USDL 03-815
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 8:30 A.M. EST,
WEDNESDAY, DECEMBER 3, 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
                             Third Quarter 2003
                                      
     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 2003.  The seasonally adjusted annual rates
of productivity growth in the third quarter were:

               8.6 percent in the business sector, and
               9.4 percent in the nonfarm business sector.

In both sectors, upward revisions to productivity reflect much larger upward
revisions to output than to hours.

     In manufacturing, revised productivity increases in the third quarter
were:

               9.0 percent in manufacturing,
              14.8 percent in durable goods manufacturing, and
               3.1 percent in nondurable goods manufacturing.

   Productivity in the manufacturing sector also rose more rapidly than was
reported on Nov. 6.  Output and hours both were revised up but the revisions
to output were larger than those to hours in the sector.  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.  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.


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Revised  historical measures through 2002 will be available on  the  BLS  web
site  on  Jan. 7, 2004, reflecting the release of revised source  data.   For
more information see "Upcoming changes."
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Table A. Productivity and costs: Revised third-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            8.6        10.2      1.4     2.3       0.0       -5.8
Nonfarm business    9.4        10.3      0.8     3.0       0.7       -5.8
Manufacturing       9.0         3.5     -5.0     4.1       1.7       -4.5
  Durable          14.8         8.1     -5.9     3.5       1.1       -9.9
  Nondurable        3.1        -0.8     -3.8     5.3       2.9        2.1
-----------------------------------------------------------------------------

                      Percent change from same quarter a year ago

Business            5.0         4.4     -0.6     2.8       0.6       -2.1
Nonfarm business    5.0         4.4     -0.5     2.7       0.5       -2.2
Manufacturing       4.4        -0.4     -4.7     4.4       2.2        0.0
  Durable           6.9         1.4     -5.1     4.0       1.8       -2.7
  Nondurable        1.8        -2.3     -4.0     5.2       2.9        3.4
-----------------------------------------------------------------------------


Business

     From the second quarter to the third quarter of 2003, business sector
productivity rose at an annual rate of 8.6 percent, as output increased 10.2
percent and hours of all persons engaged in the sector rose 1.4 percent
(table 1).  This is only the second increase in hours since they began
falling in the second quarter of 2000.  The output increase was the largest
since an 11.2-percent rise in the first quarter of 1984.

     Hourly compensation rose 2.3 percent during the third quarter of 2003,
less than the 4.1-percent increase in the second quarter. Hourly compensation
includes wages and salaries, supplements, employer contributions to employee
benefit plans, and taxes.  Real hourly compensation, which takes into account
changes in consumer prices, was unchanged in the third quarter of 2003.

   Unit labor costs decreased 5.8 percent last quarter, a bigger drop than
the 3.1-percent decline in the previous quarter.  Unit labor costs last rose
in the first quarter of the year, when they increased 0.5 percent.  The
implicit price deflator for the business sector, which reflects changes both
in unit labor costs and in unit nonlabor payments, increased at a 1.7 percent
annual rate in the third quarter of 2003.

Nonfarm business

     Output per hour of all persons in the nonfarm business sector increased
9.4 percent during the third quarter of 2003 (table 2).  Output rose 10.3
percent while hours of all persons increased 0.8 percent.  The output
increase was the largest since the third quarter of 1983, when it rose 11.5
percent.   In the nonfarm business sector, hours last increased in the first
quarter of 2000, when they rose 1.6 percent.

     Hourly compensation grew 3.0 percent in the third quarter of 2003, down
somewhat from the 3.6-percent increase in the previous quarter.  When the
rise in consumer prices is taken into account, real hourly compensation rose
0.7 percent in the third quarter of 2003.

   Unit labor costs fell 5.8 percent in the third quarter, following a 3.2
percent decrease one quarter earlier.  The implicit price deflator for
nonfarm business rose 1.5 percent in the third quarter of 2003.

Manufacturing

     Productivity increased 9.0 percent in manufacturing in the third quarter
of 2003, as output increased 3.5 percent and hours of all persons dropped 5.0
percent (seasonally adjusted annual rates).  Hours of all persons in
manufacturing have fallen for thirteen consecutive quarters.  In durable
goods industries, productivity rose by 14.8 percent, reflecting an 8.1-
percent rise in output and a decline of 5.9 percent in hours.  Productivity
grew much more slowly in the nondurable goods industries, 3.1 percent, as
output fell 0.8 percent and hours fell more, 3.8 percent (tables 3, 4, and
5).

