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                           PRODUCTIVITY AND COSTS
                             Second Quarter 2001


     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised productivity data--as measured by output per hour of all
persons--for the second quarter of 2001.  The seasonally adjusted annual
rates of productivity change in the second quarter were:

               2.2 percent in the business sector and
               2.1 percent in the nonfarm business sector.

In both sectors, increases in productivity were smaller than reported on
Aug. 7; both output and hours movements were revised down.  (See table C.)

     In manufacturing, the revised productivity changes in the second quarter
were:

               1.1 percent in manufacturing,
               1.7 percent in durable goods manufacturing, and
               0.0 percent in nondurable goods manufacturing.

     In total manufacturing, the change in productivity was revised to show a
small increase in the second quarter, compared with the preliminary estimate
of a slight decline.  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.  Second-quarter measures are summarized in table A and appear in
detail in tables 1 through 5; the differences between these measures and the
preliminary second-quarter figures issued on Aug. 7 are shown in table C.

     The data sources and methods used in the preparation of the
manufacturing series differ from those used in preparing the business and
nonfarm business series, and these measures are not directly comparable.
Output measures for business and nonfarm business are based on measures of
gross domestic product prepared by the Bureau of Economic Analysis of the
U.S. Department of Commerce.  Quarterly output measures for manufacturing
reflect indexes of industrial production independently prepared by the Board
of Governors of the Federal Reserve System.  See Technical Notes for further
information on data sources.

------------------------------------------------------------------------
Table A. Productivity and costs: Revised second-quarter 2001 measures
(Seasonally adjusted annual rates)
------------------------------------------------------------------------                                                           
                                                        Real      
                                              Hourly    hourly    Unit
                   Produc-                    compen-   compen-   labor
Sector             tivity    Output   Hours   sation    sation    costs
------------------------------------------------------------------------
                      Percent change from preceding quarter

Business           2.2       -0.8      -2.9    5.4       2.2       3.1
Nonfarm business   2.1       -0.5      -2.6    4.8       1.7       2.7
Manufacturing      1.1       -4.8      -5.8    6.2       3.1       5.1
  Durable          1.7       -5.1      -6.7    6.4       3.2       4.6
  Nondurable       0.0       -4.4      -4.4    6.1       3.0       6.1
------------------------------------------------------------------------
                      Percent change from same quarter a year ago

Business           1.5        0.9      -0.6    6.6       3.1       5.0
Nonfarm business   1.5        0.9      -0.5    6.5       3.0       4.9
Manufacturing      2.2       -2.7      -4.9    8.8       5.2       6.4
  Durable          3.3       -2.0      -5.1    9.4       5.8       5.9
  Nondurable       0.8       -3.7      -4.5    7.7       4.2       6.9
------------------------------------------------------------------------

Business

     From the first to the second quarter of 2001, business sector
productivity rose at a 2.2 percent annual rate, as output decreased 0.8
percent and hours of all persons engaged in the sector fell 2.9 percent
(tables A and 1).  This was the first decline in business sector output since
the first quarter of 1993, when it fell 1.5 percent. The drop in hours of all
persons was the largest since a 4.6-percent decline in the first quarter of
1991.

     A 5.4-percent rise in hourly compensation in the second quarter of 2001
was similar to the 5.3-percent increase one quarter earlier (seasonally
adjusted annual rates).  Hourly compensation includes wages and salaries,
supplements, employer contributions to employee benefit plans, and taxes.
Real hourly compensation, which takes into account changes in consumer
prices, increased 2.2 percent in the second quarter of 2001, after rising 1.1
percent in the first quarter.

     Changes in unit labor costs reflect changes in both hourly compensation
and productivity.  Unit labor costs increased 3.1 percent in the second
quarter of 2001, after rising 5.3 percent in the first quarter  (seasonally
adjusted annual rates).  The implicit price deflator for the business sector
rose 1.8 percent in the second quarter, as the increase in unit labor costs
was partially offset by a 0.5 percent drop in unit nonlabor payments.

Nonfarm business

     Productivity in the nonfarm business sector increased 2.1 percent during
the second quarter of 2001, as output declined 0.5 percent and hours of all
persons fell 2.6 percent  (table A).  As in the larger business sector, this
was the first drop in output since the first quarter of 1993, when it fell
1.3 percent.  The drop in hours was the largest since the first quarter of
1991, when hours decreased 4.8 percent.   In the first quarter of 2001,
nonfarm productivity had increased 0.1 percent, as output and hours grew 1.4
and 1.3 percent, respectively (table 2).

