USDL 03-202
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 8:30 A.M. EDT,
THURSDAY, MAY 1, 2003.

Internet address:      http://www.bls.gov/lpc/
Historical, technical  
  information:         (202) 691-5606
Current data:          (202) 691-5200
Media contact:         (202) 691-5902


                           PRODUCTIVITY AND COSTS
                             First Quarter 2003


     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported preliminary productivity data--as measured by output per hour of all
persons--for the first quarter of 2003.  The seasonally adjusted annual rates
of productivity change in the first quarter were:

               2.2 percent in the business sector and
               1.6 percent in the nonfarm business sector.

     These productivity increases occurred as modest output increases were
combined with modest declines in the hours worked.  In the business sector,
output grew 1.7 percent and hours of all persons fell 0.5 percent.  In
nonfarm businesses, output rose 1.4 percent and hours dropped 0.1 percent.
First-quarter measures are summarized in table A and appear in detail in
tables 1 through 5.

     In manufacturing, productivity changes in the first quarter were:

               2.1 percent in manufacturing,
               2.4 percent in durable goods manufacturing, and
               1.7 percent in nondurable goods manufacturing.

     Productivity growth in manufacturing in the first quarter of 2003
reflected decreases in both output and hours; output declined 0.6 percent and
hours of all persons fell 2.6 percent (seasonally adjusted annual rates).
Output and hours in manufacturing, which includes about 15 percent of U.S.
business sector employment, tend to vary more from quarter to quarter than
data for the aggregate business and nonfarm business sectors.

     The data sources and methods used in the preparation of the
manufacturing series differ from those used in preparing the business and
nonfarm business series, and these measures are not directly comparable.
Output measures for business and nonfarm business are based on measures of
gross domestic product prepared by the Bureau of Economic Analysis of the
U.S. Department of Commerce.  Quarterly output measures for manufacturing
reflect indexes of industrial production independently prepared by the Board
of Governors of the Federal Reserve System.  See Technical Notes for further
information on data sources.

------------------------------------------------------------------------
Table A. Productivity and costs: Preliminary first-quarter 2003 measures
(Seasonally adjusted annual rates)
------------------------------------------------------------------------                                                                 
                                                        Real      
                                              Hourly    hourly    Unit
                    Produc-                   compen-   compen-   labor
Sector              tivity   Output  Hours    sation    sation    costs
------------------------------------------------------------------------                   
                      Percent change from preceding quarter

Business            2.2       1.7     -0.5     3.9       0.1       1.7
Nonfarm business    1.6       1.4     -0.1     3.5      -0.3       1.9
Manufacturing       2.1      -0.6     -2.6     4.8       1.0       2.7
  Durable           2.4       0.3     -2.0     4.5       0.7       2.1
  Nondurable        1.7      -1.7     -3.3     5.2       1.3       3.4
------------------------------------------------------------------------
                      Percent change from same quarter a year ago

Business            2.5       2.3     -0.2     3.5       0.6       1.0
Nonfarm business    2.3       2.3      0.0     3.3       0.4       0.9
Manufacturing       2.8       0.5     -2.2     4.1       1.2       1.3
  Durable           4.5       1.5     -2.9     4.7       1.7       0.2
  Nondurable        0.7      -0.6     -1.2     3.4       0.5       2.7
------------------------------------------------------------------------

Business

     Productivity in the business sector increased 2.2 percent between the
fourth quarter 2002 and the first quarter 2003, as output grew 1.7 percent
and hours of all persons engaged in the sector dropped 0.5 percent
(seasonally adjusted annual rates).  Revised data for the fourth quarter of
2002 show that output per hour increased 0.3 percent, reflecting a 1.7-
percent rise in output and a 1.5-percent increase in hours at work.  (See
table 1.)

     Hourly compensation increased 3.9 percent during the first quarter of
2003.  This measure includes wages and salaries, supplements, employer
contributions to employee benefit plans, and taxes. Hourly compensation had
risen 3.6 percent in the previous quarter.  Real hourly compensation, which
takes into account changes in consumer prices, increased 0.1 percent in the
first quarter of 2003, less than the 1.6-percent increase in the fourth
quarter of 2002.

     Unit labor costs rose 1.7 percent in the first quarter of 2003, down
from the 3.3-percent increase in the fourth quarter.  Unit labor costs grew
noticeably slower in the first quarter than in the fourth quarter because the
higher growth in productivity was more than enough to offset the larger
increase in hourly compensation.  Growth in unit labor costs is roughly
equivalent to the change in hourly compensation less the change in output per
hour.

     The implicit price deflator for the business sector, which reflects
changes in both unit labor costs and unit nonlabor payments, rose 1.8 percent
in the first quarter.  The implicit price deflator rose 1.5 percent in the
final quarter of 2002.

Nonfarm business

     Productivity rose 1.6 percent in the nonfarm business sector in first-
quarter 2003, as output increased 1.4 percent and hours of all persons
decreased 0.1 percent (seasonally adjusted annual rates).  In the fourth
quarter of 2002, productivity had increased 0.7 percent, as output rose 1.7
percent and hours increased by 0.9 percent.  (See table 2.)