     The hourly compensation of all manufacturing workers rose 4.1 percent
during the third quarter of 2003.  In durable goods manufacturing, hourly
compensation increased 3.5 percent and in nondurable goods manufacturing it
grew 5.3 percent.  When the increase in consumer prices is taken into
account, real hourly compensation for all manufacturing workers rose 1.7
percent in the third quarter.

     Unit labor costs in manufacturing fell 4.5 percent in the third quarter
after rising 2.2 percent in the previous quarter.  Unit labor costs dropped
9.9 percent in durable goods manufacturing in the third quarter and they rose
2.1 percent in nondurable goods manufacturing.

Nonfinancial Corporations

     Third-quarter 2003 measures of productivity and costs also were released
for nonfinancial corporations (tables B and 6).  Output per all-employee hour
grew at a 9.2 percent annual rate, somewhat faster than the 8.4 percent
increase in the previous quarter.  Output increased 8.9 percent in the third
quarter, and hours of all employees fell 0.2 percent (seasonally adjusted
annual rates).  The third quarter increase in output was the largest since a
9.5-percent rise in the first quarter of 2000 while the decrease in employee
hours was the smallest since the third quarter of 2000, when they fell 0.1
percent.  Employee hours have fallen in fourteen consecutive quarters.  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.

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Table B.  Nonfinancial corporations: Third-quarter 2003 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

2003 III   9.2     8.9     -0.2    3.0      0.7    -5.6    60.9      0.6

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                 Percent change from same quarter a year ago

2003 III   6.2     4.9     -1.2    3.3      1.1    -2.7    36.4      0.4

-----------------------------------------------------------------------------     
     
     Hourly compensation in nonfinancial corporations increased 3.0 percent
in the third quarter, down from the second quarter increase of 3.7 percent.
When the rise in consumer prices is taken into account, real hourly
compensation increased 0.7 percent in the third quarter.

     Unit labor costs for the sector dropped 5.6 percent in third quarter
2003. Unit nonlabor costs also fell, 2.4 percent, while unit profits rose at
a 60.9 percent annual rate in the third quarter.  As a result of these
movements, the implicit price deflator for the output of nonfinancial
corporations--which reflects a weighted average of these three measures--
increased 0.6 percent.

Revised Measures

     Current and previous measures for the third quarter of 2003 for the
business, nonfarm business, and manufacturing sectors are compared in table
C.  In the business and nonfarm business sectors, increases in productivity
and output are larger than those reported on Nov. 6, based on the information
available at that time.  Unit labor cost measures for these sectors showed
correspondingly larger declines.  Similarly, in manufacturing rates of growth
in output and productivity were revised up in the third quarter and unit
labor costs show a larger decline than was reported last month.

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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 2003

Business:                                                         
  Previous         7.4        8.8      1.3     2.4      0.1        -4.6
  Current          8.6       10.2      1.4     2.3      0.0        -5.8

Nonfarm business:                                                 
  Previous         8.1        8.8      0.7     3.1      0.8        -4.6
  Current          9.4       10.3      0.8     3.0      0.7        -5.8

Manufacturing:                                                    
  Previous         8.6        2.9     -5.2     4.3      1.9        -4.0
  Current          9.0        3.5     -5.0     4.1      1.7        -4.5
-----------------------------------------------------------------------------


   In addition, quarterly measures of productivity, output, and unit labor
costs for manufacturing were revised back to first quarter 2001 due to the
incorporation of revised indexes of industrial production.  The annual
measures for 2001 and 2002 also were affected.  In both years, output shows
less of a decline than it had previously.  Productivity was revised up by a
corresponding amount in both years.  The same revisions affected unit labor
costs; they fall more in 2002 and increase less in 2001 than previously
published.  The output measures for more recent quarters, based on those
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 (419), "Industrial Production and Capacity Utilization: the 2003 Annual
Revision," Nov. 10, 2003.)

