USDL 05-1673
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WEDNESDAY, SEPTEMBER 7, 2005.

Internet address: http://www.bls.gov/lpc/
Historical, technical
information:               (202) 691-5606
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Media contact:             (202) 691-5902


                           PRODUCTIVITY AND COSTS
                        Second Quarter 2005, revised


     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised productivity data--as measured by output per hour of all
persons--for the second quarter of 2005.  The seasonally adjusted annual
rates of productivity change in the second quarter were:

               0.7 percent in the business sector and
               1.8 percent in the nonfarm business sector.

In both sectors, increases in productivity were smaller than reported on
Aug. 9, as output was revised down and hours were revised up.  (See table C.)

     In manufacturing, the revised productivity changes in the second quarter
were:

               3.6 percent in manufacturing,
               3.3 percent in durable goods manufacturing, and
               4.4 percent in nondurable goods manufacturing.

     In total manufacturing, the change in productivity was revised down from
a preliminary estimate of 4.1 percent.  Output and hours in manufacturing,
which includes about 13 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.  Second-quarter measures are summarized in table A
and appear in detail in tables 1 through 5; the differences between these
measures and the preliminary second-quarter figures issued on Aug. 9 are
shown in table C.

     The data sources and methods used in the preparation of the
manufacturing series differ from those used in preparing the business and
nonfarm business series, and these measures are not directly comparable.
Output measures for business and nonfarm business are based on measures of
gross domestic product prepared by the Bureau of Economic Analysis of the
U.S. Department of Commerce.  Quarterly output measures for manufacturing
reflect indexes of industrial production independently prepared by the Board
of Governors of the Federal Reserve System.  See Technical Notes for further
information on data sources.

------------------------------------------------------------------------------
Table A. Productivity and costs: Revised second-quarter 2005 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                 0.7       4.0        3.2     3.3      -0.8       2.6
Nonfarm business         1.8       4.1        2.2     4.4       0.2       2.5
Manufacturing            3.6       0.8       -2.7     8.4       4.1       4.7
  Durable                3.3       1.5       -1.8     8.2       3.9       4.8
  Nondurable             4.4       0.0       -4.2     8.6       4.3       4.0
------------------------------------------------------------------------------
                           Percent change from same quarter a year ago

Business                 2.0       4.1        2.0     6.4       3.4       4.3
Nonfarm business         2.2       4.2        2.0     6.5       3.5       4.2
Manufacturing            4.6       3.3       -1.3     9.1       6.0       4.3
  Durable                5.3       4.7       -0.5     9.0       5.9       3.5
  Nondurable             4.1       1.5       -2.5     9.2       6.1       4.9
------------------------------------------------------------------------------

Business

     From the first quarter to the second quarter of 2005, productivity in
the business sector grew 0.7 percent as output increased 4.0 percent and
hours worked by all persons engaged in the sector--employees, proprietors,
and unpaid family workers-- rose 3.2 percent (tables A and 1).  The
productivity increase is less than those posted for the previous five
quarters; it is the smallest increase since a 0.3-percent rise was posted in
the fourth quarter of 2003 (seasonally adjusted annual rates).

     Hourly compensation in the business sector increased 3.3 percent in the
second quarter of 2005 and 4.7 percent one quarter earlier (as revised).
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, fell 0.8
percent in the second quarter of 2005 after growing by 2.3 percent in the
first quarter of the year.

     Unit labor costs rose 2.6 percent in the second quarter of 2005.
Although hourly compensation rose more in the first quarter 2005 than in the
second quarter, the larger increase in labor productivity in the first
quarter offset more of the increase in labor costs and unit labor costs in
the first quarter grew more slowly, 1.7 percent, than the 2.6-percent
increase in the second quarter.  The implicit price deflator for the business
sector rose 2.4 percent in the second quarter and 2.7 percent in the first
quarter.


Nonfarm business

     Productivity in the nonfarm business sector grew at a 1.8 percent annual
rate in the second quarter of 2005, reflecting increases of 4.1 percent in
output and 2.2 percent in hours of all persons (tables A and 2).  The second
quarter increase was one of the smaller increases posted in the nonfarm
business sector since the business-cycle peak in the first quarter of 2001;
productivity growth over the period has risen at an average annual rate of
3.5 percent.

