USDL 98-480
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THURSDAY, DECEMBER 3, 1998.
                                
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                           PRODUCTIVITY AND COSTS
                             Third Quarter 1998


     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised productivity data--as measured by output per hour of all
persons--for the third quarter of 1998.  The seasonally adjusted annual rates
of productivity growth in the third quarter were:

               3.1 percent in the business sector, and
               3.0 percent in the nonfarm business sector.

These increases in labor productivity are larger than those originally
reported for the quarter.

     In manufacturing, revised productivity increases in the third quarter
were:
               5.2 percent in manufacturing,
               8.3 percent in durable goods manufacturing, and
               1.6 percent in nondurable goods manufacturing.

   The third-quarter productivity increase in manufacturing occurred as
output rose slightly--0.7 percent--and hours of all persons working in the
sector dropped 4.3 percent.  Output and hours in manufacturing, which
includes about 18 percent of U.S. business sector employment, tend to vary
more from quarter to quarter than data for the more aggregate business and
nonfarm business sectors.  Third-quarter measures are summarized in table A
and appear in detail in tables 1 through 5.
   
   The data sources and methods used in the preparation of the manufacturing
series differ from those used in preparing the business and nonfarm business
series, and these measures are not directly comparable.  Output measures for
business and nonfarm business are based on measures of gross domestic product
prepared by the Bureau of Economic Analysis of the U.S. Department of
Commerce.  Quarterly output measures for manufacturing reflect indexes of
industrial production independently prepared by the Board of Governors of the
Federal Reserve System.  See Technical Notes for further information on data
sources.

-----------------------------------------------------------------------------
Table A. Productivity and costs: Revised third-quarter 1998 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               3.1        4.3      1.1     3.8       2.0       0.7
Nonfarm business       3.0        4.2      1.2     4.1       2.2       1.1
Manufacturing          5.2        0.7     -4.3     3.3       1.4      -1.8
  Durable              8.3        4.5     -3.5     1.6      -0.3      -6.2
  Nondurable           1.6       -3.8     -5.3     6.0       4.1       4.3
-----------------------------------------------------------------------------
                           Percent change from same quarter a year ago
Business               2.0        4.1      2.1     4.5       2.9       2.5
Nonfarm business       1.9        4.2      2.3     4.4       2.8       2.5
Manufacturing          3.8        3.2     -0.5     4.5       2.8       0.7
  Durable              6.1        5.8     -0.3     3.9       2.3      -2.1
  Nondurable           0.9        0.1     -0.7     5.3       3.7       4.4
-----------------------------------------------------------------------------


Business

     From the second quarter to the third quarter of 1998, business sector
productivity rose 3.1 percent as output increased 4.3 percent and hours of
all persons engaged in the sector increased 1.1 percent (seasonally adjusted
annual rates).  Employment in the business sector rose in the third quarter
by 2.2 percent, but this increase was partially offset by a 1.1-percent
decline in average weekly hours at work (table 1).

     Hourly compensation increased 3.8 percent during the third quarter of
1998.  This measure includes wages and salaries, supplements, employer
contributions to employee benefit plans, and taxes.  Real hourly
compensation, which takes into account changes in the Consumer Price Index
for All Urban Consumers (CPI-U), rose 2.0 percent in the third quarter of
1998.

   Unit labor costs rose modestly in the third quarter, 0.7 percent.  Unit
labor costs had increased 4.0 percent in the second quarter of 1998.
The implicit price deflator for the business sector, which reflects changes
both in unit labor costs and in unit nonlabor payments, increased at a 0.3
percent annual rate in the third quarter of 1998, the same rate as in the
previous quarter.

Nonfarm business

     Productivity increased 3.0 percent in the nonfarm business sector during
the third quarter of 1998 as output rose 4.2 percent and hours of all persons
increased 1.2 percent (table 2).  As in the larger business sector, an
employment increase, 2.2 percent, was mitigated by a decline in average
weekly hours at work of 1.0 percent.

     Hourly compensation increased at a 4.1 percent annual rate in the third
quarter, similar to a 4.0 percent increase one quarter earlier.  When the
rise in the CPI-U is taken into account, real hourly compensation rose at a
2.2 percent annual rate in the third quarter.

   Unit labor costs rose 1.1 percent in the third quarter of 1998 after
increasing 3.7 percent in the second quarter.  The implicit price deflator
rose 0.6 percent in the third quarter of 1998.  This increase reflects both
the increase in unit labor costs and a 0.4 percent decline in unit nonlabor
payments; labor costs account for approximately 64 percent of nonfarm
business payments.

Manufacturing

     Productivity increased 5.2 percent in manufacturing in the third quarter
of 1998, as output edged up 0.7 percent and hours of all persons fell 4.3
percent (seasonally adjusted annual rates).  The output increase was the
smallest in manufacturing since a 0.1-percent increase was posted in the
second quarter of 1995.  Similarly, the decrease in hours was the largest to
occur in manufacturing since a 4.3-percent drop in the second quarter of
1995.  Trends in productivity growth in the durable and nondurable
manufacturing subsectors were very different.  In durable goods industries,
productivity grew 8.3 percent in the third quarter as output rose 4.5 percent
and hours fell 3.5 percent.  In the nondurable goods industries, third-
quarter productivity grew 1.6 percent as output dropped 3.8 percent and hours
fell further--5.3 percent (tables 3, 4, and 5).

