USDL 02-668
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 8:30 A.M. EST,
WEDNESDAY, DECEMBER 4, 2002.

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 2002
                                      
     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised productivity data--as measured by output per hour of all
persons--for the third quarter of 2002.  The seasonally adjusted annual rates
of productivity growth in the third quarter were:

               5.4 percent in the business sector, and
               5.1 percent in the nonfarm business sector.

In both sectors, upward revisions to productivity were primarily due to
increases in output larger than originally reported.

     In manufacturing, revised productivity increases in the third quarter
were:
               5.5 percent in manufacturing,
               8.8 percent in durable goods manufacturing, and
               1.3 percent in nondurable goods manufacturing.

   Manufacturing productivity rose less than reported on November 7.  This
reflects both a small downward revision to output and a small upward revision
to hours.  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: Revised third-quarter 2002 measures
(Seasonally adjusted annual rates)
----------------------------------------------------------------------------
                                                        Real      
                                               Hourly   hourly    Unit labor
                 Produc-                       compen-  compen-   costs
Sector           tivity    Output    Hours     sation   sation
----------------------------------------------------------------------------
                   Percent change from preceding quarter
Business          5.4       5.2       -0.2       5.3      3.4       -0.1
Nonfarm business  5.1       5.1        0.0       4.9      3.0       -0.2
Manufacturing     5.5       3.2       -2.2       4.4      2.5       -1.0
  Durable         8.8       4.9       -3.5       4.3      2.3       -4.2
  Nondurable      1.3       1.2       -0.1       4.9      3.0        3.5
----------------------------------------------------------------------------
                   Percent change from same quarter a year ago
Business          5.8       3.8       -1.9       3.5      1.9       -2.2
Nonfarm business  5.6       3.8       -1.8       3.3      1.7       -2.2
Manufacturing     5.8       0.8       -4.7       3.6      2.0       -2.1
  Durable         7.5       1.3       -5.8       3.7      2.1       -3.5
  Nondurable      3.4       0.2       -3.1       3.6      2.0        0.1
---------------------------------------------------------------------------- 


Business

     From second quarter to third quarter of 2002, business sector
productivity rose at an annual rate of 5.4 percent, as output increased 5.2
percent and hours of all persons engaged in the sector dropped 0.2 percent
(table 1).  The decline in hours reflects an underlying increase in
employment (0.4 percent) and a decline in average weekly hours (-0.6
percent).  Average weekly hours worked by all persons in the sector also
declined in the second quarter of 2002, by 0.3 percent, and dropped in ten of
the last eleven quarters.

     Hourly compensation increased 5.3 percent during the third quarter of
2002, up from the 4.2-percent rise in the previous quarter. Hourly
compensation includes wages and salaries, supplements, employer contributions
to employee benefit plans, and taxes.  Real hourly compensation, which takes
into account changes in consumer prices, rose 3.4 percent in the third
quarter of 2002.

   Unit labor costs edged down 0.1 percent last quarter and have fallen in
four of the last five quarters.  The implicit price deflator for the business
sector, which reflects changes both in unit labor costs and in unit nonlabor
payments, increased at a 0.4 percent annual rate in the third quarter of
2002, somewhat less than the 0.7-percent increase in the second quarter of
2002.

Nonfarm business

     Output per hour of all persons in the nonfarm business sector increased
5.1 percent during the third quarter of 2002 (table 2).  Output rose 5.1
percent while hours of all persons were unchanged.  As in the larger business
sector, employment rose (0.6 percent) while average weekly hours fell (0.6
percent).  The third quarter productivity increase was higher than the 1.7-
percent rise in the second quarter but lower than the increase registered in
the first quarter of the year, 8.6 percent.

     Hourly compensation grew at a 4.9 percent annual rate in the third
quarter of 2002, up from the 3.9 percent increase in the previous quarter.
When the rise in consumer prices is taken into account, real hourly
compensation rose at a 3.0 percent annual rate in the third quarter of 2002.

   Unit labor costs fell 0.2 percent in the third quarter, following a 2.2
percent increase one quarter earlier.  The implicit price deflator for
nonfarm business rose 0.1 percent in the third quarter of 2002.