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Table D. Manufacturing industries: Previous and revised productivity
and related measures
Annual percent changes
-----------------------------------------------------------------------------                                                                
                                                      Real      
                                             Hourly   hourly    Unit
                   Produc-                   compen-  compen-   labor
Sector             tivity   Output   Hours   sation   sation    costs
-----------------------------------------------------------------------------
                                                                
                             Annual average 2002
                                                
Previous           6.1      -1.1     -6.8      4.7      3.1      -1.3
Current            6.5      -0.7     -6.8      4.7      3.1      -1.7

                             Annual average 2001
                                                                
Previous           1.6      -4.9     -6.4      2.4     -0.4       0.8
Current            1.8      -4.7     -6.4      2.4     -0.4       0.6
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   Although the Federal Reserve revised and reclassified its indexes of
industrial production (IIP) back to 1972 when they released their historical
revisions in December 2002, the Bureau of Labor Statistics has not yet
incorporated these changes into its historical quarterly measures for years
before 2001.  When revised historical productivity data are released on Jan.
7, 2004, the updated information from the IIP will be incorporated into the
quarterly measures.
                               NEXT RELEASE DATE

     The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Thursday, February 5, 2004.  Preliminary fourth-quarter and annual 2003
measures will be released at that time.

     Scheduled release dates for productivity and costs measures for major
sectors of the U.S. economy in 2004 are:

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     Reference period              2004 release date
     ----------------              ----------------- 
     
     2003:                         
     Fourth quarter, Annual        February 5
     Fourth quarter, Annual        March 4
     (revised)
     
     2004:                         
     First quarter                 May 6
     First quarter (revised)       June 3
     Second quarter                August 10
     Second quarter (revised)      September 2
     Third quarter                 November 4
     Third quarter (revised)       December 7
-----------------------------------------------------------------------------

     These dates are based on presently available schedules for the release
of underlying source data in 2004.  Each issue of Productivity and Costs
contains a "Next release date" paragraph that readers should use to confirm
the dates above.

Upcoming changes

     In order to provide users with information on long-term productivity and
cost trends reflecting the release of the revised national income and product
accounts by the Bureau of Economic Analysis, U.S. Department of Commerce, on
Dec. 10, 2003, revised historical measures of productivity and costs for all
sectors will be prepared by the BLS.  Revised data for the manufacturing and
nonfinancial corporate sectors also will reflect conversion from the 1987
Standard Industrial Classification to the 2002 North American Industry
Classification System.  On Jan. 7, 2004, the BLS will post revised historical
measures through the fourth quarter of 2002 on its web site
http://www.bls.gov/lpc/, but will not incorporate these data into the LABSTAT
database at that time.  In keeping with usual practices, revised data for the
second and third quarters of 2003 will be reported in the "Productivity and
Costs" release of Feb. 5, 2004, which also will include revised first-quarter
2003 data.  All revised historical data will be incorporated into the LABSTAT
database at the time of that release.


                                      
                               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 were  adjusted  to
hours at work using the BLS Hours at Work survey, conducted for this purpose.
Data from the National Compensation Survey are used for recent years.
     Data  from  the  BLS Current Population Survey (CPS) are used  for  farm
labor, nonfarm proprietors, and nonfarm unpaid family workers.  Estimates  of
labor input for government enterprises are derived from the CPS, the CES, and
the  National  Income and Product Accounts (NIPA) prepared by the  Bureau  of
Economic Analysis (BEA) of the Department of Commerce.

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     117.4      140.4     119.6     137.4       111.9      117.1       112.0      115.2
            II     117.8      139.4     118.3     138.2       111.6      117.3       113.3      115.8
           III     118.8      139.1     117.1     139.1       112.1      117.1       115.1      116.4
            IV     121.3      140.3     115.6     139.8       112.8      115.2       117.0      115.9

        ANNUAL     118.8      139.8     117.6     138.6       112.1      116.7       114.3      115.8

  2002       I     123.9      142.3     114.9     141.0       113.4      113.8       119.7      116.0
            II     124.1      142.5     114.8     142.4       113.5      114.7       118.8      116.2
           III     125.9      144.4     114.6     143.1       113.5      113.6       120.9      116.3
            IV     126.4      145.0     114.7     143.7       113.4      113.7       122.1      116.8