     Hourly compensation of all manufacturing workers rose 3.3 percent during
the third quarter of 1998 (seasonally adjusted annual rates).  In durable
goods manufacturing, hourly compensation rose 1.6 percent during the third
quarter.  The increase in nondurable goods manufacturing was higher, 6.0
percent.  When the increase in the CPI-U is taken into account, real hourly
compensation for all manufacturing workers rose 1.4 percent in the third
quarter.

     Because the large increase in labor productivity more than offset the
rise in hourly compensation in the manufacturing sector, unit labor costs
fell at a 1.8-percent annual rate in the third quarter of 1998.  Unit labor
costs also fell in the previous quarter, 1.3 percent.  Unit labor costs fell
6.2 percent in durable goods manufacturing in the third quarter of 1998.  In
nondurable goods manufacturing, however, unit labor costs in the third
quarter rose 4.3 percent.
   
Nonfinancial Corporations

   Third-quarter 1998 measures of productivity and costs also were announced
for nonfinancial corporations (tables B and 6).  Output per all-employee hour
rose at a 4.6 percent annual rate, reflecting increases of  6.2 percent in
output and 1.5 percent in hours of all employees.  The sector includes all
corporations doing business in the United States, except those classified as
depository institutions, nondepository institutions, security and commodity
brokers, insurance carriers, regulated investment offices, small business
investment offices, and real estate investment trusts.
   

-----------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Third-quarter 1998 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
1998 III   4.6      6.2     1.5    4.2      2.3    -0.4    3.1     -0.1
-----------------------------------------------------------------------------
                   Percent change from same quarter a year ago
1998 III   2.8      5.2     2.3    4.3      2.7     1.5   -6.3     -0.2
-----------------------------------------------------------------------------


   Hourly compensation increased 4.2 percent in the third quarter; it had
risen 4.6 percent in the second quarter.  When the rise in the CPI-U is taken
into account, real hourly compensation increased 2.3 percent in the third
quarter.

   Both unit labor costs and unit nonlabor costs fell slightly during the
third quarter of 1998.  Unit labor costs for nonfinancial corporations
dropped 0.4 percent in the third quarter, the first decrease since the third
quarter of 1997 (when they fell 1.3 percent).  Unit nonlabor costs fell 1.1
percent in the third quarter.  Unit profits rose at a 3.1 percent annual
rate.  This was the first increase in unit profits since they rose 11.8
percent in the third quarter of 1997.  The implicit price deflator for the
output of nonfinancial corporations declined 0.1 percent in both the second
and third quarters of 1998.
   
Revised Measures

   Current and previous measures for the third quarter of 1998 for the busi-
ness, nonfarm business, and manufacturing sectors are compared in table C.
In the business and nonfarm business sectors, increases in productivity and
output are larger than those reported on Nov. 10, based on the information
available at that time.  Unit labor cost measures for these sectors are
correspondingly lower.


-----------------------------------------------------------------------------
Table C. Previous and revised productivity and related measures
Quarterly percent change at seasonally adjusted annual rate
-----------------------------------------------------------------------------                                                          
                                                            Real      
                                                  Hourly    hourly    Unit
                        Produc-                   compen-   compen-   labor
Sector                  tivity     Output   Hours sation    sation    costs
-----------------------------------------------------------------------------                                                                      
                             Third quarter 1998
Business:                                                             
  Previous               2.4        3.5      1.1   3.8       1.9       1.4
  Current                3.1        4.3      1.1   3.8       2.0       0.7
Nonfarm business:                                                     
  Previous               2.3        3.5      1.2   4.0       2.2       1.7
  Current                3.0        4.2      1.2   4.1       2.2       1.1
Manufacturing:                                                        
  Previous               3.7       -0.6     -4.1   2.9       1.1      -0.7
  Current                5.2        0.7     -4.3   3.3       1.4      -1.8
-----------------------------------------------------------------------------


   In manufacturing, rates of growth in productivity were revised sharply
upward in the third quarter due to revisions in the output measures.  Unit
labor costs were revised downward by similar amounts (tables 3-5 and appendix
tables 1-3).  The quarterly measures of productivity, output, and unit labor
costs for manufacturing were revised back to 1992 due to the incorporation of
revised indexes of industrial production.  Annual measures for 1997 also were
affected.  These indexes, published by the Board of Governors of the Federal
Reserve System, were changed to incorporate additional and revised source
data and updated information on seasonal trends.  (See Federal Reserve
Statistical Release G.17, "Industrial production and capacity utilization: a
revision," Nov. 24, 1998.)

Next release date

     The next release of Productivity and Costs is scheduled for 10:00 AM
EST, Tuesday, February 9, 1999.  Preliminary fourth-quarter and annual 1998
measures will be released at that time.

     Scheduled release dates for productivity and costs measures for major
sectors of the U.S. economy in 1999 are:

     ----------------------------------------------------
     Reference period                   1999 release date
     ----------------                   -----------------
     1998:                              
     Fourth quarter, Annual             February 9
     Fourth quarter, Annual (revised)   March 9
     1999:                              
     First quarter                      May 11
     First quarter (revised)            June 8
     Second quarter                     August 5
     Second quarter (revised)           September 2
     Third quarter                      November 12
     Third quarter (revised)            December 7
     ----------------------------------------------------     
          
     These dates are based on presently available schedules for the release
of underlying source data in 1999.  Each issue of Productivity and Costs
contains a "Next release date" paragraph which readers should use to confirm
the dates above.