Manufacturing

     Productivity increased 5.5 percent in manufacturing in the third quarter
of 2002, as output increased 3.2 percent and hours of all persons fell 2.2
percent (seasonally adjusted annual rates).  In durable goods industries,
productivity grew 8.8 percent as output rose 4.9 percent and hours dropped
3.5 percent.  Productivity grew much more slowly in the nondurable goods
industries, 1.3 percent, reflecting an output increase of 1.2 percent and a
slight decline in hours, 0.1 percent (tables 3, 4, and 5).

     Hourly compensation of all manufacturing workers rose 4.4 percent during
the third quarter of 2002.  In durable goods manufacturing, hourly
compensation rose 4.3 percent during the third quarter.  The increase in
nondurable goods manufacturing was 4.9 percent.  When the increase in
consumer prices is taken into account, real hourly compensation for all
manufacturing workers rose 2.5 percent in the third quarter.

     Unit labor costs in manufacturing fell 1.0 percent in the third quarter,
continuing a series of quarterly declines in these costs that began in the
third quarter of 2001.  Unit labor costs dropped 4.2 percent in durable goods
manufacturing and rose 3.5 percent in nondurable goods manufacturing.

Nonfinancial Corporations

     Third-quarter 2002 measures of productivity and costs also were released
for nonfinancial corporations (tables B and 6).  Output per all-employee hour
grew at a 5.7 percent annual rate, similar to the 5.8 percent increase in the
previous quarter.  Output increased 4.3 percent in the third quarter, and
hours of all employees fell 1.3 percent (seasonally adjusted annual rates).
This decrease in employee hours is the eighth consecutive drop in this
sector.  The nonfinancial corporate sector includes all corporations doing
business in the United States, except those classified as depository
institutions, nondepository institutions, security and commodity brokers,
insurance carriers, regulated investment offices, small business investment
offices, and real estate investment trusts.


-----------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Third-quarter 2002 productivity and cost
measures
(Seasonally adjusted annual rates)
-----------------------------------------------------------------------------
                                           Real                     
                                  Hourly   hourly   Unit            Implicit
         Produc-                  compen-  compen-  labor   Unit    price
Period   tivity   Output  Hours   sation   sation   costs   profits deflator
-----------------------------------------------------------------------------
                 Percent change from preceding quarter
2002 III  5.7      4.3    -1.3     5.7      3.7      0.0    -10.4    -0.6
-----------------------------------------------------------------------------
                 Percent change from same quarter a year ago
2002 III  6.7      4.5    -2.0     4.0      2.4     -2.5      7.2    -1.3
-----------------------------------------------------------------------------
     
     
     Hourly compensation in nonfinancial corporations increased 5.7 percent
in the third quarter, more rapidly than in the second quarter when it rose
4.4 percent.  When the rise in consumer prices is taken into account, real
hourly compensation increased 3.7 percent in the third quarter and 1.0
percent in the second quarter.

     Unit labor costs for the sector were unchanged in the third quarter.
Unit nonlabor costs rose 1.1 percent and unit profits fell 10.4 percent in
the third quarter of 2002.  As a result of these movements, the implicit
price deflator for the output of nonfinancial corporations--which reflects a
weighted average of these three measures--dropped 0.6 percent.  The implicit
price deflator also fell in the previous three quarters.

Revised Measures

     Current and previous measures for the third quarter of 2002 for the
business, nonfarm business, and manufacturing sectors are compared in
table C.  In the business and nonfarm business sectors, increases in
productivity and output are larger than those reported on Nov. 7, based on the
information available at that time.  Unit labor cost measures for these
sectors are correspondingly lower and now show small declines.  In
manufacturing, rates of growth in output and productivity were revised down in
the third quarter.  Unit labor costs were revised up due to the downward
output revision but still show a decline in the quarter.