     Hourly compensation increased at a 3.5 percent annual rate in the first
quarter of 2003, down from the 3.9-percent increase in the fourth quarter.
When the rise in consumer prices was taken into account, real hourly
compensation fell 0.3 percent in the first quarter; it had increased 1.9
percent in the fourth quarter of 2002.

     Unit labor costs grew 1.9 percent in the first quarter of 2003 and 3.2
percent in the fourth quarter of 2002.  The implicit price deflator for
nonfarm business output rose 1.7 percent in the first quarter and 1.4 percent
one quarter earlier.

Manufacturing

     Productivity increased 2.1 percent in manufacturing in the first quarter
of 2003, as output decreased 0.6 percent and hours of all persons declined
2.6 percent (seasonally adjusted annual rates).  Both output and hours also
had fallen in fourth-quarter 2002--by 3.7 and 3.2 percent, respectively--and
productivity declined 0.5 percent.   In the first quarter of 2003,
productivity grew 2.4 percent in durable goods manufacturing, where output
increased 0.3 percent and hours fell 2.0 percent.  Nondurable goods
manufacturing productivity rose 1.7 percent, reflecting a 1.7 percent drop in
output and a 3.3 percent decline in hours of all persons.

     Hourly compensation of all manufacturing workers rose 4.8 percent during
the first quarter, and real hourly compensation increased 1.0 percent.  The
hourly compensation of workers in durable goods manufacturing rose 4.5
percent, while that of employees in nondurable goods manufacturing grew 5.2
percent.

     Unit labor costs in manufacturing rose 2.7 percent in the first quarter
of 2003, as unit labor costs of durable goods producers increased 2.1 percent
and those of nondurable goods producers increased more, 3.4 percent.

Fourth-quarter and annual measures for nonfinancial corporations

     Fourth-quarter and annual 2002 measures of productivity and costs also
were announced today for the nonfinancial corporate sector (tables B, C, and
6).  Output per all-employee hour grew 5.0 percent from the third to the
fourth quarter of 2002, as output grew 4.5 percent and employee hours fell
0.5 percent.  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: Fourth-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 IV  5.0      4.5    -0.5     4.9      2.8    -0.1   20.8      0.9
-------------------------------------------------------------------------
                 Percent change from same quarter a year ago

2002 IV  4.7      3.7    -1.0     3.9      1.6    -0.8    1.9     -0.2
-------------------------------------------------------------------------


     Hourly compensation increased 4.9 percent in the fourth quarter, and
real hourly compensation rose 2.8 percent.  Unit labor costs fell 0.1 percent
in the fourth quarter of 2002--the seventh consecutive drop in these costs.
In the fourth quarter, unit profits increased at a 20.8 percent annual rate
after falling 11.2 percent in the previous quarter.  The implicit price
deflator for nonfinancial corporate output grew 0.9 percent during the fourth
quarter of 2002, compared with a 0.5 percent decrease in the third quarter.

     Productivity grew 5.5 percent in calendar year 2002 for nonfinancial
corporations, following an increase of 1.4 percent in the previous year.
(See table C.)  Nonfinancial corporate output grew 3.2 percent in 2002, and
employee hours decreased 2.2 percent.  This was the second consecutive
decrease in employee hours.

-------------------------------------------------------------------------
Table C. Nonfinancial corporations: Annual changes in productivity and
related measures, 1993-2002
-------------------------------------------------------------------------
Measure              1993 1994 1995 1996 1997 1998 1999  2000  2001  2002  
-------------------------------------------------------------------------
Productivity          0.7  2.4  1.0  3.2  0.9  3.0  2.7   3.5   1.4   5.5  
Output                3.0  6.4  4.2  5.0  5.9  5.8  5.2   5.0  -0.1   3.2  
Hours                 2.3  3.9  3.1  1.8  5.0  2.6  2.4   1.5  -1.5  -2.2  
Hourly compensation   2.0  2.1  1.9  2.7  1.3  5.1  4.4   6.7   2.5   3.3  
Real hourly                                                               
compensation         -0.4  0.0 -0.5  0.0 -0.9  3.6  2.3   3.2  -0.3   1.7

Unit labor costs      1.3 -0.3  0.8 -0.5  0.4  2.0  1.7   3.1   1.0  -2.1  
Unit nonlabor costs   0.2  1.0  0.9 -1.5  0.3  1.2  1.2   3.3   6.5   0.9  
Total unit cost       1.0  0.1  0.8 -0.8  0.4  1.8  1.5   3.1   2.5  -1.3  
Unit profits         13.2 16.3  5.5  9.5  3.1 -9.7 -7.2 -15.2 -11.7   9.0  
Implicit price                                                            
deflator              2.1  1.6  1.4  0.4  0.7  0.3  0.6   1.2   1.2  -0.5
-------------------------------------------------------------------------     
     
     Hourly compensation grew 3.3 percent in 2002, and real hourly
compensation increased 1.7 percent.  Total unit costs fell 1.3 percent,
reflecting a 2.1 decrease in unit labor costs and a 0.9 percent rise in unit
nonlabor costs.  Unit profits rose 9.0 percent in 2002, the first annual
increase since a 3.1-percent rise in 1997.  The implicit price deflator,
which reflects both the unit costs and unit profits measures, dropped 0.5
percent in 2002.

