Internet address: http://www.bls.gov/lpc/ USDL 03-674 

Historical, technical TRANSMISSION OF THIS 

 information: (202) 691-5606 MATERIAL IS EMBARGOED 

Current data: (202) 691-5200 UNTIL 8:30 A.M. EST, 

Media contact: (202) 691-5902 THURSDAY, NOVEMBER 6, 2003 

PRODUCTIVITY AND COSTS 

Third Quarter 2003 

 The Bureau of Labor Statistics of the U.S. Department of Labor today reported preliminary 

productivity data—as measured by output per hour of all persons—for the third quarter of 2003. 

The preliminary seasonally-adjusted annual rates of productivity growth in the third quarter were: 

7.4 percent in the business sector and 

8.1 percent in the nonfarm business sector. 

Productivity increased 7.4 percent in the business sector, as output grew 8.8 percent and hours 

increased 1.3 percent. The 8.1 percent increase in nonfarm business productivity also reflected 

an 8.8 percent growth in output, with a 0.7 percent rise in nonfarm business hours (table A). 

 In manufacturing, productivity increases in the third quarter were: 

8.6 percent in manufacturing, 

14.7 percent in durable goods manufacturing, and 

 2.3 percent in nondurable goods manufacturing. 

The increase in manufacturing productivity compares with a 3.1-percent rise reported for the 

previous quarter (as revised). 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. 

Revised historical measures through 2002 will be released on Jan. 7, 2004, reflecting the release 

of revised source data. For more information see “Upcoming changes” on page 5. 
2 

Table A. Productivity and costs: Preliminary third-quarter 2003 measures 

(Seasonally adjusted annual rates) 

 Sector 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

Percent change from preceding quarter 

Business 7.4 8.8 1.3 2.4 0.1 -4.6

Nonfarm business 8.1 8.8 0.7 3.1 0.8 -4.6

Manufacturing 8.6 2.9 -5.2 4.3 1.9 -4.0

 Durable 14.7 7.8 -6.0 3.7 1.4 -9.6 

 Nondurable 2.3 -1.8 -4.0 5.3 2.9 2.9 

Percent change from same quarter a year ago 

Business 4.7 4.1 -0.6 2.8 0.6 -1.8

Nonfarm business 4.7 4.1 -0.6 2.7 0.5 -1.9

Manufacturing 3.8 -1.1 -4.7 4.5 2.2 0.7

 Durable 5.6 0.1 -5.2 4.1 1.8 -1.4 

 Nondurable 1.8 -2.3 -4.0 5.2 3.0 3.3 

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 (page 7). 

Business 

From the second quarter to the third quarter of 2003, business sector productivity increased 

at a 7.4 percent annual rate. Output increased 8.8 percent, while hours of all persons engaged in 

the sector increased 1.3 percent (seasonally adjusted annual rates). The output increase was the 

largest since the fourth quarter of 1992, when output grew at a 9.3 percent annual rate. After 

revisions, productivity in the business sector also rose 7.4 percent in the second quarter of 2003, 

reflecting a 4.5-percent rise in output and a 2.7-percent decline in hours (tables B and 1). 
3 

Hourly compensation in the business sector increased at an annual rate of 2.4 percent 

during the third quarter of 2003. Revised results show that hourly compensation increased 4.1 

percent in the second quarter (seasonally adjusted annual rates). This measure includes wages 

and salaries, supplements, employer contributions to employee benefit plans, and taxes. Real 

hourly compensation, which takes into account changes in consumer prices, edged up 0.1 percent 

in the third quarter of 2003. 

Unit labor costs, which reflect changes in both hourly compensation and productivity, 

decreased at a 4.6-percent annual rate during the third quarter. These costs had decreased 3.1 

percent in the second quarter of 2003 (as revised). The implicit price deflator for the business 

sector increased 1.8 percent during the third quarter of 2003, following a 1.0 percent increase in 

the previous quarter. 