-----------------------------------------------------------------------
Table C. Previous and revised productivity and related measures
Quarterly percent change at seasonally adjusted annual rate
-----------------------------------------------------------------------
                                                        Real      
                                               Hourly   hourly    Unit
                   Produc-                     compen-  compen-   labor
Sector             tivity   Output   Hours     sation   sation    costs
-----------------------------------------------------------------------
                             Third quarter 2001
Business:                                                         
  Previous          4.3       4.1    -0.1       5.2      3.2       0.9
  Current           5.4       5.2    -0.2       5.3      3.4      -0.1
Nonfarm business:                                                 
  Previous          4.0       4.1     0.1       4.8      2.9       0.8
  Current           5.1       5.1     0.0       4.9      3.0      -0.2
Manufacturing:                                                    
  Previous          5.9       3.4    -2.4       4.5      2.6      -1.3
  Current           5.5       3.2    -2.2       4.4      2.5      -1.0
-----------------------------------------------------------------------


   On Nov. 26, the Bureau of Economic Analysis, U.S. Department of Commerce,
revised the price indexes used to calculate real output of nonfinancial
corporations back to the first quarter of 1999.  The appendix table shows
revised 1999 measures for output, productivity, and unit costs.
                                      
                              NEXT RELEASE DATE
                                      
     The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Thursday, February 6, 2003.  Preliminary fourth-quarter and annual 2002
measures will be released at that time.  Quarterly output measures for the
manufacturing sector will be revised back to 1949 to incorporate the
historical revisions and rebasing of the Indexes of Industrial Production
prepared and published by the Board of Governors of the Federal Reserve
System, scheduled to be released on Dec. 5.

     Scheduled release dates for productivity and costs measures for major
sectors of the U.S. economy in 2003 are:

     
     --------------------------------------------------------
     Reference period                       2003 release date
     ----------------                       -----------------
     2002:                         
     Fourth quarter, Annual                 February 6
     Fourth quarter, Annual (revised)       March 6
     
     2003:                         
     First quarter                          May 1
     First quarter (revised)                June 4
     Second quarter                         August 7
     Second quarter (revised)               September 4
     Third quarter                          November 6
     Third quarter (revised)                December 3
     --------------------------------------------------------


     These dates are based on presently available schedules for the release
of underlying source data in 2003.  Each issue of Productivity and Costs
contains a "Next release date" paragraph that readers should use to confirm
the dates above.

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 August 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       112.2      114.4       119.3      116.2
           III    r124.7     r144.3     115.7    r142.6      r113.2     r114.3      r119.7     r116.3
  ---------------------------------------------------------------------------------------------------------
                       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         0.0       -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      -3.9       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         1.6       -4.9         9.6        0.3
            II       1.8        0.6      -1.2       4.2         0.8        2.4        -2.0        0.7
           III      r5.4       r5.2     r-0.2      r5.3        r3.4      r-0.1        r1.3       r0.4
  ---------------------------------------------------------------------------------------------------------
                      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       -2.4         5.0        0.3
           III      r5.8       r3.8      -1.9      r3.5        r1.9      r-2.2        r3.6        0.0
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       December 4, 2002
  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     138.2       111.1      113.4       121.7      116.4
            II     122.3      142.9     116.8     139.5       111.2      114.0       121.7      116.8
           III    r123.8     r144.7     116.8    r141.2       112.0     r114.0      r121.9      116.9
  ---------------------------------------------------------------------------------------------------------
                       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      -1.5       -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       7.3        2.9      -4.1       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      -2.2       2.9         1.4       -5.3         8.8       -0.2
            II       1.7        0.9      -0.7       3.9         0.5        2.2         0.1        1.4
           III      r5.1       r5.1      r0.0      r4.9        r3.0      r-0.2        r0.4       r0.1
  ---------------------------------------------------------------------------------------------------------
                      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       0.6       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       3.6         0.3        3.5        -0.3        2.1
           III       0.5       -0.8      -1.4       1.8        -0.8        1.2         3.9        2.2
            IV       1.9       -0.4      -2.3       1.4        -0.4       -0.5         5.1        1.5

        ANNUAL       1.1       -0.1      -1.2       2.7        -0.1        1.6         2.5        1.9

  2002       I       4.4        1.3      -2.9       1.4         0.1       -2.9         6.9        0.6
            II       4.9        2.3      -2.5       2.3         1.0       -2.4         5.6        0.5
           III      r5.6       r3.8     r-1.8       3.3         1.7      r-2.2        r4.0        0.1
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       December 4, 2002
  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            135.4        135.1         99.8        132.0          107.4          97.5
            II            135.4        133.0         98.2        133.0          107.4          98.2
           III            136.4        131.3         96.3        133.3          107.5          97.8
            IV            137.6        129.2         93.9        134.3          108.3          97.6