     Hourly compensation grew at a 4.8 percent annual rate in the second
quarter of 2001, following a 5.1 percent increase in the first quarter.  When
the rise in consumer prices is taken into account, real hourly compensation
increased 1.7 percent in the second quarter of 2001.

     Unit labor costs increased 2.7 percent in the second quarter of 2001.
This measure had increased 5.0 percent in the first quarter.  Unit nonlabor
payments fell 0.4 percent in the second quarter of 2001, and the implicit
price deflator for nonfarm business output rose 1.6 percent (seasonally
adjusted annual rates).

Manufacturing

     In the second quarter of 2001, productivity increased 1.1 percent in
manufacturing, as the decline in output, 4.8 percent, was outpaced by the
drop in hours of all persons, 5.8 percent (seasonally adjusted annual rates).
The second-quarter increase in output per hour was due entirely to the 1.7-
percent productivity gain in the durable goods sector, as output per hour
remained unchanged in the nondurable goods sector (tables 3, 4, and 5).  In
durable goods, output fell 5.1 percent, and hours declined 6.7 percent.  In
nondurable goods, output and hours both fell 4.4 percent.

     The hourly compensation of all manufacturing workers increased 6.2
percent during the second quarter of 2001, reflecting a 6.4-percent rise in
hourly compensation in durable goods industries and a 6.1-percent increase in
the nondurable goods sector.  Real hourly compensation in the total
manufacturing sector grew 3.1 percent in the second quarter.

     Unit labor costs in manufacturing rose 5.1 percent in the second quarter
of 2001.  Unit labor costs increased 4.6 percent in durable goods and 6.1
percent in nondurable goods.

Nonfinancial corporations

     Preliminary second-quarter 2001 measures of productivity and costs also
were announced today for nonfinancial corporations (tables B and 6).
Productivity increased 2.8 percent during the second quarter, as output rose
0.2 percent while hours fell 2.5 percent (seasonally adjusted annual rates).
The 0.2-percent output increase was the smallest since a 2.3-percent decline
in the first quarter of 1993.  The second-quarter 2001 drop in hours was the
largest since a decline of 2.7 percent in the second quarter of 1991.
Nonfinancial corporations include all corporations doing business in the
United States except those classified as depository institutions,
nondepository institutions, security and commodity brokers, insurance
carriers, regulated investment offices, small business investment offices,
and real estate investment trusts.


-------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Preliminary second-quarter 2001
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

2001 II  2.8      0.2     -2.5   6.2      3.0     3.3    -17.1    2.2
-------------------------------------------------------------------------                 
                 Percent change from same quarter a year ago

2001 II  2.2      1.6     -0.6   7.1      3.5     4.7    -24.4    1.3
-------------------------------------------------------------------------


     Hourly compensation rose 6.2 percent in the second quarter.  When
the rise in consumer prices is taken into account, real hourly
compensation increased 3.0 percent in the second quarter of 2001 (table
6).

     Unit labor costs for nonfinancial corporations increased 3.3 percent
in the second quarter of 2001, less than the 5.0-percent growth in the
first quarter of the year.  Unit profits fell 17.1 percent in the second
quarter, marking four consecutive quarters of declines.  The implicit
price deflator for nonfinancial corporate output rose 2.2 percent in the
second quarter of 2001.

Revised Measures

     Current and previous measures for the second quarter of 2001 for the
business, nonfarm business, and manufacturing sectors are compared in table
C.  The quarterly movements differ from those reported on Aug. 7 based on
information then available.  In the business and nonfarm business sectors,
both output and hours were revised down--output more than hours.  As a result
of these revisions, reported productivity growth was revised down.  Unit
labor costs in both sectors grew more rapidly than first reported.  In the
manufacturing sector, productivity was revised up, as output did not fall as
much as originally reported, and hours were revised down further.  Unit labor
costs in manufacturing grew more slowly than reported on Aug. 7.

