.6       110.5      116.3       116.4      116.3

  2002       I     121.8      142.5     117.0     138.1       111.1      113.4       121.7      116.4
            II     122.3      142.9     116.8     139.5       111.2      114.1       121.7      116.8
           III     123.9      144.7     116.8     141.3      r112.1      114.0       121.8      116.9
            IV    r124.2     r145.3     117.0     142.9       112.8     r115.1      r121.0     r117.2

        ANNUAL    r123.1     r143.9     116.9     140.5       111.8     r114.1      r121.6     r116.8

  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2000       I       0.2        1.9       1.7      15.2        10.7       14.9       -15.3        2.7
            II       6.0        5.4      -0.6       2.2        -0.7       -3.6        12.2        1.9
           III       0.6        0.2      -0.4       8.7         4.9        8.0        -9.1        1.4
            IV       1.7        1.1      -0.6       3.1         0.2        1.4         2.1        1.6

        ANNUAL       2.9        4.0       1.0       7.0         3.5        3.9        -1.7        1.8

  2001       I      -1.4       -0.9       0.5       2.8        -0.9        4.3         1.5        3.3
            II      -0.1       -2.7      -2.6       0.1        -2.9        0.3         5.1        2.0
           III       2.1       -0.8      -2.9       1.0         0.3       -1.1         6.8        1.7
            IV       7.2        2.9      -4.0       1.5         1.8       -5.4         6.9       -1.0

        ANNUAL       1.1       -0.1      -1.2       2.7        -0.1        1.6         2.5        1.9

  2002       I       8.6        6.2      -2.3       2.9        r1.6       -5.3         8.8       -0.2
            II       1.7        0.9      -0.7       4.0        r0.4        2.3         0.1        1.4
           III       5.5        5.2      -0.2       5.4        r3.1       -0.1         0.4        0.1
            IV      r0.8       r1.7      r0.9       4.6        r2.5       r3.8       r-2.8       r1.2

        ANNUAL      r4.8        2.7      -2.0       2.8         1.2      r-1.9        r4.5        0.5

  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2000       I       2.3        4.5       2.1       6.2         2.8        3.7        -1.8        1.7
            II       4.0        5.4       1.3       6.6         3.2        2.5         0.7        1.8
           III       3.3        3.9       0.7       7.9         4.3        4.5        -2.6        1.8
            IV       2.1        2.2       0.0       7.2         3.7        4.9        -3.1        1.9

        ANNUAL       2.9        4.0       1.0       7.0         3.5        3.9        -1.7        1.8

  2001       I       1.7        1.4      -0.3       4.2         0.9        2.4         1.4        2.1
            II       0.2       -0.6      -0.8       3.7         0.3        3.5        -0.3        2.1
           III       0.6       -0.8      -1.4       1.8        -0.8        1.2         3.8        2.2
            IV       1.9       -0.4      -2.3       1.4        -0.4       -0.5         5.1        1.5

        ANNUAL       1.1       -0.1      -1.2       2.7        -0.1        1.6         2.5        1.9

  2002       I       4.4        1.3      -2.9       1.4        r0.2       -2.9         6.9        0.6
            II       4.9        2.3      -2.5       2.3         1.0       -2.4         5.6        0.5
           III       5.7        3.8      -1.8       3.4        r1.7       -2.2         4.0        0.1
            IV      r4.1       r3.5      -0.6       4.2         1.9       r0.1        r1.5       r0.6

        ANNUAL      r4.8        2.7      -2.0       2.8         1.2      r-1.9        r4.5        0.5

  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       March 6, 2003
  r=revised                                                              Source: Bureau of Labor Statistics


  Table 3. Manufacturing sector: Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  2000       I            133.6        138.3        103.5        131.4          110.5          98.4
            II            134.9        139.8        103.6        129.3          107.9          95.9
           III            135.4        139.3        102.9        132.2          109.4          97.7
            IV            135.9        137.6        101.3        131.5          108.0          96.7

        ANNUAL            134.9        138.7        102.8        131.1          109.0          97.2

  2001       I            135.2        134.9         99.8        132.0          107.4          97.6
            II            135.2        132.8         98.2        133.0          107.4          98.4
           III            136.2        131.1         96.3        133.3          107.5          97.9
            IV            137.5        129.1         93.9        134.3          108.3          97.7