        ANNUAL            136.2        132.1         97.1        133.1          107.7          97.8

  2002       I            140.9        130.2         92.4        135.6          109.0          96.2
            II            142.3        131.3         92.3        136.6          108.9          96.0
           III           r144.2       r132.3        r91.8        138.1          109.6         r95.8
  --------------------------------------------------------------------------------------------------
                         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             -1.5         -7.1         -5.6          1.6           -2.1           3.1
            II              0.0         -6.2         -6.2          3.1           -0.1           3.1
           III              2.9         -4.9         -7.6          1.0            0.3          -1.9
            IV              3.8         -6.3         -9.7          2.9            3.2          -0.9

        ANNUAL              0.9         -4.8         -5.6          1.5           -1.2           0.6

  2002       I              9.7          3.0         -6.1          3.8            2.4          -5.3
            II              4.2          3.5         -0.7          3.2           -0.2          -1.0
           III             r5.5         r3.2        r-2.2         r4.4           r2.5         r-1.0
  --------------------------------------------------------------------------------------------------
                     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              1.3         -2.3         -3.6          0.5           -2.7          -0.9
            II              0.4         -4.9         -5.2          2.9           -0.5           2.5
           III              0.7         -5.7         -6.4          0.8           -1.8           0.1
            IV              1.3         -6.1         -7.3          2.1            0.3           0.8

        ANNUAL              0.9         -4.8         -5.6          1.5           -1.2           0.6

  2002       I              4.0         -3.7         -7.4          2.7            1.4          -1.3
            II              5.1         -1.3         -6.1          2.7            1.4          -2.3
           III             r5.8          0.8        r-4.7          3.6            2.0          -2.1
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 4, 2002
  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            149.0        157.9        106.0        129.4          105.3          86.8
            II            149.1        155.3        104.1        130.5          105.4          87.5
           III            150.1        152.2        101.4        130.2          105.0          86.7
            IV            150.9        148.6         98.5        131.8          106.3          87.3

        ANNUAL            149.8        153.5        102.5        130.4          105.5          87.1

  2002       I            155.7        150.3         96.5        132.7          106.7          85.2
            II            158.0        152.3         96.4        133.6          106.5          84.6
           III           r161.3       r154.2        r95.5        135.0         r107.1          83.7
  --------------------------------------------------------------------------------------------------
                         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             -3.0         -9.7         -6.9          3.1           -0.6           6.2
            II              0.4         -6.5         -6.9          3.6            0.4           3.2
           III              2.7         -7.6        -10.0         -1.0           -1.7          -3.6
            IV              2.3         -9.2        -11.2          5.0            5.4           2.7

        ANNUAL              0.0         -6.2         -6.2          0.9           -1.9           0.8

  2002       I             13.2          4.7         -7.5          2.8            1.3          -9.2
            II              6.0          5.4         -0.5          2.8           -0.6          -3.0
           III              8.8         r4.9        r-3.5         r4.3           r2.3         r-4.2
  --------------------------------------------------------------------------------------------------
                     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              0.3         -3.1         -3.3         -1.1           -4.2          -1.3
            II             -0.6         -6.0         -5.5          2.3           -1.0           3.0
           III             -0.1         -7.5         -7.4         -0.3           -2.8          -0.2
            IV              0.6         -8.2         -8.8          2.6            0.8           2.1

        ANNUAL              0.0         -6.2         -6.2          0.9           -1.9           0.8

  2002       I              4.5         -4.8         -8.9          2.6            1.3          -1.9
            II              5.9         -1.9         -7.4          2.4            1.1          -3.4
           III              7.5         r1.3        r-5.8          3.7            2.1          -3.5
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 4, 2002
  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            123.9        113.4         91.6        134.7          109.7         108.7
            II            123.6        111.7         90.4        135.5          109.4         109.6
           III            124.4        111.3         89.5        137.2          110.6         110.3
            IV            125.9        110.5         87.8        137.1          110.6         108.9