     Hourly compensation rose 4.4 percent in the second quarter of 2005,
following a 5.5 percent advance in the first quarter.  When the rise in
consumer prices was taken into account, real hourly compensation edged up 0.2
percent in the second quarter of 2005.

     Unit labor costs increased 2.5 percent in the second quarter of 2005,
somewhat more than the 2.2-percent increase posted in the first quarter of
the year.  The implicit price deflator for nonfarm business output rose 2.4
percent in the second quarter of 2005 and 3.0 percent one quarter earlier.


Manufacturing

     In the second quarter of 2005, productivity increased 3.6 percent in
manufacturing, as output increased 0.8 percent and hours of all persons fell
2.7 percent (seasonally adjusted annual rates).  In the durable goods sector,
productivity grew 3.3 percent in the second quarter of 2005, reflecting an
increase in output of 1.5 percent and a drop in hours of 1.8 percent.  In
nondurable goods, output per hour rose 4.4 percent as output was unchanged
and hours declined 4.2 percent (tables 3, 4, and 5).  Hours of all persons in
the nondurable manufacturing sector have declined in every quarter since the
third quarter of 1999.

     The hourly compensation of all manufacturing workers increased 8.4
percent during the second quarter of 2005, reflecting an 8.2-percent rise in
hourly compensation in durable goods industries and an 8.6-percent increase
in the nondurable goods sector.  Real hourly compensation in the total
manufacturing sector rose 4.1 in the second quarter and 4.6 percent one
quarter earlier.

     Unit labor costs in manufacturing increased 4.7 percent in the second
quarter of 2005, more than they had in the first quarter, when they rose 2.8
percent.  Unit labor costs grew 4.8 percent in durable goods and 4.0 percent
in nondurable goods in the second quarter of 2005.


Nonfinancial corporations

     Preliminary second quarter 2005 measures of productivity and costs were
reported today for nonfinancial corporations (tables B and 6).  Productivity
increased 6.8 percent during the second quarter, reflecting a 9.5-percent
rise in output and 2.6 percent growth in employee hours (seasonally adjusted
annual rates).  In the first quarter of 2005, output per hour rose 2.7
percent (as revised), reflecting increases of 3.3 percent in output and 0.5
percent in employee hours.  Nonfinancial corporations include all
corporations doing business in the United States except those classified as
offices in the finance and insurance sector, offices of bank holding
companies, or offices of other holding companies.

----------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Preliminary second-quarter 2005
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

2005 II   6.8     9.5       2.6     4.0     -0.1    -2.6     43.2    1.3
----------------------------------------------------------------------------
                 Percent change from same quarter a year ago

2005 II   6.3     8.0       1.6     6.7      3.6     0.3     14.9    0.8
----------------------------------------------------------------------------

     Hourly compensation rose 4.0 percent in the second quarter of 2005,
following a 5.9 percent gain in the first quarter.  When the rise in consumer
prices is taken into account, real hourly compensation was little changed in
the second quarter and rose 3.5 percent one quarter earlier.

     Unit labor costs for nonfinancial corporations dropped 2.6 percent in
the second quarter after increasing by 3.1 percent in the first quarter.
Unit profits grew 43.2 percent in second quarter, 2005, the largest one-
quarter increase since a 51.0 percent rise in the fourth quarter of 2002.
The implicit price deflator for nonfinancial corporate output rose 1.3
percent in the second quarter of 2005.

Revised Measures

     Current and previous measures for the second quarter of 2005 for the
business, nonfarm business, and manufacturing sectors are compared in table
C.  The quarterly movements differ from those reported on Aug. 9 based on
information then available.  In the business and nonfarm business sectors and
the manufacturing sector, productivity and output were revised down and hours
of all persons were revised up.  Hourly compensation and unit labor costs in
all of these sectors were revised up.