Revised measures

     Current and previous measures for the third and fourth quarters of 2002
for the business, nonfarm business, and manufacturing sectors are compared in
table D.  Some of the quarterly movements differ from those reported on March
6.  Hourly compensation, real hourly compensation, and unit labor costs in
the business and nonfarm business sectors were revised down.  In
manufacturing, fourth quarter output and productivity were revised down while
unit labor costs were revised up.

----------------------------------------------------------------------
Table D. 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
----------------------------------------------------------------------                                                                
                             Fourth quarter 2002
Business:                                                       
  Previous          0.3      1.8      1.5     4.2       2.2       3.9
  Current           0.3      1.7      1.5     3.6       1.6       3.3
Nonfarm business:                                               
  Previous          0.8      1.7      0.9     4.6       2.5       3.8
  Current           0.7      1.7      0.9     3.9       1.9       3.2
Manufacturing:                                                  
  Previous          0.1     -3.2     -3.2     5.5       3.4       5.4
  Current          -0.5     -3.7     -3.2     5.4       3.4       5.9

                             Third quarter 2002
Business:                                                       
  Previous          5.8      5.3     -0.5     5.7       3.5       0.0
  Current           5.8      5.3     -0.5     2.2       0.1      -3.4
Nonfarm business:                                               
  Previous          5.5      5.2     -0.2     5.4       3.1      -0.1
  Current           5.5      5.2     -0.2     1.8      -0.3      -3.4
Manufacturing:                                                  
  Previous          5.5      3.0     -2.4     5.6       3.4       0.1
  Current           5.5      3.0     -2.4     1.4      -0.8      -3.9
----------------------------------------------------------------------

     For third-quarter 2002, hourly compensation was revised down sharply in
the business, nonfarm business, and manufacturing sectors; unit labor costs
were revised down accordingly.  Unit labor costs in the business and nonfarm
business sectors now show declines of 3.4 percent in the third quarter.  In
the manufacturing sector, unit labor costs dropped 3.9 percent in the third
quarter compared to the 0.1-percent increase reported on March 6.

     The Consumer Price Index Research Series has been updated.  This
affected indexes of real hourly compensation for all years.

Revised measures: Nonfinancial Corporations
     
     Productivity and cost measures for nonfinancial corporations for the
third quarter of 2002 also were revised to incorporate more recent
information than was available on March 6.  Productivity and output in this
sector were revised down for the third quarter of 2002.  Productivity grew at
an annual rate of 3.4 percent, compared with the increase of 5.5 percent
published March 6.  Hourly compensation was revised down more than output per
hour, so unit labor costs fell 0.5 percent, rather than increasing.  (See
tables E and 6.)

-----------------------------------------------------------------------------
Table E.  Nonfinancial corporations: Previous and revised productivity and
cost measures
Quarterly percent changes at seasonally adjusted annual rates
-----------------------------------------------------------------------------                                                                     
                                             Real                    
                                    Hourly   hourly  Unit            Implicit
            Produc-                 compen-  compen- labor  Unit     price
            tivity   Output  Hours  sation   sation  costs  profits  deflator
-----------------------------------------------------------------------------                                                                     
                            Third quarter 2002

Previous     5.5      3.8    -1.6     6.1     3.9     0.6   -13.0     -0.5
Current      3.4      1.7    -1.6     2.9     0.7    -0.5   -11.2     -0.5
-----------------------------------------------------------------------------                                      
                                      
                              Next release date

     The next release of Productivity and Costs is scheduled for 8:30 AM EDT,
Wednesday, June 4, 2003.  First-quarter measures for nonfinancial
corporations and revised measures for business, nonfarm business, and
manufacturing will be released at that time.

Current and upcoming changes to productivity and cost data
     
     Measures of employment and hours for self-employed persons and unpaid
family workers in nonfarm establishments, hours of employees in government
enterprises, and employment and hours of all persons working on farms
incorporate data from the Current Population Survey (CPS).  Data from this
survey were revised to incorporate population controls from the 2000
population census and new industry and occupational classification systems.
For the productivity and costs measures, historical measures of employment
and hours through the fourth quarter of 2002 have not yet been revised to
incorporate these changes to the household survey.  First quarter measures
were constructed by calculating the change in the first quarter 2003 data to
revised fourth quarter 2002 data and applying the movements to unrevised
fourth-quarter levels.  The BLS intends to incorporate historical revisions
to the employment and hours measures constructed from the CPS in its Aug. 7
release.
     
     At that time, BLS also will incorporate historical revisions to
employment and hours data for the business and nonfarm business sectors based
on data from the nonfarm payroll series.  These revisions will include
conversion to the 2002 North American Industry Classification System (NAICS)
from the 1987 Standard Industrial Classification (SIC), the annual benchmark
to levels from the Unemployment Insurance program, and new information on
seasonal patterns.

     The Bureau of Labor Statistics discontinued the Hours at Work Survey
(HWS), used to adjust the paid hours of wage and salary employees to their
hours at the workplace, following the 2000 survey.  The survey will be
replaced with a comparable set of measures derived from information on
scheduled hours of work and paid leave collected from employers participating
in the National Compensation Survey.