----------------------------------------------------------------------
Table C. Previous and revised productivity and related measures
Quarterly percent change at seasonally adjusted annual rate
----------------------------------------------------------------------                                                                
                                                      Real      
                                             Hourly   hourly    Unit
                   Produc-                   compen-  compen-   labor
Sector             tivity   Output   Hours   sation   sation    costs
----------------------------------------------------------------------                                                                
                             Second quarter 2001
Business:                                                       
  Previous         2.8       0.0     -2.7    5.2      2.1       2.4
  Current          2.2      -0.8     -2.9    5.4      2.2       3.1
Nonfarm business:                                               
  Previous         2.5       0.1     -2.4    4.7      1.6       2.1
  Current          2.1      -0.5     -2.6    4.8      1.7       2.7
Manufacturing:                                                  
  Previous        -0.2      -5.8     -5.6    6.2      3.0       6.4
  Current          1.1      -4.8     -5.8    6.2      3.1       5.1
----------------------------------------------------------------------


                              Next release date

     The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Wednesday, Nov. 7, 2001.  Preliminary third-quarter measures for business,
nonfarm business, and manufacturing will be released at that time.
                                      

                                      
                               TECHNICAL NOTES

Labor Hours: Hours data for the labor productivity and cost measures include
hours for all persons working in the sector-wage and salary workers, the self-
employed, and unpaid family workers.  The primary source of hours and
employment data is the BLS Current Employment Statistics (CES) program, which
provides monthly survey data on the number of jobs held by wage and salary
workers in nonfarm establishments.  The CES also provides average weekly paid
hours of production and nonsupervisory workers in these establishments.
Average weekly paid hours of nonproduction and supervisory workers are
estimated by the Office of Productivity and Technology.  Weekly paid hours
are adjusted to hours at work using the BLS Hours at Work survey, conducted
for this purpose.
     Data from the BLS Current Population Survey (CPS) are used for farm
labor; in the nonfarm sector, the National Income and Product Accounts (NIPA)
prepared by the Bureau of Economic Analysis (BEA) of the Department of Com
merce and the CPS are used to measure labor input for government enterprises,
proprietors, and unpaid family workers.

Output: Business sector output is an annual-weighted index constructed after
excluding from gross domestic product (GDP) the following outputs: General
government, nonprofit institutions, paid employees of private households, and
the rental value of owner-occupied dwellings. Corresponding exclusions also
are made in labor inputs. Business output accounted for about 77 percent of
the value of GDP in 1996. Nonfarm business, which also excludes farming,
accounted for about 76 percent of GDP in 1996.
     Annual indexes for manufacturing and its durable and nondurable goods
components are constructed by deflating current-dollar industry value of
production data from the U.S. Bureau of the Census with deflators from the
BEA.  These deflators are based on data from the BLS producer price program
and other sources.  The industry shipments are aggregated using annual
weights, and intrasector transactions are removed.  Quarterly manufacturing
output measures are based on the index of industrial production prepared
monthly by the Board of Governors of the Federal Reserve System adjusted to
be consistent with annual indexes of manufacturing sector output prepared by
BLS.  Durables include the following 2-digit SIC industries: Primary metal
industries; fabricated metal products; nonelectrical machinery; industrial
and commercial machinery and computer equipment; electronic and other
electrical equipment; transportation equipment; instruments; lumber and
lumber products; furniture and fixtures; stone, clay, and glass and concrete
products; and miscellaneous manufactures. Nondurables include: Food and
kindred products, tobacco products, textile mill products, apparel products,
paper and allied products, printing and publishing, chemicals and chemical
products, petroleum refining and related industries, rubber and plastic
products, and leather and leather products.
     Nonfinancial corporate output is an annual-weighted index constructed by
excluding from GDP the following outputs: General government; nonprofit
institutions; employees of private households; the rental value of owner-oc
cupied dwellings; unincorporated business; and those corporations which are
depository institutions, nondepository institutions, security and commodity
brokers, insurance carriers, regulated investment offices, small business
investment offices, and real estate investment trusts. Nonfinancial
corporations accounted for about 53 percent of the value of GDP in 1996.

Productivity: These productivity measures describe the relationship between
real output and the labor time involved in its production. They show the
changes from period to period in the amount of goods and services produced
per hour. Although these measures relate output to hours at work of all
persons engaged in a sector, they do not measure the specific contribution of
labor, capital, or any other factor of production. Rather, they reflect the
joint effects of many influences, including changes in technology; capital
investment; level of output; utilization of capacity, energy, and materials;
the organization of production; managerial skill; and the characteristics and
effort of the work force.

     Information in this release will be made available to sensory-impaired
individuals upon request. Voice phone: 202-691-5200; Federal Relay Service
number: 1-800-877-8339.