-----------------------------------------------------------------------
Table C. Business, nonfarm business, and manufacturing: Previous and
revised productivity and related measures
(Quarterly percent changes at seasonally adjusted annual rates)
-----------------------------------------------------------------------                                                             
                                                      Real      
                                             Hourly   hourly    Unit
                   Produc-                   compen-  compen-   labor
Sector             tivity   Output   Hours   sation   sation    costs
-----------------------------------------------------------------------                                                                
                             Second quarter 2005
Business:                                                       
  Previous          1.2      4.2      3.0     2.5     -1.6       1.4
  Revised           0.7      4.0      3.2     3.3     -0.8       2.6
Nonfarm business:                                               
  Previous          2.2      4.4      2.1     3.5     -0.6       1.3
  Revised           1.8      4.1      2.2     4.4      0.2       2.5
Manufacturing:                                                  
  Previous          4.1      1.2     -2.8     6.6      2.3       2.3
  Revised           3.6      0.8     -2.7     8.4      4.1       4.7
 
                             First quarter 2005
Business:                                                       
  Previous          2.9      4.4      1.4     6.2      3.7       3.2
  Revised           2.9      4.4      1.4     4.7      2.3       1.7
Nonfarm business:                                               
  Previous          3.2      4.3      1.1     6.9      4.5       3.6
  Revised           3.2      4.3      1.1     5.5      3.1       2.2
Manufacturing:                                                  
  Previous          4.2      3.5     -0.7     7.1      4.7       2.8
  Revised           4.2      3.5     -0.7     7.1      4.6       2.8
-----------------------------------------------------------------------     
     
     Hourly compensation growth in the first quarter also was revised to
reflect new estimates of compensation.  In the business and nonfarm business
sectors, hourly compensation grew more slowly in the first quarter than
reported in August.  As a result, unit labor costs in these sectors now grow
less than previously reported.  In the manufacturing sector, hourly
compensation data for the first quarter are similar to those reported
earlier.

Revised Measures: Nonfinancial Corporations

     Data for the first quarter of 2005 were revised for the nonfinancial
corporate sector.  Productivity, output, hourly compensation, and unit labor
costs grew more slowly than reported on August 9.

----------------------------------------------------------------------------
Table D.  Nonfinancial corporations: Previous and revised productivity
and cost measures
(Quarterly percent changes at seasonally adjusted annual rates)
----------------------------------------------------------------------------                                                           
                                           Real                     
                                  Hourly   hourly  Unit             Implicit
          Produc-                 compen-  compen- labor  Unit      price
          tivity   Output  Hours  sation   sation  costs  profits   deflator
----------------------------------------------------------------------------                                                                    
                            First quarter 2005

Previous    3.6     4.1     0.5     7.3      4.8     3.5     6.2       2.2
Revised     2.7     3.3     0.5     5.9      3.5     3.1     7.1       2.2
----------------------------------------------------------------------------                                      
                                      
                              Next release date
                                      
     The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Thursday, Nov. 3, 2005.  Preliminary third-quarter measures for business,
nonfarm business, and manufacturing will be released at that time.

-----------------------------------------------------------------------------
The  index  numbers and rates of change reported by BLS for productivity  and
costs in its news release and on its Internet site are rounded to one decimal
place,  based  upon unrounded data using many decimal places.  This  rounding
protocol  has  been  practiced  in  order  to  facilitate  ease  of  use  and
interpretation of the published data.  This has meant, however, that if  data
users  calculated rates of change using the published rounded index  figures,
their results could differ from the published rates of change, simply due  to
differences in rounding.

In  order  to  make the data directly used in the calculations  more  readily
available to the public and to ensure greater transparency of its calculating
methods,  BLS,  beginning  with  the December  6,  2005  publication  of  the
quarterly "Productivity and Costs" news release, will modify its productivity
program  practices.  It will post on its web site productivity index  numbers
rounded  to  three  decimal  places, and, in  addition,  will  calculate  all
published  rates  of  change from those indexes.  The change  in  calculation
method  may  cause  published productivity growth rates to change  slightly--
likely  by  no  more  than  a  tenth--from the rates  that  would  have  been
calculated  using  the current method.  The convention of publishing  in  the
news release index values rounded to one decimal place will continue.
-----------------------------------------------------------------------------