     The new ratios of hours worked to hours paid will be incorporated into
the measures of employee hours beginning with the release of the second
quarter 2003 data on Aug. 7.  These ratios will be adjusted to levels from
the HWS and will cover the period following 2000.




                               TECHNICAL NOTES
                                      
Labor  Hours: Hours data for the labor productivity and cost measures include
hours for all persons working in the sector-wage and salary workers, the self-
employed,  and  unpaid  family  workers.  The primary  source  of  hours  and
employment data is the BLS Current Employment Statistics (CES) program, which
provides  monthly survey data on the number of jobs held by wage  and  salary
workers in nonfarm establishments.  The CES also provides average weekly paid
hours of production and nonsupervisory workers in these establishments.   The
Office of Productivity and Technology estimates average weekly paid hours  of
nonproduction  and supervisory workers.  Weekly paid hours  are  adjusted  to
hours at work using the BLS Hours at Work survey, conducted for this purpose.
    Data  from  the  BLS Current Population Survey (CPS) are  used  for  farm
labor; in the nonfarm sector, the National Income and Product Accounts (NIPA)
prepared  by  the  Bureau of Economic Analysis (BEA)  of  the  Department  of
Commerce  and  the  CPS  are  used  to measure  labor  input  for  government
enterprises, proprietors, and unpaid family workers.

Output: Business sector output is an annual-weighted index constructed  after
excluding  from  gross domestic product (GDP) the following outputs:  General
government, nonprofit institutions, paid employees of private households, and
the  rental value of owner-occupied dwellings. Corresponding exclusions  also
are  made in labor inputs. Business output accounted for about 77 percent  of
the  value  of  GDP  in 1996. Nonfarm business, which also excludes  farming,
accounted for about 76 percent of GDP in 1996.
    Annual  indexes  for manufacturing and its durable and  nondurable  goods
components  are  constructed by deflating current-dollar  industry  value  of
production  data from the U.S. Bureau of the Census with deflators  from  the
BEA.   These deflators are based on data from the BLS producer price  program
and  other  sources.   The  industry shipments are  aggregated  using  annual
weights,  and  intrasector transactions are removed.  Quarterly manufacturing
output  measures  are  based on the index of industrial  production  prepared
monthly  by the Board of Governors of the Federal Reserve System adjusted  to
be  consistent with annual indexes of manufacturing sector output prepared by
BLS.   Durables  include the following 2-digit SIC industries: Primary  metal
industries;  fabricated metal products; nonelectrical  machinery;  industrial
and  commercial  machinery  and  computer  equipment;  electronic  and  other
electrical  equipment;  transportation  equipment;  instruments;  lumber  and
lumber  products; furniture and fixtures; stone, clay, and glass and concrete
products;  and  miscellaneous  manufactures. Nondurables  include:  Food  and
kindred  products, tobacco products, textile mill products, apparel products,
paper  and  allied products, printing and publishing, chemicals and  chemical
products,  petroleum  refining  and related industries,  rubber  and  plastic
products, and leather and leather products.
   Nonfinancial  corporate output is an annual-weighted index  calculated  on
the  basis of the costs incurred and the incomes earned from production.  The
output  measure excludes the following outputs from GDP: general  government;
nonprofit institutions; employees of private households; the rental value  of
owner-occupied  dwellings; unincorporated business;  and  those  corporations
which  are depository institutions, nondepository institutions, security  and
commodity  brokers, insurance carriers, regulated investment  offices,  small
business  investment offices, and real estate investment trusts. Nonfinancial
corporations accounted for about 53 percent of the value of GDP in 1996.

Productivity:  These productivity measures describe the relationship  between
real  output  and the labor time involved in its production.  They  show  the
changes  from  period to period in the amount of goods and services  produced
per  hour.  Although these measures relate output to hours  at  work  of  all
persons engaged in a sector, they do not measure the specific contribution of
labor,  capital, or any other factor of production. Rather, they reflect  the
joint  effects  of many influences, including changes in technology;  capital
investment; level of output; utilization of capacity, energy, and  materials;
the organization of production; managerial skill; and the characteristics and
effort of the work force.
    Information  in  this release will be made available to  sensory-impaired
individuals  upon request. Voice phone: 202-691-5200; Federal  Relay  Service
number: 1-800-877-8339.