        ANNUAL     125.1      143.5     114.7     142.5       113.5      113.9       120.4      116.3

  2003       I     127.2      145.5     114.3     144.8       113.3      113.8       123.0      117.2
            II     129.5      147.1     113.6     146.3       114.2      112.9       125.3      117.5
           III    r132.2     r150.7    r114.0    r147.1       114.2     r111.3      r129.6      118.0
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2001       I      -0.5       -1.0      -0.5       4.6         0.8        5.1         0.3        3.4
            II       1.5       -2.8      -4.3       2.3        -0.9        0.8         4.6        2.2
           III       3.3       -0.9      -4.1       2.5         1.6       -0.8         6.8        1.8
            IV       8.7        3.5      -4.8       2.1         2.7       -6.1         6.7       -1.6

        ANNUAL       2.0       -0.2      -2.1       3.8         1.0        1.8         2.3        2.0

  2002       I       8.7        5.9      -2.6       3.5         2.2       -4.8         9.6        0.3
            II       0.8        0.6      -0.2       4.0         0.4        3.1        -3.2        0.7
           III       5.9        5.3      -0.6       2.1         0.0       -3.6         7.6        0.5
            IV       1.5        1.7       0.2       1.6        -0.4        0.1         3.8        1.5

        ANNUAL       5.3        2.7      -2.5       2.8         1.2       -2.3         5.3        0.4

  2003       I       2.7        1.4      -1.2       3.2        -0.6        0.5         3.2        1.6
            II       7.4        4.5      -2.7       4.1         3.5       -3.1         7.7        1.0
           III      r8.6      r10.2      r1.4      r2.3        r0.0      r-5.8       r14.2       r1.7
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2001       I       2.2        1.4      -0.8       4.9         1.4        2.6         1.4        2.2
            II       1.1       -0.7      -1.7       4.8         1.4        3.7        -0.5        2.1
           III       1.7       -1.0      -2.6       3.3         0.6        1.6         3.7        2.3
            IV       3.2       -0.3      -3.4       2.9         1.0       -0.3         4.6        1.4

        ANNUAL       2.0       -0.2      -2.1       3.8         1.0        1.8         2.3        2.0

  2002       I       5.5        1.4      -3.9       2.6         1.4       -2.8         6.9        0.7
            II       5.4        2.3      -2.9       3.0         1.7       -2.2         4.9        0.3
           III       6.0        3.8      -2.1       2.9         1.3       -2.9         5.0        0.0
            IV       4.2        3.4      -0.8       2.8         0.5       -1.4         4.3        0.7

        ANNUAL       5.3        2.7      -2.5       2.8         1.2       -2.3         5.3        0.4

  2003       I       2.7        2.2      -0.5       2.7        -0.1        0.0         2.8        1.1
            II       4.3        3.2      -1.1       2.8         0.6       -1.5         5.5        1.1
           III      r5.0       r4.4      -0.6       2.8         0.6      r-2.1        r7.1        1.4
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       December 3, 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     116.9      140.7     120.3     136.7       111.3      117.0       113.5      115.7
            II     117.4      139.7     119.0     137.4       111.0      117.1       114.9      116.3
           III     118.3      139.4     117.8     138.2       111.4      116.8       116.8      116.8
            IV     120.7      140.4     116.3     138.9       112.1      115.1       119.0      116.5

        ANNUAL     118.3      140.1     118.4     137.8       111.4      116.5       116.1      116.3

  2002       I     123.4      142.5     115.5     140.2       112.8      113.6       121.5      116.4
            II     123.7      142.9     115.5     141.5       112.9      114.4       121.2      116.8
           III     125.5      144.7     115.3     142.2       112.8      113.3       123.1      116.9
            IV     126.0      145.3     115.3     142.8       112.7      113.3       124.3      117.3

        ANNUAL     124.7      143.9     115.4     141.7       112.8      113.6       122.5      116.9

  2003       I     126.7      145.8     115.1     143.7       112.4      113.4       125.2      117.7
            II     128.9      147.5     114.4     145.0       113.2      112.5       127.5      117.9
           III    r131.8     r151.1    r114.7     146.1       113.4     r110.8      r131.6     r118.3
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2001       I      -0.4       -0.9      -0.5       4.3         0.5        4.7         0.8        3.3
            II       1.6       -2.7      -4.3       2.0        -1.2        0.3         5.0        2.0
           III       3.4       -0.8      -4.1       2.4         1.5       -0.9         6.6        1.7
            IV       8.3        2.9      -5.0       2.1         2.7       -5.7         7.7       -1.0