        ANNUAL            136.0        132.0         97.1        133.1          107.7          97.9

  2002       I            140.1        129.5         92.4        135.6          109.0          96.8
            II            141.5        130.6         92.3        137.2          109.4          96.9
           III            143.4        131.6         91.7        139.1         r110.3          97.0
            IV           r143.5       r130.5         91.0        140.9          111.2         r98.2

        ANNUAL           r142.1       r130.5        r91.8        138.2          110.0          97.2

  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2000       I              4.5          2.7         -1.7         25.3           20.5          19.9
            II              3.8          4.4          0.5         -6.3           -9.0          -9.7
           III              1.6         -1.3         -2.8          9.5            5.8           7.8
            IV              1.6         -4.8         -6.3         -2.3           -5.1          -3.8

        ANNUAL              4.1          2.5         -1.5          7.4            3.9           3.2

  2001       I             -2.1         -7.6         -5.6          1.6           -2.1           3.7
            II              0.0         -6.2         -6.2          3.1           -0.1           3.1
           III              3.0         -4.9         -7.6          1.0            0.3          -1.9
            IV              3.9         -6.1         -9.7          2.9            3.2          -1.0

        ANNUAL              0.8         -4.9         -5.6          1.5           -1.2           0.8

  2002       I              7.8          1.2         -6.1          3.8           r2.5          -3.7
            II              4.2          3.5         -0.7          5.0           r1.4           0.7
           III              5.5          3.0         -2.4          5.6           r3.4           0.1
            IV             r0.1        r-3.2        r-3.2         r5.5           r3.4          r5.4

        ANNUAL             r4.5        r-1.1         -5.4          3.8            2.1          -0.7

  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2000       I              4.4          3.6         -0.8          8.9            5.5           4.3
            II              4.7          3.8         -0.8          6.9            3.5           2.1
           III              4.3          2.6         -1.7          7.9            4.3           3.4
            IV              2.9          0.2         -2.6          5.9            2.4           2.9

        ANNUAL              4.1          2.5         -1.5          7.4            3.9           3.2

  2001       I              1.2         -2.4         -3.6          0.5           -2.7          -0.7
            II              0.2         -5.0         -5.2          2.9           -0.5           2.6
           III              0.6         -5.9         -6.4          0.8           -1.8           0.2
            IV              1.2         -6.2         -7.3          2.1            0.3           1.0

        ANNUAL              0.8         -4.9         -5.6          1.5           -1.2           0.8

  2002       I              3.6         -4.0         -7.4          2.7           r1.5          -0.9
            II              4.7         -1.7         -6.1          3.2           r1.9          -1.5
           III              5.3          0.3         -4.8          4.3           r2.6          -1.0
            IV             r4.4         r1.1         -3.1         r5.0           r2.7          r0.6

        ANNUAL             r4.5        r-1.1         -5.4          3.8            2.1          -0.7

  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                March 6, 2003
  r=revised                                                       Source: Bureau of Labor Statistics

  Table 4. Durable manufacturing sector: Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  2000       I            148.6        162.9        109.7        130.8          109.9          88.0
            II            150.0        165.2        110.2        127.5          106.4          85.0
           III            150.3        164.6        109.5        130.6          108.0          86.9
            IV            150.1        162.0        107.9        128.4          105.5          85.5

        ANNUAL            149.7        163.7        109.3        129.3          107.5          86.4

  2001       I            149.3        158.3        106.0        129.4          105.3          86.7
            II            148.8        154.9        104.1        130.5          105.4          87.7
           III            149.6        151.8        101.4        130.2          105.0          87.0
            IV            151.0        148.6         98.5        131.8          106.3          87.3

        ANNUAL            149.6        153.4        102.5        130.4          105.5          87.2

  2002       I            154.7        149.4         96.5        132.7          106.7          85.8
            II            156.8        151.2         96.4        134.8          107.5          86.0
           III            159.8        152.6         95.5        136.9          108.6          85.6
            IV           r161.0       r151.7        r94.2       r139.0         r109.7         r86.3