                                   
                            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  estab-
lishments.   The  CES  also  provides average  weekly  paid  hours  of
production and nonsupervisory workers in these establishments.  Weekly
paid  hours are adjusted to hours at work using data from the National
Compensation  Survey (NCS).  The BLS Hours at Work  survey,  conducted
for  this  purpose, was used for years prior to 2001.  The  Office  of
Productivity and Technology estimates average weekly hours at work for
nonproduction  and  supervisory workers  using  information  from  the
Current Population Survey (CPS), the CES, and the NCS.
     Data  from  the 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,  and  private
households   (including  owner-occupied  housing).  Corresponding   ex-
clusions also are made in labor inputs. Business output accounted  for
about  78 percent of the value of GDP in 2000. Nonfarm business, which
also excludes farming, accounted for about 77 percent of GDP in 2000.
   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 3-digit NAICS industries: wood  product
manufacturing;  nonmetallic  mineral  product  manufacturing;  primary
metal manufacturing; fabricated metal product manufacturing; machinery
manufacturing;   computer   and  electronic   product   manufacturing;
electrical   equipment  and  appliance  manufacturing;  transportation
equipment  manufacturing; furniture and related product manufacturing;
and  miscellaneous  manufacturing. Nondurables include:  food  manufac-
turing;  beverage  and tobacco product manufacturing;  textile  mills;
textile  product  mills;  apparel manufacturing;  leather  and  allied
product  manufacturing;  paper  manufacturing;  printing  and  related
support   activities;  petroleum  and  coal  products   manufacturing;
chemical    manufacturing;   and   plastics   and   rubber    products
manufacturing.
   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;   private
households; unincorporated business; and those corporations classified
as  offices  of  bank  holding companies,  offices  of  other  holding
companies,   or   offices  in  the  finance  and   insurance   sector.
Nonfinancial corporations accounted for about 54 percent of the  value
of GDP in 2000.

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: 202-691-5606;  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

  2003       I     125.6      144.6     115.2     147.8       115.5      117.7       116.4      117.2
            II     127.9      146.4     114.5     150.3       117.3      117.5       117.2      117.4
           III     130.5      149.8     114.8     152.0       118.0      116.4       120.3      117.9
            IV     130.6      150.8     115.5     152.8       118.4      117.0       120.5      118.3

        ANNUAL     128.6      147.9     115.0     150.7       117.3      117.2       118.6      117.7

  2004       I     131.7      152.6     115.9     154.4       118.5      117.3       123.0      119.4
            II     132.8      154.1     116.1     155.7       118.2      117.2       126.1      120.5
           III     133.3      155.8     116.9     158.2       119.6      118.7       124.2      120.7
            IV     134.3      157.2     117.1     162.5       121.8      121.0       122.3      121.5

        ANNUAL     133.0      154.9     116.5     157.7       119.5      118.6       123.9      120.6

  2005       I     135.3      158.9     117.5    r164.4      r122.5     r121.5      r123.6      122.3
            II    r135.5     r160.4    r118.4    r165.7      r122.2      122.3      r124.3      123.0
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2003       I       2.8        1.7      -1.1       5.5         1.3        2.6         0.5        1.8
            II       7.6        4.9      -2.6       7.0         6.5       -0.6         2.8        0.6
           III       8.4        9.9       1.3       4.5         2.3       -3.6        10.7        1.5
            IV       0.3        2.6       2.3       2.3         1.4        2.1         0.9        1.6

        ANNUAL       3.9        3.4      -0.5       3.9         1.6        0.0         3.7        1.4

  2004       I       3.4        4.9       1.5       4.2         0.3        0.8         8.6        3.7
            II       3.4        4.0       0.6       3.3        -1.0       -0.1        10.3        3.8
           III       1.4        4.4       3.0       6.5         4.8        5.0        -5.8        0.7
            IV       3.1        3.6       0.5      11.3         7.5        7.9        -6.0        2.4

        ANNUAL       3.4        4.8       1.3       4.6         1.9        1.2         4.4        2.4

  2005       I       2.9        4.4       1.4      r4.7        r2.3       r1.7        r4.4        2.7
            II      r0.7       r4.0      r3.2      r3.3       r-0.8       r2.6        r2.1       r2.4
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2003       I       2.4        2.0      -0.4       3.0         0.1        0.6         2.7        1.4
            II       3.8        2.6      -1.1       3.6         1.4       -0.2         3.9        1.3
           III       4.7        4.2      -0.5       4.3         2.0       -0.4         4.6        1.4
            IV       4.7        4.7       0.0       4.8         2.9        0.1         3.7        1.4

        ANNUAL       3.9        3.4      -0.5       3.9         1.6        0.0         3.7        1.4

  2004       I       4.9        5.5       0.6       4.5         2.6       -0.4         5.7        1.9
            II       3.8        5.3       1.4       3.6         0.8       -0.2         7.6        2.7
           III       2.1        4.0       1.8       4.1         1.4        1.9         3.3        2.4
            IV       2.8        4.2       1.4       6.3         2.8        3.4         1.5        2.6