                                      
                               TECHNICAL NOTES
                                      
Labor Hours: Hours data for the labor productivity and costs 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
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 76 percent of
the value of GDP in 1992. Nonfarm business, which also excludes farming,
accounted for about 75 percent of GDP in 1992.
     Annual manufacturing indexes 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; non-
electrical 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-
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 52 percent of the value of GDP in 1992.

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: 202-606-STAT; TDD phone: 202-606-5897;
TDD message referral phone number: 1-800-326-2577.

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

  1996       I     102.9      112.5     109.3     108.8        98.4      105.7       111.9      107.9
            II     103.8      114.2     110.0     110.3        98.9      106.3       112.1      108.4
           III     103.8      114.9     110.7     111.4        99.3      107.3       111.5      108.8
            IV     104.2      116.4     111.6     112.3        99.3      107.8       111.8      109.2

        ANNUAL     103.7      114.5     110.4     110.7        99.0      106.8       111.8      108.6

  1997       I     104.5      117.8     112.7     113.4        99.7      108.5       112.4      109.9
            II     105.0      119.1     113.4     114.1       100.0      108.7       113.1      110.3
           III     106.0      120.6     113.8     115.3       100.5      108.8       113.8      110.6
            IV     106.2      121.7     114.5     116.8       101.3      110.0       112.4      110.8

        ANNUAL     105.4      119.8     113.6     114.9       100.5      109.0       112.9      110.4

  1998       I     107.3      123.7     115.4     118.2       102.4      110.2       112.2      110.9
            II     107.3      124.3     115.8     119.4       102.9      111.3       110.5      111.0
           III    r108.1     r125.6     116.2     120.5       103.4     r111.5      r110.4      111.1
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1996       I       4.4        4.5       0.1       2.5        -0.7       -1.9         8.5        1.9
            II       3.5        6.4       2.9       5.6         1.8        2.1         0.9        1.7
           III       0.1        2.5       2.4       4.0         1.5        3.8        -2.2        1.6
            IV       1.5        5.1       3.5       3.4         0.0        1.8         1.0        1.5

        ANNUAL       2.7        4.2       1.5       3.6         0.7        0.9         2.8        1.6

  1997       I       1.0        4.9       3.9       3.9         1.7        2.8         2.0        2.5
            II       2.0        4.7       2.6       2.6         1.3        0.6         2.8        1.4
           III       3.7        4.9       1.2       4.1         2.1        0.4         2.2        1.1
            IV       0.9        3.6       2.7       5.3         3.1        4.4        -4.8        0.9

        ANNUAL       1.7        4.6       2.9       3.8         1.5        2.1         1.0        1.7

  1998       I       4.1        7.1       2.9       4.9         4.4        0.8        -0.7        0.2
            II       0.1        1.7       1.7       4.1         2.0        4.0        -6.0        0.3
           III      r3.1       r4.3       1.1       3.8        r2.0       r0.7       r-0.4        0.3
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1996       I       2.5        3.2       0.7       3.0         0.2        0.6         3.3        1.6
            II       3.1        4.7       1.6       3.7         0.8        0.6         3.4        1.6
           III       2.8        4.2       1.4       4.0         1.0        1.1         2.4        1.6
            IV       2.4        4.6       2.2       3.9         0.7        1.5         2.0        1.7

        ANNUAL       2.7        4.2       1.5       3.6         0.7        0.9         2.8        1.6

  1997       I       1.5        4.7       3.2       4.2         1.2        2.6         0.4        1.8
            II       1.2        4.3       3.1       3.5         1.1        2.3         0.9        1.8
           III       2.1        4.9       2.8       3.5         1.3        1.4         2.0        1.6
            IV       1.9        4.5       2.6       4.0         2.0        2.0         0.5        1.5

        ANNUAL       1.7        4.6       2.9       3.8         1.5        2.1         1.0        1.7

  1998       I       2.6        5.1       2.3       4.2         2.7        1.5        -0.2        0.9
            II       2.1        4.3       2.1       4.6         2.9        2.4        -2.4        0.6
           III      r2.0       r4.1       2.1       4.5         2.9       r2.5       r-3.0        0.4
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       December 3, 1998 
  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

  1996       I     103.0      112.8     109.4     108.6        98.3      105.4       112.3      107.9
            II     103.8      114.5     110.3     110.0        98.6      106.0       112.3      108.2
           III     103.8      115.2     111.0     111.0        98.9      107.0       111.6      108.6
            IV     104.1      116.6     112.0     112.0        98.9      107.5       112.2      109.2

        ANNUAL     103.7      114.8     110.7     110.4        98.7      106.5       112.1      108.5

  1997       I     104.2      117.9     113.1     113.1        99.4      108.5       112.8      110.0
            II     104.7      119.2     113.9     113.8        99.7      108.7       113.6      110.4
           III     105.6      120.6     114.2     114.9       100.2      108.8       114.5      110.8
            IV     105.9      121.8     115.1     116.3       100.9      109.9       113.3      111.1

        ANNUAL     105.1      119.9     114.1     114.5       100.1      109.0       113.6      110.6

  1998       I     106.8      123.9     116.0     117.6       101.9      110.2       113.2      111.2
            II     106.8      124.4     116.4     118.8       102.4      111.2       111.5      111.3
           III    r107.6     r125.7     116.8     120.0      r103.0     r111.5      r111.4     r111.4
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1996       I       4.1        4.2       0.0       2.6        -0.5       -1.5         7.4        1.7
            II       3.0        6.4       3.3       5.2         1.4        2.2        -0.1        1.3
           III       0.0        2.5       2.4       3.7         1.3        3.7        -2.3        1.4
            IV       1.2        5.0       3.7       3.3         0.0        2.1         2.3        2.2