        ANNUAL       1.9       -0.1      -2.0       3.6         0.8        1.7         2.4        1.9

  2002       I       9.3        6.2      -2.9       3.7         2.4       -5.2         8.7       -0.2
            II       1.0        0.9       0.0       3.9         0.3        2.9        -0.9        1.4
           III       5.9        5.2      -0.6       2.0        -0.2       -3.7         6.6        0.1
            IV       1.7        1.7       0.0       1.6        -0.4       -0.1         3.9        1.4

        ANNUAL       5.4        2.7      -2.5       2.8         1.2       -2.4         5.6        0.5

  2003       I       2.1        1.4      -0.7       2.6        -1.2        0.4         2.8        1.4
            II       7.0        4.6      -2.2       3.6         3.0       -3.2         7.4        0.8
           III      r9.4      r10.3      r0.8      r3.0        r0.7      r-5.8       r13.5        1.5
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2001       I       2.0        1.4      -0.6       4.5         1.1        2.5         1.4        2.1
            II       1.1       -0.6      -1.6       4.6         1.1        3.5        -0.3        2.1
           III       1.7       -0.8      -2.5       3.0         0.3        1.3         3.7        2.2

            IV       3.2       -0.4      -3.5       2.7         0.9       -0.5         5.0        1.5

        ANNUAL       1.9       -0.1      -2.0       3.6         0.8        1.7         2.4        1.9

  2002       I       5.6        1.3      -4.0       2.5         1.3       -2.9         7.0        0.6
            II       5.4        2.3      -3.0       3.0         1.7       -2.3         5.4        0.5
           III       6.1        3.8      -2.1       2.9         1.3       -3.0         5.4        0.1
            IV       4.4        3.5      -0.9       2.8         0.5       -1.6         4.5        0.7

        ANNUAL       5.4        2.7      -2.5       2.8         1.2       -2.4         5.6        0.5

  2003       I       2.6        2.3      -0.3       2.5        -0.4       -0.1         3.1        1.1
            II       4.1        3.2      -0.9       2.4         0.3       -1.6         5.2        0.9
           III      r5.0       r4.4     r-0.5       2.7         0.5      r-2.2        r6.8        1.3
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       December 3, 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           r135.1       r134.8         99.8        132.0          107.5         r97.7
            II           r136.1       r133.1         97.8        133.6          107.9         r98.2
           III           r137.9       r131.2         95.1        135.0          108.8          97.9
            IV           r140.6       r129.7         92.3        136.7          110.3         r97.2

        ANNUAL           r137.3       r132.2         96.3        134.3          108.6         r97.8

  2002       I           r144.0       r130.4         90.6        138.3          111.3         r96.1
            II           r145.9       r131.5         90.2        140.5          112.0         r96.3
           III           r147.7       r132.0         89.4        141.3          112.1         r95.7
            IV           r147.9       r131.1         88.6        142.4          112.4         r96.3

        ANNUAL           r146.3       r131.3         89.7        140.6          112.0         r96.1

  2003       I           r150.0       r131.4         87.6        144.3          112.9         r96.2
            II           r151.0       r130.3         86.3        146.1          114.1         r96.8
           III           r154.3       r131.5         85.2        147.6          114.6         r95.7
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I            r-2.4        r-8.0         -5.7          1.6           -2.1          r4.1
            II             r3.2        r-4.9         -7.9          5.0            1.7          r1.7
           III             r5.2        r-5.7        -10.3          4.1            3.2         r-1.0
            IV             r8.0        r-4.3        -11.5          5.1            5.7         r-2.8

        ANNUAL             r1.8        r-4.7         -6.4          2.4           -0.4          r0.6

  2002       I            r10.0         r2.1         -7.2          5.0            3.7         r-4.6
            II             r5.4         r3.4         -1.9          6.3            2.7          r0.9
           III             r5.3         r1.7         -3.4          2.5            0.3         r-2.6
            IV             r0.4        r-2.9         -3.3          3.1            1.1          r2.7