Table 1. Business sector: Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  1999       I     112.8      132.4     117.4     123.2       106.6      109.2       114.5      111.2
            II     112.5      132.9     118.2     124.5       107.0      110.7       112.6      111.4
           III     113.3      134.6     118.8     126.1       107.5      111.3       112.3      111.7
            IV     115.2      137.8     119.6     127.2       107.6      110.4       114.8      112.0

        ANNUAL     113.4      134.4     118.5     125.2       107.3      110.4       113.6      111.6

  2000       I     115.0      138.6     120.5     129.0       108.1      112.1       114.2      112.9
            II     117.1      140.8     120.2     131.7       109.6      112.5       115.2      113.5
           III     117.4      141.2     120.3     133.8       110.3      114.0       113.9      113.9
            IV     118.2      141.9     120.0     136.8       112.0      115.7       112.1      114.4

        ANNUAL     116.9      140.6     120.3     132.8       110.1      113.6       113.9      113.7

  2001       I     118.2      142.3     120.4     138.6       112.3      117.2       111.8      115.2
            II    r118.9     r142.0     119.5     140.4      r113.0     r118.1      r111.6     r115.7
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1999       I       3.1        3.5       0.4       4.7         3.1        1.5         0.9        1.3
            II      -1.1        1.6       2.7       4.2         1.4        5.4        -6.3        0.8
           III       2.9        5.1       2.1       5.1         2.0        2.1        -1.1        0.9
            IV       7.0        9.9       2.7       3.5         0.3       -3.2         9.1        1.2

        ANNUAL       2.5        4.6       2.0       4.6         2.4        2.0        -0.8        0.9

  2000       I      -0.6        2.2       2.9       5.9         1.8        6.5        -2.0        3.2
            II       7.3        6.5      -0.7       8.6         5.5        1.2         3.6        2.1
           III       1.0        1.3       0.3       6.5         2.9        5.5        -4.5        1.7
            IV       3.0        1.8      -1.1       9.4         6.3        6.3        -6.1        1.6

        ANNUAL       3.1        4.6       1.5       6.0         2.6        2.9         0.3        1.9

  2001       I       0.0        1.2       1.2       5.3         1.1        5.3        -1.3        2.9
            II      r2.2      r-0.8     r-2.9      r5.4        r2.2       r3.1       r-0.5       r1.8
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1999       I       2.6        4.5       1.9       4.8         3.2        2.2        -1.4        0.8
            II       2.3        4.4       2.1       4.5         2.5        2.2        -1.2        0.9
           III       2.3        4.6       2.2       4.5         2.2        2.2        -1.2        0.9
            IV       2.9        5.0       2.0       4.4         1.7        1.4         0.5        1.1

        ANNUAL       2.5        4.6       2.0       4.6         2.4        2.0        -0.8        0.9

  2000       I       2.0        4.7       2.6       4.7         1.4        2.6        -0.3        1.5
            II       4.1        5.9       1.8       5.7         2.4        1.6         2.3        1.9
           III       3.6        4.9       1.3       6.1         2.6        2.4         1.4        2.1
            IV       2.6        3.0       0.3       7.6         4.1        4.8        -2.3        2.1

        ANNUAL       3.1        4.6       1.5       6.0         2.6        2.9         0.3        1.9

  2001       I       2.8        2.7      -0.1       7.4         3.9        4.6        -2.1        2.1
            II      r1.5       r0.9      -0.6       6.6         3.1       r5.0       r-3.1        2.0
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       September 5, 2001
  r=revised                                                              Source: Bureau of Labor Statistics


Table 2. Nonfarm business sector: Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  1999       I     112.2      132.8     118.3     122.3       105.9      109.0       116.0      111.5
            II     111.9      133.2     119.1     123.6       106.2      110.5       114.2      111.8
           III     112.7      134.9     119.8     125.1       106.8      111.1       114.0      112.1
            IV     114.7      138.1     120.4     126.4       107.0      110.2       116.5      112.5

        ANNUAL     112.9      134.8     119.4     124.4       106.5      110.2       115.2      112.0

  2000       I     114.5      138.8     121.2     128.4       107.6      112.1       116.0      113.5
            II     116.3      141.0     121.3     130.7       108.8      112.4       116.7      114.0
           III     116.7      141.4     121.2     133.0       109.7      114.0       115.4      114.5
            IV     117.4      142.1     121.0     135.9       111.3      115.8       113.5      114.9