        ANNUAL       3.4        4.8       1.3       4.6         1.9        1.2         4.4        2.4

  2005       I       2.7        4.1       1.3      r6.4        r3.3       r3.6        r0.5        2.4
            II      r2.0       r4.1       2.0      r6.4        r3.4        4.3       r-1.4       r2.1
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       Sept. 7, 2005
  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

  2003       I     124.9      144.8     115.9     147.0       114.9      117.7       118.2      117.9
            II     126.9      146.5     115.4     149.3       116.5      117.6       118.7      118.0
           III     129.9      150.2     115.6     151.2       117.4      116.4       121.6      118.3
            IV     130.1      151.2     116.2     152.2       117.9      116.9       121.3      118.6

        ANNUAL     128.0      148.2     115.8     149.9       116.7      117.1       120.0      118.2

  2004       I     130.8      152.8     116.8     153.5       117.8      117.3       123.5      119.6
            II     132.2      154.5     116.8     154.9       117.6      117.1       126.5      120.6
           III     132.7      156.3     117.8     157.2       118.8      118.5       125.3      121.0
            IV     133.5      157.7     118.2     161.0       120.7      120.7       123.7      121.8

        ANNUAL     132.3      155.3     117.4     156.7       118.7      118.4       124.7      120.7

  2005       I     134.5      159.4     118.5    r163.2      r121.6     r121.3      r125.0      122.7
            II    r135.1     r161.0    r119.2    r165.0      r121.7      122.1      r125.7      123.4
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2003       I       3.1        2.0      -1.1       5.8         1.5        2.6         0.8        1.9
            II       6.6        4.7      -1.8       6.2         5.8       -0.3         1.7        0.4
           III       9.6       10.4       0.8       5.1         2.9       -4.1        10.2        1.0
            IV       0.8        2.8       2.0       2.7         1.8        2.0        -1.1        0.8

        ANNUAL       3.8        3.3      -0.5       4.0         1.6        0.2         3.2        1.3

  2004       I       2.1        4.2       2.0       3.5        -0.5        1.3         7.4        3.6
            II       4.5        4.6       0.1       3.7        -0.7       -0.8        10.0        3.2
           III       1.3        4.6       3.3       6.1         4.4        4.7        -3.6        1.5
            IV       2.5        3.9       1.4      10.2         6.4        7.6        -5.1        2.6

        ANNUAL       3.4        4.8       1.4       4.5         1.8        1.1         3.9        2.1

  2005       I       3.2        4.3       1.1      r5.5        r3.1       r2.2        r4.4        3.0
            II      r1.8       r4.1      r2.2      r4.4        r0.2       r2.5        r2.3       r2.4
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2003       I       2.0        1.7      -0.4       3.0         0.1        1.0         2.7        1.6
            II       3.5        2.5      -0.9       3.5         1.3        0.1         3.2        1.2
           III       4.8        4.2      -0.5       4.4         2.1       -0.4         4.1        1.2
            IV       5.0        4.9       0.0       5.0         3.0        0.0         2.8        1.0

        ANNUAL       3.8        3.3      -0.5       4.0         1.6        0.2         3.2        1.3

  2004       I       4.7        5.5       0.7       4.4         2.5       -0.3         4.5        1.5
            II       4.2        5.5       1.2       3.7         0.9       -0.4         6.5        2.1
           III       2.2        4.0       1.9       4.0         1.2        1.8         3.0        2.3

            IV       2.6        4.3       1.7       5.8         2.4        3.2         1.9        2.7

        ANNUAL       3.4        4.8       1.4       4.5         1.8        1.1         3.9        2.1

  2005       I       2.9        4.4       1.5      r6.3        r3.3       r3.4        r1.2        2.6
            II      r2.2       r4.2       2.0      r6.5        r3.5       r4.2       r-0.6       r2.4
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       Sept. 7, 2005
  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

  2003       I            151.6        131.8         86.9        156.5          122.3         103.2
            II            152.9        130.7         85.5        159.2          124.3         104.1
           III            156.9        132.1         84.2        161.5          125.4         102.9
            IV            158.1        134.2         84.9        163.2          126.5         103.2