  Table 1. Business sector: Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  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      r111.0      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      r112.1      113.7       119.9      116.0
            II     123.1      142.5     115.8     140.8       112.3      114.4       119.3      116.2
           III     124.8      144.4     115.6    r141.5      r112.3     r113.4      r121.4      116.3
            IV     124.9      145.0     116.1    r142.8      r112.7     r114.3      r120.9     r116.8

        ANNUAL     123.8      143.5     115.9    r141.1      r112.3     r113.9      r120.4      116.3

  2003       I     125.6      145.6     115.9     144.2       112.7      114.8       121.5      117.3
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  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       r-2.7        0.7         4.9        2.2
           III       1.8       -0.9      -2.6       0.9        r0.0       -0.9         6.8        1.8
            IV       7.6        3.5      -3.8       1.4        r1.9       -5.8         6.1       -1.6

        ANNUAL       1.1       -0.2      -1.3       2.9         0.2        1.8         2.4        2.0

  2002       I       8.3        5.9      -2.2       3.0        r1.8       -4.9         9.5        0.3
            II       1.8        0.6      -1.2       4.3        r0.7        2.4        -2.1        0.7
           III       5.8        5.3      -0.5      r2.2        r0.1      r-3.4        r7.0        0.5
            IV       0.3       r1.7       1.5      r3.6        r1.6       r3.3       r-1.4       r1.5

        ANNUAL       4.8        2.7      -2.0      r2.5        r0.9      r-2.2        r5.0        0.4

  2003       I       2.2        1.7      -0.5       3.9         0.1        1.7         1.9        1.8
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2001       I       1.9        1.4      -0.5       4.5        r1.1        2.6         1.4        2.2
            II       0.2       -0.7      -0.9       3.9         0.5        3.6        -0.4        2.1
           III       0.5       -1.0      -1.5       2.0        -0.6        1.5         3.8        2.3
            IV       1.9       -0.3      -2.2       1.5        -0.3       -0.4         4.7        1.4

        ANNUAL       1.1       -0.2      -1.3       2.9         0.2        1.8         2.4        2.0

  2002       I       4.3        1.4      -2.8       1.4         0.2       -2.8         6.8        0.7
            II       4.8        2.3      -2.5       2.4         1.1       -2.3         5.0        0.3
           III       5.9        3.8      -1.9      r2.7        r1.1      r-3.0        r5.1        0.0
            IV       4.0        3.4      -0.6      r3.3        r1.0      r-0.7        r3.2        0.7

        ANNUAL       4.8        2.7      -2.0      r2.5        r0.9      r-2.2        r5.0        0.4

  2003       I       2.5        2.3      -0.2       3.5         0.6        1.0         1.3        1.1
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       May 1, 2003
  r=revised                                                              Source: Bureau of Labor Statistics



  Table 2. Nonfarm business sector: Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  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      r110.1      116.6       117.2      116.8
            IV     119.3      140.4     117.7     137.2       110.7      115.0       119.2      116.5

        ANNUAL     117.5      140.1     119.2     136.6       110.5      116.3       116.4      116.3

  2002       I     121.8      142.5     117.0     138.1       111.1      113.4       121.7      116.4
            II     122.3      142.9     116.8     139.5      r111.3      114.1       121.7      116.8
           III     123.9      144.7     116.8    r140.1      r111.2     r113.1      r123.5      116.9
            IV     124.2      145.3     117.0    r141.5      r111.7     r113.9      r123.1     r117.3

        ANNUAL     123.1      143.9     116.9    r139.8      r111.3     r113.6      r122.5     r116.9

  2003       I     124.7      145.8     117.0     142.7       111.6      114.5       123.5      117.8
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2001       I      -1.4       -0.9       0.5       2.8        -0.9        4.3         1.5        3.3
            II      -0.1       -2.7      -2.6       0.1       r-3.0        0.3         5.1        2.0
           III       2.1       -0.8      -2.9       1.0        r0.1       -1.1         6.8        1.7
            IV       7.2        2.9      -4.0       1.5        r2.1       -5.4         6.9       -1.0

        ANNUAL       1.1       -0.1      -1.2       2.7        -0.1        1.6         2.5        1.9

  2002       I       8.6        6.2      -2.3       2.9         1.6       -5.3         8.8       -0.2
            II       1.7        0.9      -0.7       4.0         0.4        2.3         0.1        1.4
           III       5.5        5.2      -0.2      r1.8       r-0.3      r-3.4        r6.1        0.1
            IV      r0.7        1.7       0.9      r3.9        r1.9       r3.2       r-1.4       r1.4

        ANNUAL       4.8        2.7      -2.0      r2.4        r0.8      r-2.3        r5.3        0.5

  2003       I       1.6        1.4      -0.1       3.5        -0.3        1.9         1.3        1.7
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2001       I       1.7        1.4      -0.3       4.2        r0.8        2.4         1.4        2.1
            II       0.2       -0.6      -0.8       3.7         0.3        3.5        -0.3        2.1
           III       0.6       -0.8      -1.4       1.8       r-0.9        1.2         3.8        2.2
            IV       1.9       -0.4      -2.3       1.4        -0.4       -0.5         5.1        1.5

        ANNUAL       1.1       -0.1      -1.2       2.7        -0.1        1.6         2.5        1.9

  2002       I       4.4        1.3      -2.9       1.4         0.2       -2.9         6.9        0.6
            II       4.9        2.3      -2.5       2.3         1.0       -2.4         5.6        0.5
           III       5.7        3.8      -1.8      r2.5        r0.9      r-3.0        r5.4        0.1
            IV       4.1        3.5      -0.6      r3.2        r0.9      r-0.9        r3.3       r0.7

        ANNUAL       4.8        2.7      -2.0      r2.4        r0.8      r-2.3        r5.3        0.5