        ANNUAL     116.2      140.8     121.2     132.0       109.4      113.6       115.4      114.2

  2001       I     117.4      142.5     121.4     137.6       111.5      117.2       113.1      115.7
            II    r118.0     r142.3    r120.6    r139.2      r112.0     r118.0      r113.0      116.2
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1999       I       2.4        3.5       1.0       3.8         2.2        1.3         1.9        1.5
            II      -1.4        1.4       2.8       4.2         1.3        5.6        -5.9        1.2
           III       3.0        5.3       2.2       5.2         2.1        2.1        -0.8        1.0
            IV       7.4        9.8       2.3       4.2         0.9       -2.9         9.1        1.4

        ANNUAL       2.3        4.6       2.2       4.4         2.2        2.0        -0.4        1.1

  2000       I      -0.6        2.0       2.6       6.2         2.1        6.8        -1.7        3.5
            II       6.3        6.5       0.2       7.6         4.5        1.2         2.6        1.7
           III       1.4        1.2      -0.2       7.1         3.5        5.6        -4.4        1.8
            IV       2.3        1.8      -0.5       8.9         5.8        6.4        -6.6        1.5

        ANNUAL       3.0        4.5       1.5       6.1         2.7        3.1         0.2        2.0

  2001       I       0.1        1.4       1.3       5.1         0.9        5.0        -1.2        2.7
            II      r2.1      r-0.5     r-2.6      r4.8        r1.7       r2.7       r-0.4       r1.6
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1999       I       2.4        4.5       2.1       4.6         3.0        2.1        -1.1        0.9
            II       1.9        4.3       2.4       4.2         2.3        2.3        -0.9        1.1
           III       2.1        4.6       2.4       4.3         1.9        2.1        -0.8        1.0
            IV       2.8        4.9       2.1       4.3         1.6        1.5         0.9        1.3

        ANNUAL       2.3        4.6       2.2       4.4         2.2        2.0        -0.4        1.1

  2000       I       2.0        4.6       2.5       5.0         1.6        2.9         0.0        1.8
            II       4.0        5.9       1.8       5.8         2.4        1.8         2.2        1.9
           III       3.6        4.8       1.2       6.3         2.8        2.6         1.3        2.1
            IV       2.3        2.8       0.5       7.4         4.0        5.0        -2.6        2.2

        ANNUAL       3.0        4.5       1.5       6.1         2.7        3.1         0.2        2.0

  2001       I       2.5        2.7       0.2       7.2         3.7        4.6        -2.5        2.0
            II      r1.5       r0.9      -0.5      r6.5        r3.0       r4.9       r-3.2       r1.9
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       September 5, 2001
  r=revised                                                              Source: Bureau of Labor Statistics


Table 3. Manufacturing sector: Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  1999       I            127.4        132.8        104.3        119.9          103.7          94.1
            II            128.4        134.1        104.5        121.3          104.2          94.4
           III            129.8        135.8        104.7        123.0          104.9          94.7
            IV            132.7        138.0        104.0        124.4          105.3          93.7

        ANNUAL            129.6        135.2        104.3        122.1          104.6          94.3

  2000       I            135.2        140.3        103.8        125.9          105.5          93.2
            II            137.3        143.1        104.2        128.1          106.6          93.3
           III            139.4        144.4        103.6        131.2          108.3          94.1
            IV            141.3        143.9        101.8        135.2          110.7          95.7

        ANNUAL            138.3        142.9        103.4        130.1          107.8          94.1

  2001       I            140.0        140.9        100.6        137.2          111.3          98.0
            II           r140.4       r139.1        r99.1        139.3          112.1         r99.3
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1999       I              5.1          2.5         -2.5          2.6            1.1          -2.3
            II              3.3          4.1          0.8          4.8            1.9           1.4
           III              4.4          5.1          0.7          5.7            2.6           1.2
            IV              9.3          6.4         -2.6          4.7            1.4          -4.2

        ANNUAL              4.5          3.7         -0.8          4.0            1.9          -0.5

  2000       I              7.6          7.1         -0.5          5.1            1.0          -2.3
            II              6.5          8.0          1.5          7.0            3.9           0.5
           III              6.4          3.7         -2.5         10.3            6.5           3.7
            IV              5.3         -1.5         -6.5         12.6            9.4           6.9

        ANNUAL              6.7          5.7         -0.9          6.5            3.1          -0.2

  2001       I             -3.6         -8.1         -4.7          6.2            1.9          10.1
            II             r1.1        r-4.8        r-5.8          6.2           r3.1          r5.1
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1999       I              4.5          2.9         -1.5          3.9            2.3          -0.7
            II              4.3          3.3         -1.0          3.6            1.7          -0.7
           III              3.7          3.8          0.1          4.0            1.7           0.3
            IV              5.5          4.5         -0.9          4.4            1.7          -1.0