        ANNUAL            154.8        132.2         85.4        160.1          124.6         103.4

  2004       I            159.3        136.0         85.4        159.1          122.1          99.9
            II            162.2        138.0         85.1        161.1          122.3          99.3
           III            164.0        139.4         85.0        164.9          124.7         100.6
            IV            166.5        141.0         84.7        169.3          126.9         101.7

        ANNUAL            163.0        138.6         85.0        163.6          124.0         100.4

  2005       I            168.2        142.3         84.6       r172.2         r128.3         102.4
            II           r169.7       r142.5         84.0       r175.8         r129.6        r103.6
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2003       I              5.7         -0.9         -6.3         17.9           13.1          11.5
            II              3.3         -3.4         -6.5          6.9            6.5           3.5
           III             11.0          4.5         -5.9          5.9            3.7          -4.5
            IV              3.2          6.6          3.3          4.3            3.4           1.1

        ANNUAL              5.2          0.0         -4.9          8.3            5.9           3.0

  2004       I              3.0          5.4          2.4         -9.7          -13.1         -12.4
            II              7.6          5.9         -1.6          5.1            0.7          -2.3
           III              4.4          4.0         -0.3          9.8            8.0           5.2
            IV              6.3          4.9         -1.3         11.2            7.4           4.6

        ANNUAL              5.3          4.8         -0.4          2.2           -0.5          -2.9

  2005       I              4.2          3.5         -0.7          7.1           r4.6           2.8
            II             r3.6         r0.8        r-2.7         r8.4           r4.1          r4.7
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2003       I              5.0          0.6         -4.2          8.2            5.2           3.1
            II              4.4         -1.3         -5.4          7.8            5.5           3.3
           III              5.5         -0.8         -6.0          8.4            6.0           2.7
            IV              5.8          1.6         -3.9          8.7            6.6           2.7


        ANNUAL              5.2          0.0         -4.9          8.3            5.9           3.0

  2004       I              5.1          3.2         -1.8          1.6           -0.2          -3.3
            II              6.1          5.6         -0.5          1.2           -1.6          -4.7
           III              4.5          5.5          0.9          2.1           -0.6          -2.3
            IV              5.3          5.1         -0.2          3.7            0.3          -1.5

        ANNUAL              5.3          4.8         -0.4          2.2           -0.5          -2.9

  2005       I              5.6          4.6         -1.0          8.3            5.1           2.5
            II             r4.6         r3.3         -1.3         r9.1           r6.0          r4.3
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                Sept. 7, 2005
  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

  2003       I            172.7        155.7         90.1        154.9          121.1          89.7
            II            174.3        154.3         88.6        157.7          123.1          90.5
           III            180.9        157.6         87.1        160.1          124.3          88.5
            IV            182.8        161.5         88.3        161.9          125.5          88.6

        ANNUAL            177.6        157.3         88.5        158.6          123.5          89.3

  2004       I            184.4        164.6         89.3        155.5          119.4          84.3
            II            187.8        167.1         88.9        158.2          120.1          84.2
           III            190.0        169.5         89.2        162.1          122.6          85.3
            IV            193.4        172.1         89.0        166.0          124.4          85.8

        ANNUAL            188.9        168.3         89.1        160.4          121.6          84.9

  2005       I            196.1        174.3         88.9       r169.0         r125.9          86.2
            II           r197.7       r175.0         88.5       r172.4         r127.1         r87.2
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2003       I              5.1         -1.6         -6.4         22.2           17.2          16.3
            II              3.7         -3.4         -6.9          7.3            6.9           3.4
           III             16.0          8.7         -6.3          6.2            3.9          -8.5
            IV              4.2         10.1          5.7          4.7            3.8           0.5

        ANNUAL              6.9          1.3         -5.3          9.3            6.9           2.3

  2004       I              3.6          8.1          4.3        -14.9          -18.1         -17.9
            II              7.7          6.0         -1.5          6.9            2.5          -0.7
           III              4.6          6.0          1.3         10.3            8.5           5.5
            IV              7.5          6.3         -1.1          9.9            6.1           2.2

        ANNUAL              6.4          7.0          0.6          1.1           -1.5          -4.9

  2005       I              5.7          5.2         -0.5         r7.5           r5.1          r1.7
            II             r3.3         r1.5         -1.8         r8.2           r3.9          r4.8
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2003       I              6.7          1.7         -4.7          9.1            6.0           2.2
            II              5.9         -0.6         -6.1          8.7            6.4           2.7
           III              7.9          0.7         -6.7          9.6            7.3           1.6
            IV              7.2          3.3         -3.6          9.9            7.8           2.5