        ANNUAL       2.4        4.1       1.6       3.5         0.6        1.1         2.0        1.4

  1997       I       0.5        4.5       4.1       4.0         1.8        3.6         2.2        3.1
            II       1.8        4.5       2.6       2.6         1.2        0.7         2.8        1.5
           III       3.6        4.8       1.2       3.9         2.0        0.3         3.1        1.4
            IV       0.9        4.0       3.0       4.9         2.8        4.0        -4.3        0.9

        ANNUAL       1.4        4.5       3.0       3.7         1.4        2.3         1.3        1.9

  1998       I       3.5        7.0       3.4       4.6         4.1        1.1        -0.3        0.6
            II       0.3        1.7       1.5       4.0         2.0        3.7        -5.7        0.2
           III      r3.0       r4.2       1.2      r4.1         2.2       r1.1       r-0.4        0.6
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1996       I       2.4        3.2       0.8       3.0         0.2        0.6         2.7        1.4
            II       2.9        4.7       1.8       3.6         0.7        0.7         2.4        1.3
           III       2.4        4.1       1.6       3.8         0.8        1.3         1.4        1.3
            IV       2.1        4.5       2.4       3.7         0.5        1.6         1.7        1.7

        ANNUAL       2.4        4.1       1.6       3.5         0.6        1.1         2.0        1.4

  1997       I       1.2        4.6       3.4       4.1         1.1        2.9         0.5        2.0
            II       0.9        4.1       3.2       3.4         1.1        2.5         1.2        2.0
           III       1.8        4.7       2.9       3.5         1.2        1.7         2.6        2.0
            IV       1.7        4.4       2.7       3.9         1.9        2.1         0.9        1.7

        ANNUAL       1.4        4.5       3.0       3.7         1.4        2.3         1.3        1.9

  1998       I       2.4        5.1       2.6       4.0         2.5        1.5         0.3        1.1
            II       2.0        4.4       2.3       4.4         2.7        2.3        -1.9        0.8
           III      r1.9       r4.2       2.3       4.4         2.8       r2.5       r-2.7        0.6
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       December 3, 1998
  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

  1996       I           r112.5       r115.4        102.6        109.2           98.8         r97.1
            II           r113.9        118.3        103.8        110.3           98.9          96.8
           III           r115.5       r120.2        104.1        111.2           99.1         r96.3
            IV           r116.4       r121.3        104.3        111.9           98.9         r96.1

        ANNUAL            114.6        118.8        103.7        110.7           99.0          96.6

  1997       I           r117.5       r123.4        105.1        113.0           99.3         r96.2
            II           r118.8       r125.4        105.5        114.0           99.9         r95.9
           III           r121.4       r127.8        105.2        115.5          100.7         r95.2
            IV           r122.7       r130.1        106.1        117.8          102.2         r96.0

        ANNUAL           r120.1       r126.7        105.5        115.1          100.6         r95.8

  1998       I           r123.2       r130.9        106.3        119.0          103.1         r96.6
            II           r124.4       r131.7        105.9        119.7          103.2         r96.3
           III           r126.0       r131.9       r104.7       r120.7         r103.6         r95.8
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1996       I             r5.0         r1.5         -3.3         -0.1           -3.2         r-4.9
            II             r5.0        r10.2          4.9          4.1            0.4         r-0.9
           III             r5.6         r6.7          1.1          3.1            0.7         r-2.3
            IV             r3.1         r3.8          0.7          2.5           -0.9         r-0.6

        ANNUAL              4.5          4.2         -0.4          2.2           -0.8          -2.3

  1997       I             r3.8         r7.2          3.3          4.2            2.0          r0.4
            II             r4.8         r6.6          1.7          3.5            2.1         r-1.3
           III             r8.9         r7.7         -1.1          5.6            3.6         r-3.1
            IV             r4.3         r7.5          3.1          8.0            5.8          r3.6

        ANNUAL             r4.8         r6.6          1.7          4.0            1.7         r-0.8

  1998       I             r1.6         r2.4          0.8          4.1            3.6          r2.4
            II             r4.0         r2.5         -1.4          2.6            0.6         r-1.3
           III             r5.2         r0.7        r-4.3         r3.3           r1.4         r-1.8
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1996       I             r4.2         r1.7         -2.4          1.9           -0.9         r-2.2
            II             r4.3         r4.1         -0.1          2.1           -0.7         r-2.1
           III             r4.9         r5.3          0.4          2.2           -0.7         r-2.6
            IV             r4.7         r5.5          0.8          2.4           -0.8         r-2.2

        ANNUAL              4.5          4.2         -0.4          2.2           -0.8          -2.3

  1997       I             r4.4         r6.9          2.5          3.5            0.5         r-0.9
            II             r4.3         r6.1          1.7          3.3            1.0         r-1.0
           III             r5.1         r6.3          1.1          3.9            1.7         r-1.2
            IV             r5.4         r7.3          1.7          5.3            3.4         r-0.1

        ANNUAL             r4.8         r6.6          1.7          4.0            1.7         r-0.8

  1998       I             r4.9         r6.0          1.1          5.3            3.8          r0.4
            II             r4.7         r5.0          0.3          5.0            3.4          r0.4
           III             r3.8         r3.2         -0.5         r4.5           r2.8          r0.7
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 3, 1998
  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

  1996       I           r119.7       r126.3        105.5        107.5           97.2         r89.8
            II            122.0       r131.0        107.4        108.5           97.2         r89.0
           III           r123.8       r133.5        107.8        109.2           97.3         r88.2
            IV           r124.8       r134.9        108.0        109.6           96.8         r87.8