        ANNUAL             r6.5        r-0.7         -6.8          4.7            3.1         r-1.7

  2003       I             r5.8         r1.0         -4.5          5.4            1.5         r-0.3
            II             r2.8        r-3.2         -5.8          5.0            4.4          r2.2
           III             r9.0         r3.5        r-5.0         r4.1           r1.7         r-4.5
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I             r1.1        r-2.5         -3.6          0.5           -2.9         r-0.6
            II             r1.0        r-4.8         -5.7          3.4            0.0          r2.4
           III              1.8        r-5.8         -7.5          2.1           -0.6          r0.2
            IV             r3.4        r-5.7         -8.9          3.9            2.1          r0.5

        ANNUAL             r1.8        r-4.7         -6.4          2.4           -0.4          r0.6

  2002       I             r6.6        r-3.3         -9.2          4.8            3.6         r-1.7
            II             r7.1        r-1.2         -7.8          5.1            3.8         r-1.9
           III             r7.2         r0.7         -6.1          4.7            3.1         r-2.3
            IV             r5.2          1.0         -4.0          4.2            1.9          -0.9

        ANNUAL             r6.5        r-0.7         -6.8          4.7            3.1         r-1.7

  2003       I             r4.2         r0.8         -3.3          4.3            1.4          r0.2
            II             r3.5        r-0.9         -4.2          4.0            1.8          r0.5
           III             r4.4        r-0.4         -4.7         r4.4            2.2          r0.0
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 3, 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           r149.4        158.3        106.0        129.4          105.3          86.6
            II           r150.4       r155.7        103.5        131.3          106.1         r87.3
           III           r152.4       r152.5        100.1        132.0          106.4         r86.6
            IV           r155.3       r150.1         96.7        134.3          108.4         r86.5

        ANNUAL           r151.8       r154.1        101.5        131.7          106.5         r86.8

  2002       I           r160.0       r151.2         94.5        135.6          109.1         r84.8
            II           r162.8       r153.2         94.1        138.2          110.3         r84.9
           III           r165.9       r154.5         93.1        138.8          110.1         r83.6
            IV           r168.0       r154.6         92.0        140.0          110.5         r83.3

        ANNUAL           r164.2       r153.4         93.4        138.1          110.0         r84.1

  2003       I           r170.2       r155.2         91.2        141.5          110.6         r83.1
            II           r171.4       r153.6         89.7        143.1          111.7         r83.5
           III           r177.4       r156.7         88.3       r144.3         r112.0         r81.4
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I            r-1.8        r-8.7         -7.0          3.1           -0.6          r5.0
            II             r2.9        r-6.5         -9.1          6.2            2.9          r3.3
           III             r5.3        r-8.0        -12.6          2.0            1.1         r-3.1
            IV             r7.9        r-5.9        -12.8          7.2            7.8         r-0.7

        ANNUAL             r1.4        r-5.8         -7.1          1.8           -0.9          r0.4

  2002       I            r12.6         r2.8         -8.7          3.9            2.6         r-7.7
            II             r7.4         r5.5         -1.7          8.1            4.4          r0.7
           III             r7.8         r3.3         -4.2          1.6           -0.5         r-5.8
            IV             r5.1         r0.4         -4.4          3.5            1.5         r-1.5

        ANNUAL             r8.1        r-0.5         -8.0          4.9            3.3         r-3.0

  2003       I             r5.4         r1.4         -3.8          4.4            0.5         r-0.9
            II             r2.7        r-3.9         -6.4          4.6            4.0          r1.8
           III            r14.8         r8.1        r-5.9         r3.5           r1.1         r-9.9
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I             r0.6        r-2.8         -3.3         -1.1           -4.3          -1.6
            II             r0.3        r-5.8         -6.1          3.0           -0.4          r2.7
           III             r1.4        r-7.4         -8.6          1.1           -1.6         r-0.3
            IV             r3.5        r-7.3        -10.4          4.6            2.7          r1.1

        ANNUAL             r1.4        r-5.8         -7.1          1.8           -0.9          r0.4