        ANNUAL            158.1       r151.2         95.7        135.8          108.1          85.9

  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2000       I              7.6          6.3         -1.2         29.7           24.6          20.5
            II              3.9          5.8          1.8         -9.6          -12.1         -13.0
           III              0.8         -1.6         -2.3          9.9            6.1           9.1
            IV             -0.6         -6.2         -5.7         -6.5           -9.2          -6.0

        ANNUAL              4.4          3.6         -0.7          7.7            4.2           3.2

  2001       I             -2.1         -8.9         -6.9          3.1           -0.6           5.3
            II             -1.4         -8.2         -6.9          3.6            0.4           5.1
           III              2.4         -7.9        -10.0         -1.0           -1.7          -3.3
            IV              3.5         -8.0        -11.2          5.0            5.4           1.5

        ANNUAL             -0.1         -6.3         -6.2          0.9           -1.9           0.9

  2002       I             10.4          2.1         -7.5          2.8           r1.5          -6.9
            II              5.5          4.9         -0.5          6.7            3.1           1.1
           III              7.9          3.8         -3.8          6.1           r3.9          -1.7
            IV             r2.9        r-2.3        r-5.0         r6.4           r4.3          r3.4

        ANNUAL             r5.6         -1.4        r-6.7          4.1            2.5         r-1.4

  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2000       I              5.2          5.1         -0.1         10.5            7.0           5.0
            II              5.1          5.3          0.2          7.4            4.0           2.2
           III              4.3          3.2         -1.1          8.1            4.5           3.6
            IV              2.9          1.0         -1.9          4.8            1.4           1.8

        ANNUAL              4.4          3.6         -0.7          7.7            4.2           3.2

  2001       I              0.5         -2.9         -3.3         -1.1           -4.2          -1.6
            II             -0.8         -6.3         -5.5          2.3           -1.0           3.2
           III             -0.4         -7.8         -7.4         -0.3           -2.8           0.1
            IV              0.6         -8.2         -8.8          2.6            0.8           2.1

        ANNUAL             -0.1         -6.3         -6.2          0.9           -1.9           0.9

  2002       I              3.6         -5.6         -8.9          2.6           r1.4          -1.0
            II              5.4         -2.4         -7.4          3.3            2.0          -2.0
           III              6.8          0.5         -5.9          5.1           r3.4          -1.6
            IV             r6.6         r2.1        r-4.3         r5.5           r3.2         r-1.1

        ANNUAL             r5.6         -1.4        r-6.7          4.1            2.5         r-1.4

  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                March 6, 2003
  r=revised                                                       Source: Bureau of Labor Statistics


  Table 5. Nondurable manufacturing sector: Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  2000       I            120.6        114.9         95.3        130.6          109.8         108.3
            II            121.8        115.6         95.0        130.4          108.9         107.1
           III            122.6        115.4         94.1        133.2          110.2         108.7
            IV            123.9        114.5         92.4        135.0          110.9         108.9

        ANNUAL            122.2        115.1         94.2        132.3          110.0         108.3

  2001       I            123.1        112.7         91.6        134.7          109.7         109.4
            II            123.6        111.7         90.4        135.5          109.4         109.7
           III            124.3        111.3         89.5        137.2          110.6         110.3
            IV            125.5        110.1         87.8        137.1          110.6         109.2

        ANNUAL            124.1        111.5         89.8        136.1          110.1         109.7

  2002       I            126.8        110.2         86.9        139.1         r111.9         109.7
            II            127.7        110.8         86.7        139.8          111.5         109.5
           III            128.4        111.4         86.7        141.5          112.3         110.2
            IV           r127.3       r110.3         86.6       r143.1         r112.9        r112.4

        ANNUAL            127.6        110.7        r86.7       r140.9          112.1        r110.4

  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2000       I              0.8         -1.8         -2.5         17.8           13.3          17.0
            II              3.8          2.4         -1.4         -0.5           -3.4          -4.2
           III              2.6         -0.9         -3.5          8.7            4.9           5.9
            IV              4.6         -3.0         -7.2          5.6            2.5           0.9