        ANNUAL            122.6        131.4        107.2        108.7           97.2          88.6

  1997       I           r126.2       r138.2        109.5        110.6           97.2         r87.6
            II           r128.6       r141.7        110.2        111.5           97.7         r86.7
           III           r132.6       r146.0        110.1        113.0           98.5         r85.2
            IV           r135.1       r149.8        110.9        115.8          100.4         r85.7

        ANNUAL           r130.6       r143.9        110.2        112.8           98.6         r86.3

  1998       I           r135.8       r151.0        111.3        116.6          101.0         r85.8
            II           r138.0       r152.8        110.7        117.0          100.9         r84.8
           III           r140.7       r154.5        109.8       r117.5         r100.8         r83.5
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1996       I             r7.4         r4.5         -2.7         -2.8           -5.8         r-9.5
            II             r7.7        r15.9          7.5          3.8            0.1         r-3.6
           III             r6.3         r7.9          1.5          2.6            0.2         r-3.5
            IV             r3.3         r4.0          0.7          1.4           -1.9         r-1.9

        ANNUAL              6.2          7.1          0.9          0.8           -2.1          -5.0

  1997       I             r4.4        r10.4          5.7          3.9            1.6         r-0.6
            II             r7.8        r10.4          2.4          3.4            2.0         r-4.1
           III            r13.0        r12.8         -0.2          5.5            3.5         r-6.6
            IV             r7.8        r10.7          2.7         10.2            7.9          r2.2

        ANNUAL             r6.6         r9.5          2.8          3.7            1.4         r-2.6

  1998       I             r2.0         r3.5          1.4          2.6            2.1          r0.6
            II             r6.6         r4.6         -1.8          1.6           -0.4         r-4.7
           III             r8.3         r4.5        r-3.5         r1.6          r-0.3         r-6.2
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1996       I             r5.3         r4.0         -1.2          0.4           -2.4         r-4.7
            II             r6.3         r7.9          1.4          0.7           -2.1         r-5.3
           III             r6.9         r8.6          1.7          0.9           -2.0         r-5.6
            IV             r6.2         r8.0          1.7          1.2           -1.9         r-4.7

        ANNUAL              6.2          7.1          0.9          0.8           -2.1          -5.0

  1997       I             r5.4         r9.5          3.8          2.9            0.0         r-2.4
            II             r5.5         r8.1          2.6          2.8            0.5         r-2.5
           III             r7.1         r9.3          2.1          3.5            1.3         r-3.3
            IV             r8.2        r11.1          2.6          5.7            3.7         r-2.3

        ANNUAL             r6.6         r9.5          2.8          3.7            1.4         r-2.6

  1998       I             r7.6         r9.3          1.6          5.4            3.9         r-2.0
            II             r7.3         r7.8          0.5          4.9            3.2         r-2.2
           III             r6.1         r5.8         -0.3         r3.9           r2.3         r-2.1
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 3, 1998
  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

  1996       I           r105.7       r104.3         98.7        111.4          100.8        r105.4
            II           r106.3       r105.2         99.0        112.6          100.9        r105.9
           III           r107.5       r106.6         99.1        113.7          101.3        r105.7
            IV           r108.2       r107.4         99.3        114.8          101.5        r106.1

        ANNUAL            107.0        105.9         99.0        113.1          101.2         105.8

  1997       I           r109.2       r108.3         99.2        116.1          102.0        r106.3
            II           r109.6       r108.9         99.4        117.1          102.6        r106.9
           III           r110.7       r109.3         98.8        118.7          103.5        r107.2
            IV            110.7        110.3         99.7        120.0          104.1         108.4

        ANNUAL           r110.0       r109.2         99.2        118.0          103.1        r107.2

  1998       I           r111.0       r110.6         99.6        121.9          105.6        r109.8
            II           r111.2        110.5         99.4        123.2          106.2        r110.8
           III            111.6        109.5        r98.0       r125.0         r107.3        r112.0
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1996       I             r2.2        r-2.1         -4.2          4.2            1.0          r1.9
            II             r2.2         r3.4          1.2          4.1            0.4          r1.9
           III             r4.7         r5.2          0.5          4.0            1.5         r-0.7
            IV             r2.7         r3.4          0.6          4.2            0.8          r1.4

        ANNUAL              2.7          0.6         -2.1          4.1            1.1           1.4

  1997       I             r3.6         r3.4         -0.2          4.3            2.1          r0.7
            II             r1.3         r1.9          0.6          3.5            2.2          r2.2
           III             r4.2         r1.7         -2.4          5.6            3.6          r1.3
            IV            r-0.1         r3.6          3.7          4.6            2.5          r4.7

        ANNUAL             r2.9         r3.1          0.2          4.3            1.9          r1.4

  1998       I             r1.3         r1.1         -0.2          6.4            5.8          r5.0
            II             r0.7        r-0.2         -0.9          4.5            2.4          r3.8
           III             r1.6        r-3.8        r-5.3         r6.0           r4.1          r4.3
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1996       I             r3.0        r-1.3         -4.1          4.1            1.3          r1.1
            II             r2.1        r-0.3         -2.3          4.1            1.2          r2.0
           III             r2.8         r1.3         -1.5          4.1            1.2          r1.3
            IV             r2.9         r2.4         -0.5          4.1            0.9          r1.1