  2003       I       2.3        2.3       0.0       3.3         0.4        0.9         1.5        1.2
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       May 1, 2003
  r=revised                                                              Source: Bureau of Labor Statistics



  Table 3. Manufacturing sector: Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100


  2001       I            135.2        134.9         99.8        132.0         r107.5          97.6
            II            135.2        132.8         98.2        133.0          107.4          98.4
           III            136.2        131.1         96.3        133.3         r107.4          97.9
            IV            137.5        129.1         93.9        134.3         r108.4          97.7

        ANNUAL            136.0        132.0         97.1        133.1          107.7          97.9

  2002       I            140.1        129.5         92.4        135.6         r109.1          96.8
            II            141.5        130.6         92.3        137.2          109.4          96.9
           III            143.4        131.6         91.7       r137.7         r109.2         r96.0
            IV           r143.3       r130.3         91.0       r139.5         r110.1         r97.4

        ANNUAL            142.1        130.5         91.8       r137.5         r109.4         r96.8

  2003       I            144.0        130.1         90.4        141.2          110.4          98.0
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.1         -7.6         -5.6          1.6           -2.1           3.7
            II              0.0         -6.2         -6.2          3.1          r-0.2           3.1
           III              3.0         -4.9         -7.6          1.0           r0.1          -1.9
            IV              3.9         -6.1         -9.7          2.9           r3.5          -1.0

        ANNUAL              0.8         -4.9         -5.6          1.5           -1.2           0.8

  2002       I              7.8          1.2         -6.1          3.8           r2.6          -3.7
            II              4.2          3.5         -0.7          5.0            1.4           0.7
           III              5.5          3.0         -2.4         r1.4          r-0.8         r-3.9
            IV            r-0.5        r-3.7         -3.2         r5.4            3.4          r5.9

        ANNUAL              4.5         -1.1         -5.4         r3.3           r1.6         r-1.2

  2003       I              2.1         -0.6         -2.6          4.8            1.0           2.7
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              1.2         -2.4         -3.6          0.5          r-2.9          -0.7
            II              0.2         -5.0         -5.2          2.9           -0.5           2.6
           III              0.6         -5.9         -6.4          0.8           -1.8           0.2
            IV              1.2         -6.2         -7.3          2.1            0.3           1.0

        ANNUAL              0.8         -4.9         -5.6          1.5           -1.2           0.8

  2002       I              3.6         -4.0         -7.4          2.7            1.5          -0.9
            II              4.7         -1.7         -6.1          3.2            1.9          -1.5
           III              5.3          0.3         -4.8         r3.3           r1.6         r-2.0
            IV             r4.2         r1.0         -3.1         r3.9           r1.6         r-0.3

        ANNUAL              4.5         -1.1         -5.4         r3.3           r1.6         r-1.2

  2003       I              2.8          0.5         -2.2          4.1            1.2           1.3
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                May 1, 2003
  r=revised                                                       Source: Bureau of Labor Statistics



  Table 4. Durable manufacturing sector: Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  2001       I            149.3        158.3        106.0        129.4          105.3          86.7
            II            148.8        154.9        104.1        130.5          105.4          87.7
           III            149.6        151.8        101.4        130.2         r104.9          87.0
            IV            151.0        148.6         98.5        131.8         r106.4          87.3

        ANNUAL            149.6        153.4        102.5        130.4          105.5          87.2

  2002       I            154.7        149.4         96.5        132.7          106.7          85.8
            II            156.8        151.2         96.4        134.8          107.5          86.0
           III            159.8        152.6         95.5       r135.2         r107.3         r84.6
            IV           r160.7       r151.5         94.2       r137.3         r108.4         r85.4

        ANNUAL           r158.0        151.2         95.7       r135.0         r107.5         r85.4

  2003       I            161.7        151.6         93.7        138.9          108.6          85.9
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.1         -8.9         -6.9          3.1           -0.6           5.3
            II             -1.4         -8.2         -6.9          3.6           r0.3           5.1
           III              2.4         -7.9        -10.0         -1.0          r-1.9          -3.3
            IV              3.5         -8.0        -11.2          5.0           r5.6           1.5


        ANNUAL             -0.1         -6.3         -6.2          0.9           -1.9           0.9

  2002       I             10.4          2.1         -7.5          2.8            1.5          -6.9
            II              5.5          4.9         -0.5          6.7           r3.0           1.1
           III              7.9          3.8         -3.8         r1.2          r-1.0         r-6.2
            IV             r2.3        r-2.9        r-5.1         r6.3            4.3          r4.0

        ANNUAL              5.6        r-1.5         -6.7         r3.5           r1.9         r-2.0

  2003       I              2.4          0.3         -2.0          4.5            0.7           2.1
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              0.5         -2.9         -3.3         -1.1          r-4.3          -1.6
            II             -0.8         -6.3         -5.5          2.3           -1.0           3.2
           III             -0.4         -7.8         -7.4         -0.3          r-2.9           0.1
            IV              0.6         -8.2         -8.8          2.6            0.8           2.1