        ANNUAL              4.5          3.7         -0.8          4.0            1.9          -0.5

  2000       I              6.1          5.7         -0.4          5.1            1.7          -1.0
            II              6.9          6.7         -0.2          5.6            2.2          -1.2
           III              7.4          6.3         -1.0          6.7            3.2          -0.6
            IV              6.5          4.3         -2.1          8.7            5.2           2.1

        ANNUAL              6.7          5.7         -0.9          6.5            3.1          -0.2

  2001       I              3.6          0.4         -3.1          9.0            5.4           5.2
            II             r2.2        r-2.7        r-4.9          8.8            5.2          r6.4
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                September 5, 2001
  r=revised                                                       Source: Bureau of Labor Statistics


Table 4. Durable manufacturing sector: Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  1999       I            140.2        153.8        109.7        117.7          101.9          84.0
            II            142.2        156.2        109.8        119.4          102.6          84.0
           III            144.0        159.5        110.7        121.1          103.3          84.1
            IV            147.5        162.2        110.0        122.6          103.7          83.1

        ANNUAL            143.5        157.9        110.1        120.2          103.0          83.8

  2000       I            152.0        167.2        110.0        124.0          103.9          81.6
            II            155.9        172.6        110.8        126.2          105.0          81.0
           III            159.7        176.0        110.2        129.5          106.8          81.1
            IV            162.0        175.9        108.5        133.9          109.6          82.6

        ANNUAL            157.4        172.9        109.9        128.4          106.4          81.6

  2001       I            160.3        171.5        106.9        136.0          110.2          84.8
            II           r161.0       r169.2        105.1        138.1          111.1         r85.8
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1999       I              7.5          3.0         -4.2          4.0            2.4          -3.2
            II              5.8          6.2          0.4          5.8            2.9           0.0
           III              5.2          8.7          3.4          5.8            2.7           0.6
            IV             10.1          7.1         -2.7          5.0            1.7          -4.6

        ANNUAL              6.9          6.1         -0.8          4.7            2.5          -2.1

  2000       I             12.6         12.7          0.1          4.8            0.8          -6.9
            II             10.7         13.7          2.8          7.1            4.1          -3.2
           III             10.3          8.1         -1.9         10.9            7.1           0.6
            IV              5.9         -0.4         -6.0         14.3           11.0           7.9

        ANNUAL              9.7          9.5         -0.2          6.8            3.3          -2.6

  2001       I             -4.1         -9.6         -5.8          6.3            2.1          10.9
            II             r1.7        r-5.1        r-6.7         r6.4            3.2          r4.6
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1999       I              7.4          5.7         -1.6          4.3            2.7          -2.9
            II              7.3          6.1         -1.1          4.4            2.4          -2.8
           III              5.8          6.4          0.5          4.9            2.6          -0.9
            IV              7.1          6.2         -0.8          5.2            2.4          -1.9

        ANNUAL              6.9          6.1         -0.8          4.7            2.5          -2.1

  2000       I              8.4          8.7          0.3          5.3            2.0          -2.8
            II              9.6         10.5          0.9          5.7            2.3          -3.6
           III             10.9         10.4         -0.5          6.9            3.4          -3.6
            IV              9.8          8.4         -1.3          9.2            5.7          -0.5

        ANNUAL              9.7          9.5         -0.2          6.8            3.3          -2.6

  2001       I              5.5          2.6         -2.8          9.6            6.0           3.9
            II             r3.3        r-2.0         -5.1          9.4            5.8          r5.9
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                September 5, 2001
  r=revised                                                       Source: Bureau of Labor Statistics


Table 5. Nondurable manufacturing sector: Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  1999       I            116.6        113.1         97.0        122.1          105.7         104.8
            II            116.6        113.5         97.3        123.1          105.8         105.5
           III            117.8        113.7         96.6        124.5          106.3         105.8
            IV            120.1        115.3         96.0        125.8          106.5         104.8

        ANNUAL            117.8        113.9         96.7        123.9          106.1         105.2

  2000       I            120.7        115.4         95.6        127.5          106.9         105.7
            II            121.2        115.8         95.5        129.5          107.8         106.8
           III            121.8        115.3         94.7        132.4          109.2         108.7
            IV            123.2        114.4         92.9        135.4          110.9         110.0