        ANNUAL              6.9          1.3         -5.3          9.3            6.9           2.3

  2004       I              6.8          5.8         -1.0          0.4           -1.4          -6.0
            II              7.8          8.3          0.4          0.3           -2.5          -6.9
           III              5.0          7.6          2.4          1.3           -1.4          -3.6
            IV              5.8          6.6          0.7          2.5           -0.9          -3.2

        ANNUAL              6.4          7.0          0.6          1.1           -1.5          -4.9

  2005       I              6.4          5.9         -0.5          8.7           r5.5           2.2
            II             r5.3         r4.7         -0.5         r9.0           r5.9          r3.5
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                Sept. 7, 2005
  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

  2003       I            130.2        106.9         82.1        158.0          123.5         121.4
            II            131.1        106.0         80.9        160.5          125.3         122.4
           III            132.6        105.9         79.8        162.7          126.3         122.6
            IV            133.6        106.5         79.7        163.9          127.0         122.7

        ANNUAL            131.8        106.3         80.6        161.2          125.5         122.3

  2004       I            134.5        107.1         79.6        164.1          125.9         122.0
            II            137.0        108.6         79.3        164.7          125.1         120.3
           III            138.6        109.0         78.7        168.1          127.1         121.2
            IV            140.2        109.8         78.3        173.5          130.1         123.8

        ANNUAL            137.6        108.6         79.0        167.6          127.0         121.8

  2005       I            141.1        110.2         78.1        176.1         r131.3        r124.9
            II           r142.6       r110.2        r77.3       r179.8         r132.6        r126.1
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2003       I              6.5          0.1         -6.0         10.3            5.9           3.6
            II              2.6         -3.5         -5.9          6.3            5.9           3.6
           III              4.9         -0.6         -5.2          5.6            3.4           0.7
            IV              2.8          2.4         -0.4          3.0            2.1           0.2

        ANNUAL              2.8         -1.5         -4.2          6.4            4.0           3.5

  2004       I              2.9          2.1         -0.8          0.5           -3.3          -2.4
            II              7.5          5.7         -1.7          1.7           -2.6          -5.5
           III              4.8          1.7         -3.0          8.4            6.6           3.4
            IV              4.6          2.9         -1.7         13.7            9.7           8.6

        ANNUAL              4.3          2.2         -2.1          3.9            1.2          -0.4

  2005       I              2.5          1.5         -1.1         r6.1           r3.7          r3.5
            II             r4.4         r0.0        r-4.2         r8.6           r4.3          r4.0
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2003       I              2.6         -0.9         -3.4          6.7            3.7           4.0
            II              2.2         -2.2         -4.3          6.4            4.1           4.1
           III              2.3         -2.6         -4.8          6.2            3.9           3.9
            IV              4.2         -0.4         -4.4          6.3            4.3           2.0

        ANNUAL              2.8         -1.5         -4.2          6.4            4.0           3.5

  2004       I              3.3          0.1         -3.1          3.8            2.0           0.5
            II              4.5          2.4         -2.0          2.7           -0.2          -1.8
           III              4.5          3.0         -1.5          3.3            0.6          -1.1
            IV              5.0          3.1         -1.8          5.9            2.4           0.9


        ANNUAL              4.3          2.2         -2.1          3.9            1.2          -0.4

  2005       I              4.9          2.9         -1.8         r7.4           r4.3           2.4
            II             r4.1          1.5        r-2.5         r9.2           r6.1          r4.9
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                Sept. 7, 2005
  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

  2003       I    130.4    152.3     116.8    144.6     113.0     110.9    111.4    111.0    107.8    110.7
            II    132.7    154.3     116.3    147.0     114.8     110.8    110.5    110.7    113.7    111.0
           III    135.1    156.9     116.2    148.9     115.6     110.2    110.9    110.4    119.9    111.3
            IV    135.9    158.7     116.8    149.8     116.0     110.2    110.8    110.4    124.8    111.7

        ANNUAL    133.5    155.6     116.5    147.6     114.8     110.5    110.9    110.6    116.7    111.2

  2004       I    136.1    160.0     117.5    150.3     115.4     110.4    111.4    110.7    130.2    112.4
            II    136.9    161.3     117.8    151.7     115.2     110.8    111.5    111.0    138.6    113.4
           III    139.4    165.0     118.4    154.0     116.5     110.5    110.3    110.5    139.7    113.1
            IV    142.3    169.0     118.8    158.0     118.4     111.0    108.8    110.5    143.1    113.4