        ANNUAL            124.4        111.7         89.8        136.1          110.1         109.4

  2002       I            127.5        110.8         86.9        139.1          111.8         109.1
            II            128.3        111.2         86.7        140.4          112.0         109.5
           III           r128.7       r111.6         86.7        142.1          112.8        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             -0.1         -3.7         -3.6         -0.8           -4.4          -0.7
            II             -0.9         -5.9         -5.0          2.3           -0.8           3.2
           III              2.5         -1.5         -3.8          5.1            4.4           2.5
            IV              4.9         -2.9         -7.4         -0.3            0.0          -5.0

        ANNUAL              1.8         -2.9         -4.7          2.9            0.1           1.0

  2002       I              5.3          1.2         -3.9          6.0            4.5           0.6
            II              2.4          1.5         -0.9          3.9            0.5           1.5
           III             r1.3         r1.2        r-0.1         r4.9           r3.0          r3.5
  --------------------------------------------------------------------------------------------------
                     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              2.7         -1.3         -3.9          3.1           -0.1           0.4
            II              1.5         -3.4         -4.8          3.9            0.5           2.3
           III              1.5         -3.5         -4.9          3.0            0.4           1.5
            IV              1.6         -3.5         -5.0          1.5           -0.3           0.0

        ANNUAL              1.8         -2.9         -4.7          2.9            0.1           1.0

  2002       I              2.9         -2.3         -5.0          3.2            2.0           0.3
            II              3.7         -0.4         -4.0          3.6            2.3          -0.1
           III             r3.4         r0.2         -3.1          3.6            2.0          r0.1
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 4, 2002
  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   r117.8   r147.3     125.1    126.9     106.7    r107.8   r104.5   r106.9   r119.5   r108.0
            II   r118.3   r147.9     125.0    127.8     106.6    r108.0   r106.3   r107.5   r118.8   r108.5
           III   r119.5   r149.4     125.0    130.4     107.9    r109.1   r107.1   r108.6   r109.5   r108.6
            IV   r119.5   r149.2     124.8    131.7     108.2    r110.2   r108.9   r109.8    r98.6   r108.9

        ANNUAL   r118.8   r148.4     125.0    129.2     107.4    r108.8   r106.7   r108.2   r111.6   r108.5

  2001       I   r118.8   r147.9     124.6    131.3     106.9    r110.6   r111.6   r110.8    r93.1   r109.3
            II   r119.4   r147.8     123.7    131.9     106.5    r110.4   r113.5   r111.3    r95.4   r109.9
           III   r120.4   r147.7     122.7    132.7     107.0    r110.3   r115.5   r111.7    r97.9   r110.5
            IV   r123.5   r149.6     121.2    133.6     107.8    r108.2   r114.1   r109.8   r107.6   r109.6

        ANNUAL   r120.5   r148.2     123.0    132.4     107.0    r109.9   r113.7   r110.9    r98.5   r109.8

  2002       I   r124.9   r150.8     120.8    134.7     108.3    r107.9   r114.0   r109.5   r107.6   r109.4
            II   r126.7   r152.8     120.6    136.2     108.6    r107.5   r114.5   r109.4   r107.8   r109.3
           III    128.4    154.4     120.2    138.1     109.6     107.5    114.8    109.5    104.9    109.1
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2000       I     r7.1     r9.5       2.3     14.2       9.8      r6.7    r-0.4     r4.7   r-19.0     r2.2
            II     r2.0     r1.6      -0.4      2.8      -0.1      r0.8     r7.0     r2.4    r-2.2     r2.0
           III     r4.1     r4.0       0.0      8.5       4.7      r4.2     r3.0     r3.9   r-27.8     r0.6
            IV     r0.1    r-0.4      -0.5      4.1       1.1      r4.0     r6.9     r4.8   r-34.5     r0.8

        ANNUAL     r3.5     r5.0       1.5      6.7       3.2      r3.1     r3.3     r3.1   r-15.2     r1.2

  2001       I     -2.6    r-3.3      -0.7     -1.2      -4.8       1.4     10.1     r3.7    -20.2     r1.7
            II     r2.2    r-0.5      -2.7      1.8      -1.3     r-0.4      7.1     r1.6     10.0     r2.2
           III      3.2     -0.3      -3.4      2.5       1.9     r-0.6      7.2      1.5    r10.8     r2.2
            IV     10.8      5.4      -4.8      2.7       3.0      -7.3    r-4.9     -6.7    r46.1     -3.3