        ANNUAL              3.8          1.1         -2.6          6.7            3.3           2.9

  2001       I             -2.5         -6.0         -3.6         -0.8           -4.4           1.8
            II              1.3         -3.8         -5.0          2.3           -0.8           0.9
           III              2.6         -1.4         -3.8          5.1            4.4           2.4
            IV              3.6         -4.0         -7.4         -0.3            0.0          -3.8

        ANNUAL              1.6         -3.2         -4.7          2.9            0.1           1.3

  2002       I              4.3          0.3         -3.9          6.0           r4.6           1.6
            II              2.9          1.9         -0.9          2.2          r-1.3          -0.7
           III              2.4          2.3         -0.1          5.0           r2.8           2.6
            IV            r-3.4        r-3.9        r-0.5         r4.4           r2.3          r8.1

        ANNUAL              2.8        r-0.7         -3.4          3.5            1.8          r0.7

  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2000       I              3.4          1.6         -1.8          6.1            2.8           2.6
            II              4.4          1.8         -2.5          5.8            2.5           1.4
           III              4.4          1.7         -2.5          7.4            3.8           2.9
            IV              2.9         -0.8         -3.7          7.7            4.2           4.6

        ANNUAL              3.8          1.1         -2.6          6.7            3.3           2.9

  2001       I              2.1         -1.9         -3.9          3.1           -0.1           1.0
            II              1.5         -3.4         -4.8          3.9            0.5           2.4
           III              1.5         -3.5         -4.9          3.0            0.4           1.5
            IV              1.2         -3.8         -5.0          1.5           -0.3           0.3

        ANNUAL              1.6         -3.2         -4.7          2.9            0.1           1.3

  2002       I              3.0         -2.2         -5.0          3.2            2.0           0.2
            II              3.4         -0.8         -4.0          3.2            1.9          -0.2
           III              3.3          0.1         -3.1          3.2           r1.5          -0.1
            IV             r1.5         r0.1        r-1.4          4.4           r2.1          r2.9

        ANNUAL              2.8        r-0.7         -3.4          3.5            1.8          r0.7

  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                March 6, 2003
  r=revised                                                       Source: Bureau of Labor Statistics


  Table 6. Nonfinancial corporations: Productivity, hourly compensation, unit labor costs, unit profits,
  and prices, seasonally adjusted
 
                Output                      Hourly    Real                Unit     Total    Unit   Implicit
      Year      per all-                    compen-   hourly     Unit     non-     unit     pro-   price
      and       employee          Employee  sation    compen-    labor    labor    costs    fits   deflator
      quarter   hour      Output  hours      (1)      sation(2)  costs    costs(6) (7)      (8)      (4)
  ----------------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  2000       I    117.7    147.3     125.1    126.9     106.7     107.8    104.5    106.9    119.5    108.0
            II    118.3    147.9     125.0    127.8     106.6     108.0    106.3    107.5    118.8    108.5
           III    119.5    149.4     125.0    130.4     107.9     109.1    107.1    108.6    109.5    108.6
            IV    119.5    149.2     124.8    131.7     108.2     110.2    108.9    109.8     98.6    108.9

        ANNUAL    118.8    148.4     125.0    129.2     107.4     108.8    106.7    108.2    111.6    108.5

  2001       I    118.8    147.9     124.6    131.3     106.9     110.6    111.6    110.8     93.1    109.3
            II    119.4    147.8     123.7    131.9     106.5     110.4    113.5    111.3     95.4    109.9
           III    120.4    147.7     122.7    132.7     107.0     110.3    115.5    111.7     97.9    110.5
            IV    123.5    149.6     121.2    133.6     107.8     108.2    114.1    109.8    107.6    109.6

        ANNUAL    120.5    148.2     123.0    132.4     107.0     109.9    113.7    110.9     98.5    109.8

  2002       I    124.9    150.8     120.8    134.7    r108.4     107.9    114.0    109.5    107.6    109.4
            II    126.7    152.8     120.6    136.2     108.6     107.5    114.5    109.4    107.8    109.3
           III    128.4    154.2     120.1    138.2    r109.6     107.7    114.8    109.6    104.1    109.1
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2000       I      7.1      9.5       2.3     14.2       9.8       6.7     -0.4      4.7    -19.0      2.2
            II      2.0      1.6      -0.4      2.8      -0.1       0.8      7.0      2.4     -2.2      2.0
           III      4.0      4.0       0.0      8.5       4.7       4.2      3.0      3.9    -27.8      0.6
            IV      0.1     -0.4      -0.5      4.1       1.1       4.0      6.9      4.8    -34.5      0.8