        ANNUAL              2.7          0.6         -2.1          4.1            1.1           1.4

  1997       I             r3.3         r3.8          0.5          4.2            1.2          r0.8
            II             r3.1         r3.5          0.4          4.0            1.7          r0.9
           III             r2.9         r2.6         -0.4          4.4            2.2          r1.4
            IV              2.2          2.6          0.4          4.5            2.6           2.2

        ANNUAL             r2.9         r3.1          0.2          4.3            1.9          r1.4

  1998       I             r1.7         r2.1          0.4          5.0            3.5          r3.3
            II             r1.5         r1.5          0.0          5.2            3.6          r3.7
           III             r0.9         r0.1         -0.7         r5.3           r3.7          r4.4
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 3, 1998
  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

  1996       I    106.4    117.3     110.3    107.7      97.4     101.2     98.7    100.6    153.7    105.4
            II    107.2    119.3     111.2    109.0      97.7     101.7     97.9    100.7    154.1    105.5
           III    108.0    120.9     111.9    110.1      98.1     101.9     97.5    100.8    155.3    105.7
            IV    108.6    122.5     112.8    110.9      98.0     102.1     97.4    100.9    155.4    105.8

        ANNUAL    107.6    120.0     111.5    109.5      97.9     101.7     97.9    100.7    154.6    105.6

  1997       I    109.0    124.3     114.0    111.8      98.3     102.6     97.3    101.2    156.6    106.2
            II    109.7    126.2     115.1    112.6      98.6     102.6     97.1    101.2    157.3    106.3
           III    111.2    128.7     115.7    113.7      99.2     102.3     96.4    100.7    161.7    106.3
            IV    111.4    130.2     116.8    115.1      99.9     103.3     95.7    101.3    155.7    106.3

        ANNUAL    110.4    127.3     115.3    113.4      99.1     102.7     96.6    101.1    157.8    106.3

  1998       I    112.2    132.1     117.7    116.2     100.6     103.5     95.4    101.4    153.5    106.2
            II    113.0    133.4     118.0    117.5     101.2     103.9     95.5    101.7    150.4    106.1
           III    114.3    135.4     118.4    118.7     101.8     103.8     95.2    101.6    151.6    106.1
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  1996       I      1.2      1.4       0.2      1.7      -1.5       0.4     -0.7      0.1     13.1      1.7
            II      3.3      6.9       3.5      5.0       1.2       1.7     -2.9      0.5      1.1      0.6
           III      2.9      5.6       2.6      3.9       1.4       0.9     -1.7      0.3      3.0      0.6
            IV      2.1      5.5       3.3      2.9      -0.4       0.7     -0.5      0.4      0.3      0.4

        ANNUAL      2.8      4.5       1.7      3.1       0.2       0.3     -1.1     -0.1      7.7      0.9

  1997       I      1.5      5.9       4.3      3.6       1.3       2.0     -0.6      1.4      3.2      1.6
            II      2.5      6.3       3.8      2.6       1.3       0.2     -0.6      0.0      1.7      0.2
           III      5.6      8.2       2.4      4.2       2.2      -1.3     -3.1     -1.8     11.8      0.0
            IV      1.0      4.8       3.8      5.0       2.9       4.0     -2.7      2.3    -14.1     -0.1

        ANNUAL      2.6      6.1       3.5      3.6       1.2       1.0     -1.3      0.4      2.1      0.6

  1998       I      2.6      5.9       3.2      3.6       3.1       0.9     -1.1      0.4     -5.6     -0.4
            II      3.1      4.0       0.9      4.6       2.5       1.5      0.1      1.1     -7.7     -0.1
           III      4.6      6.2       1.5      4.2       2.3      -0.4     -1.1     -0.6      3.1     -0.1
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  1996       I      2.9      3.9       1.0      2.5      -0.3      -0.4     -0.6     -0.5     11.5      0.9
            II      3.2      4.9       1.7      3.1       0.2      -0.1     -1.6     -0.5     11.1      0.9
           III      2.6      4.4       1.8      3.4       0.5       0.8     -0.9      0.3      4.5      0.9
            IV      2.4      4.8       2.4      3.4       0.2       0.9     -1.4      0.3      4.3      0.8

        ANNUAL      2.8      4.5       1.7      3.1       0.2       0.3     -1.1     -0.1      7.7      0.9

  1997       I      2.5      5.9       3.4      3.8       0.9       1.3     -1.4      0.6      1.9      0.8
            II      2.3      5.8       3.5      3.2       0.9       1.0     -0.8      0.5      2.0      0.7
           III      2.9      6.4       3.4      3.3       1.1       0.4     -1.2      0.0      4.2      0.5
            IV      2.6      6.3       3.5      3.9       1.9       1.2     -1.8      0.5      0.2      0.4

        ANNUAL      2.6      6.1       3.5      3.6       1.2       1.0     -1.3      0.4      2.1      0.6

  1998       I      2.9      6.3       3.3      3.9       2.4       0.9     -1.9      0.2     -2.0     -0.1
            II      3.1      5.7       2.6      4.3       2.7       1.2     -1.7      0.5     -4.3     -0.1
           III      2.8      5.2       2.3      4.3       2.7       1.5     -1.2      0.8     -6.3     -0.2
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        December 3, 1998
  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
-1.3 and +1.5 index points approximately 95 percent of the time.  This
interval is based on the performance of this measure between the fourth
quarter of 1995 and the second quarter of 1998.



                            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)  Compensation per hour adjusted for changes in the Consumer Price Index
     for All Urban Consumers.