        ANNUAL     r1.4    r-0.1      -1.5      2.5      -0.3      r1.0     r6.5     r2.5   r-11.7     r1.2

  2002       I      4.6      3.3      -1.3      3.4       2.0     r-1.2     -0.2     -0.9    r-0.2     -0.8
            II     r5.8     r5.2      -0.5      4.4       1.0      -1.3      1.7     -0.5      0.9    r-0.3
           III      5.7      4.3      -1.3      5.7       3.7       0.0      1.1      0.3    -10.4     -0.6
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  2000       I     r3.0     r5.7       2.6      5.6       2.3      r2.5     r2.9     r2.6   r-12.9     r0.9
            II     r3.5     r5.4       1.9      6.2       2.8      r2.6     r3.5     r2.8   r-12.4     r1.2
           III     r4.2     r5.4       1.2      7.6       4.0      r3.3     r2.5     r3.1   r-14.2     r1.3
            IV     r3.3     r3.6       0.3      7.3       3.8      r3.9     r4.1     r4.0   r-21.8     r1.4

        ANNUAL     r3.5     r5.0       1.5      6.7       3.2      r3.1     r3.3     r3.1   r-15.2     r1.2

  2001       I     r0.9     r0.4      -0.4      3.5       0.2      r2.6     r6.7     r3.7   r-22.0     r1.3
            II     r0.9    r-0.1      -1.0      3.2      -0.1      r2.3     r6.8     r3.5   r-19.7     r1.3
           III     r0.7    r-1.1      -1.8      1.8      -0.8      r1.1     r7.8     r2.9   r-10.6     r1.7
            IV      3.3      0.3      -2.9      1.4      -0.4      -1.8      4.7     r0.0     r9.2     r0.7

        ANNUAL     r1.4    r-0.1      -1.5      2.5      -0.3      r1.0     r6.5     r2.5   r-11.7     r1.2

  2002       I      5.2     r1.9      -3.1      2.6       1.4     r-2.4     r2.2     -1.2    r15.5      0.0
            II      6.1      3.4      -2.5      3.3       1.9     r-2.6     r0.9     -1.7     13.0     -0.6
           III      6.7      4.5      -2.0      4.0       2.4      -2.5     -0.6     -2.0      7.2     -1.3
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        December 4, 2002
  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 second 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.


 Appendix table 1. Nonfinancial corporations:  Revised 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    139.3     121.9    120.2     104.3     105.1    101.6    104.2    137.1    107.0
           II    114.4    140.3     122.7    120.4     103.8     105.2    102.7    104.5    135.6    107.2
          III    114.7    141.7     123.5    121.2     103.7     105.6    104.5    105.3    127.7    107.2
           IV    115.8    144.0     124.4    122.7     104.2     106.0    104.6    105.7    126.0    107.4

       ANNUAL    114.8    141.3     123.1    121.1     104.1     105.5    103.4    104.9    131.5    107.2

  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  1999      I      4.1      6.1       2.0      8.3       6.5       4.0     -6.3      1.1     -1.7      0.8
           II      0.2      2.9       2.7      0.7      -2.1       0.5      4.3      1.5     -4.4      0.8
          III      1.3      4.0       2.7      2.8      -0.1       1.4      7.2      2.9    -21.3      0.1
           IV      3.6      6.7       3.0      5.2       1.9       1.6      0.6      1.3     -5.3      0.6

       ANNUAL      2.7      5.2       2.4      4.4       2.3       1.7      1.2      1.5     -7.2      0.6

  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  1999      I      4.0      6.2       2.1      5.6       4.0       1.5     -0.1      1.0     -4.7      0.4
           II      2.8      5.4       2.5      4.3       2.3       1.4      0.8      1.2     -3.4      0.7
          III      1.8      4.5       2.6      3.8       1.5       1.9      2.7      2.1    -11.9      0.5
           IV      2.3      4.9       2.6      4.2       1.5       1.9      1.3      1.7     -8.5      0.6

       ANNUAL      2.7      5.2       2.4      4.4       2.3       1.7      1.2      1.5     -7.2      0.6

  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        December 4, 2002
                                                                          Source: Bureau of Labor Statistics