        ANNUAL      3.5      5.0       1.5      6.7       3.2       3.1      3.3      3.1    -15.2      1.2

  2001       I     -2.6     -3.3      -0.7     -1.2      -4.8       1.4     10.1      3.7    -20.2      1.7
            II      2.2     -0.5      -2.7      1.8      -1.3      -0.4      7.1      1.6     10.0      2.2
           III      3.2     -0.3      -3.4      2.5       1.9      -0.6      7.2      1.5     10.8      2.2
            IV     10.7      5.4      -4.8      2.6       2.9      -7.3     -4.9     -6.7     46.1     -3.3

        ANNUAL      1.4     -0.1      -1.5      2.5      -0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      4.7      3.3      -1.3      3.5      r2.2      -1.2     -0.2     -0.9     -0.2     -0.8
            II      5.8      5.3      -0.5      4.5      r0.9      -1.3      1.7     -0.5      0.9     -0.3
           III      5.5      3.8      -1.6      6.1      r3.9       0.6      1.0      0.7    -13.0     -0.5
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  2000       I      3.0      5.7       2.6      5.6       2.3       2.5      2.9      2.6    -12.9      0.9
            II      3.5      5.4       1.9      6.1       2.8       2.6      3.5      2.8    -12.4      1.2
           III      4.2      5.4       1.2      7.6       4.0       3.3      2.5      3.1    -14.2      1.3
            IV      3.3      3.6       0.3      7.3       3.8       3.9      4.1      4.0    -21.8      1.4

        ANNUAL      3.5      5.0       1.5      6.7       3.2       3.1      3.3      3.1    -15.2      1.2

  2001       I      0.9      0.4      -0.4      3.5       0.2       2.6      6.7      3.7    -22.0      1.3
            II      0.9     -0.1      -1.0      3.2      -0.1       2.3      6.8      3.5    -19.7      1.3
           III      0.7     -1.1      -1.8      1.8      -0.8       1.1      7.8      2.9    -10.6      1.7
            IV      3.3      0.3      -2.9      1.4      -0.4      -1.8      4.7      0.0      9.2      0.7

        ANNUAL      1.4     -0.1      -1.5      2.5      -0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      5.2      1.9      -3.0      2.6       1.4      -2.4      2.2     -1.2     15.5      0.0
            II      6.1      3.4      -2.5      3.3      r2.0      -2.6      0.9     -1.7     13.0     -0.6
           III      6.7      4.4      -2.1      4.2       2.5      -2.3     -0.6     -1.9      6.4     -1.3
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        March 6, 2003
  r=revised                                                               Source: Bureau of Labor Statistics


                                     
SOURCES:  Output data are from the Bureau of Economic Analysis and the Census
Bureau of the U.S. Department of Commerce; the Bureau of Labor Statistics,
U.S. Department of Labor; and the Federal Reserve Board.  Compensation and
hours data are from the Bureau of Labor Statistics and the Bureau of Economic
Analysis.

RELIABILITY:  Productivity and cost measures are regularly revised as more
complete information becomes available.  The measures are first published
within 40 days of the close of the reference period; revisions appear 30 days
later, and second revisions after an additional 60 days.  In the business
sector, the third publication (second revision) of a quarterly index of
output per hour of all persons has differed from the initial value by between
-1.5 and +1.7 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 third quarter of 2002.



                            Footnotes, Tables 1-6

(1)  Wages and salaries of employees plus employers' contributions for social
     insurance and private benefit plans.  Except for nonfinancial
     corporations, where there are no self-employed, data also include an
     estimate of wages, salaries, and supplemental payments for the self-
     employed.

(2)  The change for recent quarters is based on the Consumer Price Index for
     all urban consumers (CPI-U).  The trend from 1978-2001 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.