(3)  Unit nonlabor payments include profits, capital consumption allowances,
     interest, rental income of persons, and indirect taxes.

(4)  Current dollar output divided by the output index.

(5)  Quarterly changes:  Percent change compounded at annual rate from the
     original data rather than index numbers.  Annual changes:  Percent
     change between annual average levels.

(6)  Unit nonlabor costs include capital consumption allowances, interest,
     rental income of persons, and indirect taxes.  For nonfinancial
     corporations, rental income of persons is zero by definition.

(7)  Total unit costs are the sum of unit labor and nonlabor costs.

(8)  Unit profits include corporate profits with inventory valuation and
     capital consumption adjustments.
Appendix table 1.  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

  1993       I          101.9         102.7        100.8        101.5           99.5          99.6
            II          101.9         103.1        101.2        102.5           99.7         100.6
           III          101.6         103.1        101.5        103.4          100.1         101.7
            IV          102.7         104.8        102.0        104.3          100.2         101.6

        ANNUAL          102.0         103.4        101.4        102.9           99.9         100.9

  1994       I          104.0         106.3        102.2        105.3          100.7         101.2
            II          105.2         108.4        103.1        105.3          100.0         100.1
           III          105.6         109.8        104.0        105.9           99.7         100.3
            IV          106.6         112.0        105.1        106.7           99.8         100.1

        ANNUAL          105.3         109.1        103.6        105.8          100.1         100.4

  1995       I          108.0         113.5        105.1        107.2           99.7          99.3
            II          109.2         113.6        103.9        108.0           99.6          98.9
           III          110.0         114.1        103.7        108.8           99.8          98.8
            IV          111.2         115.0        103.4        109.3           99.6          98.3

        ANNUAL          109.6         114.1        104.0        108.3           99.7          98.8

  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1993       I            2.7           4.3          1.5          1.8           -1.0          -0.8
            II           -0.1           1.5          1.6          3.9            0.9           4.1
           III           -1.2           0.1          1.3          3.4            1.5           4.6
            IV            4.4           6.6          2.1          3.7            0.4          -0.6

        ANNUAL            2.0           3.4          1.4          2.9           -0.1           0.9

  1994       I            5.2           6.0          0.8          3.8            1.8          -1.3
            II            4.8           8.3          3.3          0.1           -2.4          -4.5
           III            1.3           5.1          3.7          2.2           -1.5           0.9
            IV            4.0           8.3          4.1          3.0            0.5          -1.0

        ANNUAL            3.3           5.5          2.2          2.8            0.2          -0.5

  1995       I            5.5           5.6          0.1          2.1           -0.5          -3.2
            II            4.6           0.1         -4.3          3.1           -0.3          -1.5
           III            2.9           2.0         -0.9          2.8            0.6          -0.2
            IV            4.2           3.1         -1.0          1.8           -0.6          -2.2

        ANNUAL            4.1           4.5          0.4          2.4           -0.4          -1.6

  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1993       I            3.6           4.9          1.3          2.9           -0.2          -0.6
            II            2.3           3.3          1.0          2.8           -0.3           0.5
           III            0.8           2.4          1.6          2.7           -0.1           1.9
            IV            1.4           3.1          1.6          3.2            0.5           1.8

        ANNUAL            2.0           3.4          1.4          2.9           -0.1           0.9

  1994       I            2.0           3.5          1.4          3.7            1.2           1.6
            II            3.3           5.2          1.9          2.7            0.3          -0.5
           III            3.9           6.5          2.5          2.4           -0.4          -1.4
            IV            3.8           6.9          3.0          2.3           -0.4          -1.5

        ANNUAL            3.3           5.5          2.2          2.8            0.2          -0.5

  1995       I            3.9           6.8          2.8          1.8           -1.0          -2.0
            II            3.8           4.7          0.8          2.6           -0.4          -1.2
           III            4.3           3.9         -0.3          2.7            0.1          -1.5
            IV            4.3           2.7         -1.5          2.4           -0.2          -1.8

        ANNUAL            4.1           4.5          0.4          2.4           -0.4          -1.6

  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 3, 1998
                                                                  Source: Bureau of Labor Statistics

Appendix table 2. 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

  1993       I          103.7         104.5        100.7        101.6           99.6          98.0
            II          104.5         105.5        101.0        102.8          100.0          98.3
           III          103.9         105.7        101.7        103.6          100.3          99.7
            IV          106.2         108.9        102.5        104.6          100.5          98.5

        ANNUAL          104.6         106.1        101.5        103.2          100.2          98.6

  1994       I          107.9         111.1        103.0        105.4          100.8          97.7
            II          109.3         113.7        104.0        105.3          100.0          96.3
           III          110.2         116.0        105.3        105.7           99.5          95.9
            IV          111.5         118.9        106.7        106.5           99.7          95.5

        ANNUAL          109.7         114.9        104.7        105.7          100.1          96.3

  1995       I          113.7         121.4        106.7        107.1           99.6          94.2
            II          114.7         121.5        105.9        107.7           99.3          93.9
           III          115.9         122.9        106.1        108.2           99.2          93.4
            IV          117.6         124.9        106.2        108.2           98.7          92.1

        ANNUAL          115.5         122.7        106.2        107.8           99.3          93.4

  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1993       I            6.4           8.1          1.7          2.6           -0.3          -3.6
            II            3.3           4.2          1.0          4.5            1.5           1.2
           III           -2.4           0.5          3.0          3.2            1.3           5.7
            IV            9.4          12.6          3.0          4.3            1.0          -4.7