  2002       I             r7.1        r-4.5        -10.8          4.8            3.6         r-2.1
            II             r8.2        r-1.6         -9.1          5.3            3.9         r-2.8
           III             r8.9         r1.3         -7.0          5.2            3.5         r-3.4
            IV             r8.2         r3.0         -4.8          4.2            2.0         r-3.6

        ANNUAL             r8.1        r-0.5         -8.0          4.9            3.3         r-3.0

  2003       I             r6.4         r2.6         -3.5          4.4            1.4         r-1.9
            II             r5.2         r0.3         -4.7          3.5            1.3         r-1.6
           III             r6.9         r1.4        r-5.1         r4.0            1.8         r-2.7
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 3, 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           r122.8       r112.4         91.6        134.7          109.7        r109.7
            II            123.8       r111.6         90.2        135.8          109.7         109.7
           III           r124.9       r110.7         88.6        138.6          111.7        r110.9
            IV           r127.2       r110.0         86.4        139.2          112.4        r109.5

        ANNUAL           r124.6       r111.2         89.2        137.0          110.8        r109.9

  2002       I           r129.2       r110.3         85.4        141.6          113.9        r109.6
            II           r130.3       r110.6         84.9        142.9          113.9        r109.6
           III           r131.0       r110.7         84.4        144.3          114.5        r110.1
            IV           r129.4       r108.8         84.1        145.3          114.7        r112.3

        ANNUAL           r130.0       r110.1         84.7        143.5          114.3        r110.4

  2003       I           r131.5       r109.0         82.9        147.8          115.5        r112.4
            II           r132.3       r108.4         81.9        149.9          117.0        r113.3
           III           r133.3       r108.1         81.1        151.8          117.9        r113.9
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I            r-3.6        r-7.0         -3.6         -0.8           -4.4          r2.9
            II             r3.2        r-2.9         -5.9          3.3            0.0          r0.1
           III             r3.8        r-3.2         -6.7          8.4            7.4          r4.5
            IV             r7.5        r-2.6         -9.4          1.9            2.5         r-5.2

        ANNUAL             r2.0        r-3.4         -5.3          3.6            0.8          r1.6

  2002       I             r6.5         r1.3         -4.9          7.1            5.8          r0.5
            II             r3.4         r1.2         -2.1          3.5            0.0          r0.1
           III             r2.3         r0.0         -2.2          4.2            2.0          r1.9
            IV            r-4.9        r-6.4         -1.6          2.6            0.6          r7.9

        ANNUAL             r4.3        r-1.0         -5.0          4.7            3.1          r0.4

  2003       I             r6.5         r0.7         -5.5          7.0            3.1          r0.5
            II             r2.6        r-2.4         -4.9          5.9            5.3          r3.2
           III             r3.1        r-0.8        r-3.8          5.3            2.9          r2.1
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I             r1.8        r-2.2         -3.9          3.1           -0.3          r1.3
            II              1.7        r-3.5         -5.1          4.1            0.7           2.4
           III             r1.9        r-4.0         -5.9          4.1            1.3          r2.1
            IV             r2.6        r-4.0         -6.4          3.1            1.3          r0.5

        ANNUAL             r2.0        r-3.4         -5.3          3.6            0.8          r1.6

  2002       I             r5.2        r-1.9         -6.7          5.1            3.9         r-0.1
            II              5.3        r-0.9         -5.8          5.2            3.9          -0.1
           III             r4.9         r0.0         -4.7          4.2            2.5         r-0.7
            IV             r1.7        r-1.0         -2.7          4.3            2.1          r2.6

        ANNUAL             r4.3        r-1.0         -5.0          4.7            3.1          r0.4

  2003       I             r1.7        r-1.2         -2.9          4.3            1.4          r2.5
            II             r1.5        r-2.1         -3.6          4.9            2.7          r3.3
           III              1.8         -2.3         -4.0          5.2           r2.9          r3.4
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 3, 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

  2001       I    118.7    147.9     124.7    131.2     106.8     110.6    111.6    110.8     93.1    109.3
            II    120.0    147.8     123.1    132.6     107.1     110.4    113.5    111.3     95.4    109.9
           III    121.3    147.7     121.7    133.8     107.8     110.3    115.5    111.7     97.9    110.5
            IV    124.5    149.6     120.2    134.7     108.7     108.2    114.1    109.8    107.6    109.6