        ANNUAL            121.7        115.2         94.7        131.2          108.7         107.8

  2001       I            122.2        112.7         92.2        137.5          111.4         112.5
            II           r122.2       r111.4        r91.2        139.5          112.3        r114.2
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1999       I              1.6          1.8          0.2          0.7           -0.9          -0.9
            II              0.2          1.5          1.3          3.1            0.3           2.9
           III              4.0          0.7         -3.1          4.9            1.9           0.9
            IV              8.2          5.6         -2.5          4.2            0.9          -3.7

        ANNUAL              1.6          0.7         -0.9          2.8            0.7           1.2

  2000       I              1.9          0.5         -1.4          5.5            1.4           3.5
            II              1.8          1.2         -0.6          6.4            3.4           4.5
           III              1.9         -1.5         -3.4          9.1            5.4           7.1
            IV              4.5         -3.1         -7.3          9.6            6.5           4.9

        ANNUAL              3.3          1.2         -2.1          5.9            2.4           2.4

  2001       I             -3.0         -5.9         -3.0          6.2            1.9           9.4
            II             r0.0        r-4.4        r-4.4          6.1            3.0          r6.1
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1999       I              1.1         -0.3         -1.5          3.2            1.6           2.0
            II              0.7          0.0         -0.7          2.4            0.5           1.7
           III              1.2          0.7         -0.5          2.5            0.2           1.3
            IV              3.4          2.4         -1.0          3.2            0.5          -0.2

        ANNUAL              1.6          0.7         -0.9          2.8            0.7           1.2

  2000       I              3.5          2.0         -1.4          4.4            1.1           0.9
            II              3.9          2.0         -1.9          5.2            1.9           1.2
           III              3.4          1.4         -2.0          6.3            2.7           2.8
            IV              2.5         -0.8         -3.2          7.6            4.1           5.0

        ANNUAL              3.3          1.2         -2.1          5.9            2.4           2.4

  2001       I              1.3         -2.4         -3.6          7.8            4.3           6.5
            II             r0.8        r-3.7        r-4.5         r7.7            4.2          r6.9
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                September 5, 2001
  r=revised                                                       Source: Bureau of Labor Statistics


Table 6. Nonfinancial corporations: Productivity, hourly compensation, unit labor costs, unit profits,
  and prices, seasonally adjusted
 
                Output                      Hourly    Real                Unit     Total    Unit   Implicit
      Year      per all-                    compen-   hourly     Unit     non-     unit     pro-   price
      and       employee          Employee  sation    compen-    labor    labor    costs    fits   deflator
      quarter   hour      Output  hours      (1)      sation(2)  costs    costs(6) (7)      (8)      (4)
  ----------------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  1999       I    114.3    139.2     121.8    119.2     103.2     104.3    103.0    103.9    141.8    107.1
            II    114.4    140.3     122.6    120.4     103.5     105.2    103.7    104.8    135.8    107.5
           III    115.2    142.3     123.4    121.9     104.0     105.8    105.1    105.6    128.2    107.5
            IV    116.5    145.0     124.5    123.1     104.1     105.6    105.0    105.4    131.1    107.6

        ANNUAL    115.1    141.7     123.1    121.2     103.8     105.2    104.2    105.0    134.2    107.4

  2000       I    117.7    147.5     125.4    124.7     104.5     106.0    105.5    105.9    134.3    108.3
            II    119.7    150.3     125.5    127.2     105.8     106.2    105.3    106.0    137.8    108.7
           III    120.9    151.9     125.6    129.3     106.6     106.9    105.6    106.6    133.8    108.9
            IV    121.4    152.4     125.6    132.3     108.3     109.0    106.0    108.2    118.5    109.0

        ANNUAL    119.9    150.5     125.5    128.3     106.4     107.0    105.6    106.7    131.0    108.7

  2001       I    121.5    152.6     125.6    134.1     108.7     110.3    107.5    109.6    109.2    109.5
            II    122.4    152.7     124.8    136.1     109.5     111.2    109.2    110.7    104.2    110.1
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  1999       I      3.9      6.0       2.0      4.5       2.9       0.6     -1.0      0.1     12.4      1.4
            II      0.4      3.2       2.8      4.2       1.3       3.8      2.8      3.6    -16.0      1.2
           III      2.8      5.6       2.7      4.9       1.9       2.1      5.5      3.0    -20.4      0.3
            IV      4.5      8.0       3.3      3.8       0.6      -0.6     -0.7     -0.6      9.1      0.3