        ANNUAL             -0.1         -6.3         -6.2          0.9           -1.9           0.9

  2002       I              3.6         -5.6         -8.9          2.6           r1.3          -1.0
            II              5.4         -2.4         -7.4          3.3            2.0          -2.0
           III              6.8          0.5         -5.9         r3.9           r2.3         r-2.7
            IV             r6.5         r1.9         -4.3         r4.2           r1.9         r-2.1

        ANNUAL              5.6        r-1.5         -6.7         r3.5           r1.9         r-2.0

  2003       I              4.5          1.5         -2.9          4.7            1.7           0.2
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                May 1, 2003
  r=revised                                                       Source: Bureau of Labor Statistics



  Table 5. Nondurable manufacturing sector: Productivity, hourly compensation, and unit labor costs,
  seasonally adjusted
                                                                              Real
       Year           Output per                  Hours       Compensa-       compensa-      Unit 
       and            hour of                     of all      tion per        tion per       labor
       quarter        all persons     Output      persons     hour (1)        hour (2)       costs
  --------------------------------------------------------------------------------------------------
                                             Indexes 1992=100

  2001       I            123.1        112.7         91.6        134.7          109.7         109.4
            II            123.6        111.7         90.4        135.5          109.4         109.7
           III            124.3        111.3         89.5        137.2         r110.5         110.3
            IV            125.5        110.1         87.8        137.1          110.6         109.2

        ANNUAL            124.1        111.5         89.8        136.1          110.1         109.7

  2002       I            126.8        110.2         86.9        139.1          111.9         109.7
            II            127.7        110.8         86.7        139.8          111.5         109.5
           III            128.4        111.4         86.7       r140.5         r111.4        r109.4
            IV           r127.1       r110.1         86.6       r142.0         r112.1        r111.7

        ANNUAL           r127.5       r110.6         86.7       r140.3         r111.7        r110.1

  2003       I            127.6        109.6         85.9        143.8          112.4         112.7
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.5         -6.0         -3.6         -0.8           -4.4           1.8
            II              1.3         -3.8         -5.0          2.3          r-0.9           0.9
           III              2.6         -1.4         -3.8          5.1           r4.1           2.4
            IV              3.6         -4.0         -7.4         -0.3           r0.2          -3.8

        ANNUAL              1.6         -3.2         -4.7          2.9            0.1           1.3

  2002       I              4.3          0.3         -3.9          6.0           r4.7           1.6
            II              2.9          1.9         -0.9          2.2           -1.3          -0.7
           III              2.4          2.3         -0.1         r1.9          r-0.2         r-0.4
            IV            r-4.1        r-4.6         -0.5         r4.3            2.3          r8.9

        ANNUAL             r2.7        r-0.8         -3.4         r3.1           r1.5          r0.4

  2003       I              1.7         -1.7         -3.3          5.2            1.3           3.4
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              2.1         -1.9         -3.9          3.1          r-0.3           1.0
            II              1.5         -3.4         -4.8          3.9            0.5           2.4
           III              1.5         -3.5         -4.9          3.0           r0.3           1.5
            IV              1.2         -3.8         -5.0          1.5           -0.3           0.3

        ANNUAL              1.6         -3.2         -4.7          2.9            0.1           1.3

  2002       I              3.0         -2.2         -5.0          3.2            2.0           0.2
            II              3.4         -0.8         -4.0          3.2            1.9          -0.2
           III              3.3          0.1         -3.1         r2.4           r0.8         r-0.9
            IV             r1.3        r-0.1         -1.4         r3.6           r1.3          r2.3

        ANNUAL             r2.7        r-0.8         -3.4         r3.1           r1.5          r0.4

  2003       I              0.7         -0.6         -1.2          3.4            0.5           2.7
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                May 1, 2003
  r=revised                                                       Source: Bureau of Labor Statistics



  Table 6. Nonfinancial corporations: Productivity, hourly compensation, unit labor costs, unit profits,
  and prices, seasonally adjusted
 
                Output                      Hourly    Real                Unit     Total    Unit   Implicit
      Year      per all-                    compen-   hourly     Unit     non-     unit     pro-   price
      and       employee          Employee  sation    compen-    labor    labor    costs    fits   deflator
      quarter   hour      Output  hours      (1)      sation(2)  costs    costs(6) (7)      (8)      (4)
  ----------------------------------------------------------------------------------------------------------

                                             Indexes 1992=100

  2000       I    117.7    147.3     125.1    126.9    r106.8     107.8    104.5    106.9    119.5    108.0
            II    118.3    147.9     125.0    127.8    r106.7     108.0    106.3    107.5    118.8    108.5
           III    119.5    149.4     125.0    130.4     107.9     109.1    107.1    108.6    109.5    108.6
            IV    119.5    149.2     124.8    131.7     108.2     110.2    108.9    109.8     98.6    108.9

        ANNUAL    118.8    148.4     125.0    129.2     107.4     108.8    106.7    108.2    111.6    108.5

  2001       I    118.8    147.9     124.6    131.3     106.9     110.6    111.6    110.8     93.1    109.3
            II    119.4    147.8     123.7    131.9     106.5     110.4    113.5    111.3     95.4    109.9
           III    120.4    147.7     122.7    132.7    r106.9     110.3    115.5    111.7     97.9    110.5
            IV    123.5    149.6     121.2    133.6     107.8     108.2    114.1    109.8    107.6    109.6