        ANNUAL            4.6           6.1          1.5          3.2            0.2          -1.4

  1994       I            6.5           8.5          1.9          3.0            1.0          -3.3
            II            5.2           9.4          4.0         -0.5           -3.0          -5.4
           III            3.4           8.7          5.1          1.7           -2.0          -1.7
            IV            4.5          10.1          5.4          2.9            0.5          -1.5

        ANNUAL            4.9           8.3          3.2          2.5           -0.1          -2.3

  1995       I            8.4           8.8          0.3          2.3           -0.3          -5.7
            II            3.5           0.3         -3.1          2.3           -1.1          -1.2
           III            4.2           4.8          0.6          1.9           -0.2          -2.2
            IV            6.0           6.6          0.6          0.1           -2.3          -5.5

        ANNUAL            5.2           6.7          1.4          2.0           -0.8          -3.1

  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1993       I            6.3           7.4          1.0          3.0           -0.1          -3.1
            II            4.9           5.9          0.9          3.0           -0.1          -1.8
           III            3.2           5.1          1.8          2.9            0.1          -0.3
            IV            4.0           6.3          2.2          3.6            0.9          -0.4

        ANNUAL            4.6           6.1          1.5          3.2            0.2          -1.4

  1994       I            4.1           6.4          2.2          3.7            1.2          -0.3
            II            4.6           7.7          3.0          2.5            0.1          -2.0
           III            6.1           9.8          3.5          2.1           -0.8          -3.8
            IV            4.9           9.2          4.1          1.8           -0.9          -3.0

        ANNUAL            4.9           8.3          3.2          2.5           -0.1          -2.3

  1995       I            5.4           9.2          3.7          1.6           -1.2          -3.6
            II            4.9           6.9          1.9          2.3           -0.7          -2.5
           III            5.1           5.9          0.8          2.3           -0.3          -2.7
            IV            5.5           5.1         -0.4          1.6           -1.0          -3.7

        ANNUAL            5.2           6.7          1.4          2.0           -0.8          -3.1

  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 3, 1998
                                                                  Source: Bureau of Labor Statistics

Appendix table 3. 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

  1993       I          100.3         101.1        100.8        101.3           99.3         101.1
            II           99.4         100.8        101.5        102.1           99.4         102.8
           III           99.6         100.8        101.2        103.0           99.7         103.4
            IV           99.4         100.9        101.5        103.7           99.6         104.3

        ANNUAL           99.6         100.9        101.2        102.5           99.6         102.9

  1994       I          100.4         101.7        101.3        104.9          100.3         104.4
            II          101.5         103.5        101.9        105.1           99.9         103.5
           III          101.3         103.7        102.4        105.8           99.6         104.4
            IV          102.2         105.2        103.0        106.6           99.7         104.3

        ANNUAL          101.4         103.5        102.1        105.6          100.0         104.2

  1995       I          102.7         105.7        102.9        107.1           99.5         104.3
            II          104.1         105.5        101.3        108.1           99.7         103.8
           III          104.5         105.1        100.6        109.1          100.1         104.4
            IV          105.1         104.9         99.7        110.3          100.5         104.9

        ANNUAL          104.1         105.3        101.1        108.6          100.0         104.3

  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1993       I           -0.9           0.5          1.3          0.7           -2.1           1.6
            II           -3.6          -1.2          2.5          3.2            0.2           7.0
           III            0.8          -0.1         -0.9          3.3            1.4           2.4
            IV           -0.6           0.3          0.9          2.7           -0.6           3.3

        ANNUAL           -0.4           0.9          1.2          2.5           -0.4           2.9

  1994       I            4.1           3.4         -0.7          4.8            2.8           0.7
            II            4.6           7.1          2.4          0.8           -1.7          -3.6
           III           -0.9           1.1          2.0          2.8           -0.9           3.7
            IV            3.6           5.9          2.3          2.8            0.4          -0.7

        ANNUAL            1.7           2.6          0.9          3.0            0.4           1.2

  1995       I            1.7           1.6         -0.1          1.8           -0.8           0.1
            II            5.8          -0.6         -6.0          4.0            0.6          -1.7
           III            1.7          -1.4         -3.0          3.9            1.7           2.2
            IV            2.3          -1.0         -3.3          4.3            1.8           1.9

        ANNUAL            2.7           1.7         -1.0          2.9            0.0           0.2

  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1993       I            1.2           2.8          1.6          2.8           -0.3           1.6
            II           -0.2           1.1          1.3          2.5           -0.6           2.7
           III           -1.3          -0.1          1.2          2.4           -0.4           3.7
            IV           -1.1          -0.1          0.9          2.5           -0.3           3.6

        ANNUAL           -0.4           0.9          1.2          2.5           -0.4           2.9

  1994       I            0.2           0.6          0.4          3.5            1.0           3.3
            II            2.2           2.6          0.4          2.9            0.5           0.7
           III            1.8           2.9          1.1          2.8           -0.1           1.0
            IV            2.8           4.4          1.5          2.8            0.1           0.0

        ANNUAL            1.7           2.6          0.9          3.0            0.4           1.2

  1995       I            2.2           3.9          1.6          2.1           -0.8          -0.2
            II            2.5           2.0         -0.5          2.9           -0.2           0.3
           III            3.2           1.4         -1.8          3.1            0.5           0.0
            IV            2.9          -0.4         -3.1          3.5            0.8           0.6

        ANNUAL            2.7           1.7         -1.0          2.9            0.0           0.2

  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 3, 1998
                                                                  Source: Bureau of Labor Statistics