        ANNUAL    121.1    148.2     122.4    133.0     107.6     109.9    113.7    110.9     98.5    109.8

  2002       I    126.0    150.8     119.7    135.9     109.4     107.9    114.0    109.5    107.6    109.4
            II    127.7    152.8     119.6    137.3     109.5     107.5    114.5    109.4    107.8    109.3
           III    128.7    153.4     119.2    138.2     109.7     107.4    115.4    109.6    104.6    109.1
            IV    129.9    154.5     118.9    139.2     109.9     107.1    115.2    109.3    110.1    109.4

        ANNUAL    128.1    152.9     119.3    137.7     109.6     107.5    114.8    109.4    107.5    109.3

  2003       I    131.0    155.2     118.4    140.5     109.9     107.2    114.9    109.3    112.4    109.6
            II    133.7    157.6     117.9    141.8     110.7     106.1    112.6    107.8    126.8    109.4
           III    136.7    161.0     117.8    142.8     110.9     104.5    111.9    106.5    142.8    109.6
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2001       I     -2.6     -3.3      -0.7     -1.2      -4.7       1.4     10.1      3.7    -20.2      1.7
            II      4.7     -0.5      -5.0      4.3       1.0      -0.4      7.1      1.6     10.0      2.2
           III      4.4     -0.3      -4.5      3.7       2.8      -0.6      7.2      1.5     10.8      2.2
            IV     10.8      5.4      -4.9      2.7       3.3      -7.3     -4.9     -6.7     46.1     -3.3

        ANNUAL      2.0     -0.1      -2.1      3.1       0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      5.0      3.3      -1.6      3.7       2.5      -1.2     -0.2     -0.9     -0.2     -0.8
            II      5.5      5.3      -0.3      4.2       0.6      -1.3      1.7     -0.5      0.9     -0.3
           III      3.1      1.7      -1.4      2.7       0.5      -0.5      3.1      0.5    -11.2     -0.5
            IV      3.8      2.8      -1.0      2.8       0.8      -1.0     -0.6     -0.9     22.8      0.9

        ANNUAL      5.8      3.1      -2.5      3.5       1.9      -2.2      1.0     -1.3      9.1     -0.5

  2003       I      3.4      1.9      -1.5      3.8       0.0       0.4     -1.0      0.0      8.5      0.7
            II      8.4      6.3      -1.9      3.7       3.1      -4.3     -7.9     -5.3     61.6     -0.5
           III      9.2      8.9      -0.2      3.0       0.7      -5.6     -2.4     -4.7     60.9      0.6
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  2001       I      0.9      0.4      -0.4      3.5       0.1       2.6      6.7      3.7    -22.0      1.3
            II      1.5     -0.1      -1.6      3.9       0.5       2.3      6.8      3.5    -19.7      1.3
           III      1.6     -1.1      -2.7      2.7       0.0       1.1      7.8      2.9    -10.6      1.7
            IV      4.2      0.3      -3.8      2.4       0.5      -1.8      4.7      0.0      9.2      0.7

        ANNUAL      2.0     -0.1      -2.1      3.1       0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      6.2      1.9      -4.0      3.6       2.4      -2.4      2.2     -1.2     15.5      0.0
            II      6.4      3.4      -2.8      3.6       2.3      -2.6      0.9     -1.7     13.0     -0.6
           III      6.1      3.9      -2.1      3.3       1.7      -2.6     -0.1     -1.9      6.9     -1.3
            IV      4.4      3.2      -1.1      3.3       1.1      -1.0      1.0     -0.4      2.4     -0.2

        ANNUAL      5.8      3.1      -2.5      3.5       1.9      -2.2      1.0     -1.3      9.1     -0.5

  2003       I      4.0      2.9      -1.1      3.4       0.5      -0.6      0.8     -0.2      4.5      0.2
            II      4.7      3.1      -1.5      3.2       1.1      -1.4     -1.7     -1.5     17.6      0.1
           III      6.2      4.9      -1.2      3.3       1.1      -2.7     -3.0     -2.8     36.4      0.4
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        December 3, 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
-1.4 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 2003.



                            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.