        ANNUAL    120.5    148.2     123.0    132.4     107.0     109.9    113.7    110.9     98.5    109.8

  2002       I    124.9    150.8     120.8    134.7     108.4     107.9    114.0    109.5    107.6    109.4
            II    126.7    152.8     120.6    136.2     108.6     107.5    114.5    109.4    107.8    109.3
           III   r127.7   r153.4     120.1   r137.2    r108.8    r107.4   r115.4    109.6   r104.6    109.1
            IV    129.3    155.1     120.0    138.8     109.6     107.4    114.7    109.3    109.7    109.4

        ANNUAL    127.1    153.0     120.4    136.7     108.8     107.5    114.6    109.5    107.4    109.3

  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2000       I      7.1      9.5       2.3     14.2     r10.1       6.7     -0.4      4.7    -19.0      2.2
            II      2.0      1.6      -0.4      2.8     r-0.5       0.8      7.0      2.4     -2.2      2.0
           III      4.0      4.0       0.0      8.5       4.7       4.2      3.0      3.9    -27.8      0.6
            IV      0.1     -0.4      -0.5      4.1      r1.2       4.0      6.9      4.8    -34.5      0.8

        ANNUAL      3.5      5.0       1.5      6.7       3.2       3.1      3.3      3.1    -15.2      1.2

  2001       I     -2.6     -3.3      -0.7     -1.2      -4.8       1.4     10.1      3.7    -20.2      1.7
            II      2.2     -0.5      -2.7      1.8     r-1.4      -0.4      7.1      1.6     10.0      2.2
           III      3.2     -0.3      -3.4      2.5      r1.6      -0.6      7.2      1.5     10.8      2.2
            IV     10.7      5.4      -4.8      2.6      r3.2      -7.3     -4.9     -6.7     46.1     -3.3

        ANNUAL      1.4     -0.1      -1.5      2.5      -0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      4.7      3.3      -1.3      3.5       2.2      -1.2     -0.2     -0.9     -0.2     -0.8
            II      5.8      5.3      -0.5      4.5       0.9      -1.3      1.7     -0.5      0.9     -0.3
           III     r3.4     r1.7      -1.6     r2.9      r0.7     r-0.5     r3.1     r0.5   r-11.2     -0.5
            IV      5.0      4.5      -0.5      4.9       2.8      -0.1     -2.3     -0.7     20.8      0.9

        ANNUAL      5.5      3.2      -2.2      3.3       1.7      -2.1      0.9     -1.3      9.0     -0.5

  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  2000       I      3.0      5.7       2.6      5.6       2.3       2.5      2.9      2.6    -12.9      0.9
            II      3.5      5.4       1.9      6.1       2.8       2.6      3.5      2.8    -12.4      1.2
           III      4.2      5.4       1.2      7.6       4.0       3.3      2.5      3.1    -14.2      1.3
            IV      3.3      3.6       0.3      7.3       3.8       3.9      4.1      4.0    -21.8      1.4

        ANNUAL      3.5      5.0       1.5      6.7       3.2       3.1      3.3      3.1    -15.2      1.2

  2001       I      0.9      0.4      -0.4      3.5      r0.1       2.6      6.7      3.7    -22.0      1.3
            II      0.9     -0.1      -1.0      3.2     r-0.2       2.3      6.8      3.5    -19.7      1.3
           III      0.7     -1.1      -1.8      1.8     r-0.9       1.1      7.8      2.9    -10.6      1.7
            IV      3.3      0.3      -2.9      1.4      -0.4      -1.8      4.7      0.0      9.2      0.7

        ANNUAL      1.4     -0.1      -1.5      2.5      -0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      5.2      1.9      -3.0      2.6       1.4      -2.4      2.2     -1.2     15.5      0.0
            II      6.1      3.4      -2.5      3.3       2.0      -2.6      0.9     -1.7     13.0     -0.6
           III     r6.1     r3.9      -2.1     r3.3      r1.7     r-2.6    r-0.1     -1.9     r6.9     -1.3
            IV      4.7      3.7      -1.0      3.9       1.6      -0.8      0.6     -0.4      1.9     -0.2

        ANNUAL      5.5      3.2      -2.2      3.3       1.7      -2.1      0.9     -1.3      9.0     -0.5

  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        May 1, 2003
  r=revised                                                               Source: Bureau of Labor Statistics






                                       
SOURCES:  Output data are from the Bureau of Economic Analysis and the Census
Bureau of the U.S. Department of Commerce; the Bureau of Labor Statistics,
U.S. Department of Labor; and the Federal Reserve Board.  Compensation and
hours data are from the Bureau of Labor Statistics and the Bureau of Economic
Analysis.

RELIABILITY:  Productivity and cost measures are regularly revised as more
complete information becomes available.  The measures are first published
within 40 days of the close of the reference period; revisions appear 30 days
later, and second revisions after an additional 60 days.  In the business
sector, the third publication (second revision) of a quarterly index of
output per hour of all persons has differed from the initial value by between
-1.5 and +1.6 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 fourth 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 1978-2002 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.