        ANNUAL      3.0      5.5       2.4      4.5       2.3       1.4      2.0      1.6     -5.3      0.8

  2000       I      4.0      7.2       3.0      5.5       1.4       1.4      2.2      1.6     10.2      2.5
            II      7.1      7.6       0.5      8.1       5.0       0.9     -0.7      0.4     11.0      1.5
           III      4.0      4.4       0.4      6.8       3.1       2.7      0.8      2.2    -11.1      0.7
            IV      1.6      1.3      -0.3      9.6       6.5       7.9      1.7      6.2    -38.6      0.6

        ANNUAL      4.1      6.2       2.0      5.9       2.5       1.7      1.3      1.6     -2.3      1.2

  2001       I      0.6      0.7       0.0      5.7       1.5       5.0      5.8      5.2    -27.8      1.8
            II      2.8      0.2      -2.5      6.2       3.0       3.3      6.5      4.2    -17.1      2.2
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  1999       I      4.0      6.1       2.0      4.7       3.1       0.7      1.3      0.8     -1.3      0.6
            II      2.9      5.4       2.4      4.4       2.4       1.4      1.8      1.5     -3.2      1.0
           III      2.2      4.9       2.6      4.4       2.0       2.1      3.3      2.4    -11.5      0.8
            IV      2.9      5.7       2.7      4.4       1.7       1.5      1.6      1.5     -4.9      0.8

        ANNUAL      3.0      5.5       2.4      4.5       2.3       1.4      2.0      1.6     -5.3      0.8

  2000       I      2.9      6.0       3.0      4.6       1.3       1.7      2.4      1.9     -5.3      1.1
            II      4.6      7.1       2.4      5.6       2.2       0.9      1.6      1.1      1.5      1.1
           III      4.9      6.8       1.8      6.0       2.5       1.1      0.4      0.9      4.3      1.3
            IV      4.2      5.1       0.9      7.5       4.0       3.2      1.0      2.6     -9.6      1.3

        ANNUAL      4.1      6.2       2.0      5.9       2.5       1.7      1.3      1.6     -2.3      1.2

  2001       I      3.3      3.4       0.1      7.5       4.0       4.1      1.9      3.5    -18.7      1.2
            II      2.2      1.6      -0.6      7.1       3.5       4.7      3.7      4.4    -24.4      1.3
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        September 5, 2001
  r=revised                                                               Source: Bureau of Labor Statistics




1

SOURCES:  Output data are from the Bureau of Economic Analysis and the Census 
Bureau of the U.S. Department of Commerce; the Bureau of Labor Statistics, 
U.S. Department of Labor; and the Federal Reserve Board.  Compensation and 
hours data are from the Bureau of Labor Statistics and the Bureau of Economic 
Analysis.

RELIABILITY:  Productivity and cost measures are regularly revised as more 
complete information becomes available.  The measures are first published 
within 40 days of the close of the reference period; revisions appear 30 days 
later and second revisions after an additional 60 days.  In the business 
sector, the third publication (second revision) of a quarterly index of 
output per hour of all persons has differed from the initial value by between 
-1.6 and +1.8 index points approximately 95 percent of the time.  This 
interval is based on the performance of this measure between the fourth 
quarter of 1995 and the first quarter of 2001.

                        Footnotes, Tables 1-6

 (1)  Wages and salaries of employees plus employers' contributions for 
social insurance and private benefit plans.  Except for nonfinancial 
corporations, where there are no self-employed, data also include an 
estimate of wages, salaries, and supplemental payments for the self-
employed.
 (2)  The change for recent quarters is based on the Consumer Price Index for 
all urban consumers (CPI-U).  The trend from 1978-2000 is based on the 
Consumer Price Index research series (CPI-U-RS).
 (3)  Unit nonlabor payments include profits, capital consumption allowances, 
interest, rental income of persons, and indirect taxes.
 (4)  Current dollar output divided by the output index.
 (5)  Quarterly changes:  Percent change compounded at annual rate from the 
original data rather than index numbers.  Annual changes:  Percent 
change between annual average levels.
 (6)  Unit nonlabor costs include capital consumption allowances, interest, 
rental income of persons, and indirect taxes.  For nonfinancial 
corporations, rental income of persons is zero by definition.
 (7)  Total unit costs are the sum of unit labor and nonlabor costs.
 (8)  Unit profits include corporate profits with inventory valuation and 
capital consumption adjustments