        ANNUAL    138.7    163.8     118.1    153.5     116.4     110.7    110.5    110.6    138.0    113.1

  2005       I   r143.2   r170.3     118.9   r160.3    r119.4    r111.9   r108.2    110.9   r145.6    114.0
            II    145.6    174.3     119.7    161.8     119.4     111.2    106.6    109.9    159.2    114.3
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2003       I      1.1     -1.8      -2.8      3.9      -0.3       2.9      6.7      3.9    -11.6      2.4
            II      7.3      5.5      -1.7      6.9       6.4      -0.4     -3.1     -1.1     23.8      0.9
           III      7.3      6.9      -0.3      5.2       2.9      -1.9      1.3     -1.1     23.9      1.0
            IV      2.4      4.5       2.1      2.4       1.5       0.0     -0.3     -0.1     17.2      1.5

        ANNUAL      4.1      2.7      -1.4      3.9       1.6      -0.2      0.1     -0.1     19.0      1.4

  2004       I      0.8      3.4       2.6      1.5      -2.3       0.7      2.1      1.1     18.6      2.7
            II      2.3      3.3       1.0      3.7      -0.7       1.3      0.3      1.1     28.2      3.7
           III      7.4      9.4       1.9      6.3       4.6      -1.0     -4.2     -1.9      3.4     -1.3
            IV      8.5      9.9       1.3     10.6       6.8       1.9     -5.2      0.0     10.0      1.1

        ANNUAL      3.9      5.3       1.4      4.0       1.3       0.2     -0.4      0.0     18.3      1.7

  2005       I     r2.7     r3.3       0.5     r5.9      r3.5      r3.1    r-2.5     r1.6     r7.1      2.2
            II      6.8      9.5       2.6      4.0      -0.1      -2.6     -5.7     -3.4     43.2      1.3
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  2003       I      3.5      2.0      -1.5      3.2       0.3      -0.3     -1.4     -0.6     25.6      1.2
            II      3.8      2.0      -1.8      3.6       1.4      -0.1     -0.1     -0.1     20.4      1.4
           III      4.6      3.1      -1.5      4.3       2.1      -0.3      0.8      0.0     19.6      1.6
            IV      4.5      3.7      -0.7      4.6       2.6       0.1      1.1      0.4     12.3      1.5

        ANNUAL      4.1      2.7      -1.4      3.9       1.6      -0.2      0.1     -0.1     19.0      1.4

  2004       I      4.4      5.1       0.7      4.0       2.1      -0.4      0.0     -0.3     20.8      1.5
            II      3.2      4.6       1.3      3.2       0.3       0.0      0.8      0.2     21.9      2.2
           III      3.2      5.2       1.9      3.5       0.7       0.3     -0.6      0.0     16.5      1.6
            IV      4.7      6.5       1.7      5.5       2.0       0.7     -1.8      0.1     14.7      1.5

        ANNUAL      3.9      5.3       1.4      4.0       1.3       0.2     -0.4      0.0     18.3      1.7

  2005       I     r5.2     r6.4       1.2     r6.6      r3.5      r1.3    r-2.9      0.2    r11.8      1.4
            II      6.3      8.0       1.6      6.7       3.6       0.3     -4.4     -0.9     14.9      0.8
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        September 7, 2005
  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 +1.4 index points approximately 95 percent of the time.  This
interval is based on the performance of this measure between the fourth
quarter of 1995 and the first quarter of 2005.
                                      
                                      
                                      
                            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 1978-2004 is based on the
     Consumer Price Index research series (CPI-U-RS).

(3)  Unit nonlabor payments include profits, consumption of fixed capital,
     taxes on production and imports less subsidies, net interest and
     miscellaneous payments, business current transfer payments, rental
     income of persons, and the current surplus of government enterprises.

(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 consumption of fixed capital, taxes on
     production and imports less subsidies, net interest and miscellaneous
     payments, and business current transfer payments.

(7)  Total unit costs are the sum of unit labor and nonlabor costs.

(8)  Unit profits include corporate profits before tax with inventory
     valuation and capital consumption adjustments.