Nonfarm business 

Productivity in the nonfarm business sector grew at an 8.1-percent annual rate during the 

third quarter of 2003. Output grew 8.8 percent in the third quarter, faster than at any time since 

the fourth quarter of 1992, when it increased 9.8 percent (seasonally adjusted annual rates). 

Hours worked in the nonfarm business sector rose 0.7 percent, reflecting a 0.3-percent gain in 

employment combined with a 0.4-percent increase in average weekly hours at work. After 

revisions, nonfarm business productivity increased 7.0 percent in the second quarter of 2003, as 

output grew 4.6 percent and hours declined 2.2 percent (table 2). 

Hourly compensation increased at a 3.1 percent annual rate in the third quarter of 2003. 

When the rise in consumer prices is taken into account, real hourly compensation rose at a 0.8-

percent annual rate during the July-September period. During the second quarter of 2002, real 

hourly compensation had risen 3.0 percent. 

Unit labor costs fell 4.6 percent during the third quarter of 2003. In the second quarter, unit 

labor costs in the nonfarm business sector had decreased 3.2 percent. The implicit price deflator 

for nonfarm business output rose 1.5 percent in the third quarter of 2003. 

Manufacturing 

Productivity increased 8.6 percent in manufacturing in the third quarter of 2003, as output 

grew 2.9 percent and hours of all persons fell 5.2 percent (seasonally adjusted annual rates). 

Total manufacturing output had decreased in each of the previous three quarters. The 3.1 percent 

increase in labor productivity in the second quarter of 2003 reflected a 2.9-percent decrease in 

output and a 5.8-percent drop in hours. In durable goods, productivity grew 14.7 percent in the 

third quarter as output increased 7.8 percent and hours of all persons fell 6.0 percent. The gain in 

durable manufacturing output per hour was the largest since the first quarter of 1971, when it 

increased 15.1 percent. Productivity increased 2.3 percent in nondurable goods, as output 

declined 1.8 percent and hours of all persons fell 4.0 percent (tables 3, 4, and 5). 
4 

Hourly compensation of manufacturing workers increased an average of 4.3 percent during

the third quarter of 2003, reflecting increases of 3.7 percent in durable goods and 5.3 percent in 

nondurable goods. When the increase in consumer prices is taken into account, real hourly

compensation in total manufacturing rose 1.9 percent in the third quarter. 

Unit labor costs in manufacturing decreased 4.0 percent in the third quarter of 2003, after 

increasing 1.9 percent in the second quarter. In the durable goods sector, unit labor costs in the 

third quarter fell 9.6 percent, the largest decline in these costs since the second quarter of 2000, 

when they dropped 13.0 percent. Unit labor costs rose 2.9 percent in the nondurable goods sector 

in the third quarter of 2003, about the same as the 2.7 percent rise one quarter earlier. 

Revised Measures

Current and previous measures for the first and second quarters of 2003 for the business, 

nonfarm business, and manufacturing sectors are compared in table B. In the business and 

nonfarm business sectors, growth in output and productivity were slightly higher in the second 

quarter than reported on Sept. 4, based on information then available. In the manufacturing

sector, output declined more, and productivity increased less, than previously reported. In the 

first quarter of 2003, growth in hourly compensation in all of these sectors was revised down, 

which resulted in smaller increases in unit labor costs. 
5 

Table B. Previous and revised productivity and related measures 

Quarterly percent change at seasonally adjusted annual rate 

Sector 

Productivity Output Hours 

Hourly

compensation 

Real

hourly

compensation 

Unit 

labor 

costs 

Second quarter 2003 

Business:

 Previous ....................... 7.2 4.2 -2.7 4.3 3.7 -2.7 

 Current ......................... 7.4 4.5 -2.7 4.1 3.5 -3.1 

Nonfarm business:

 Previous ....................... 6.8 4.4 -2.3 3.8 3.2 -2.8 

 Current ......................... 7.0 4.6 -2.2 3.6 3.0 -3.2 

Manufacturing:

 Previous ....................... 3.7 -2.4 -5.9 5.2 4.6 1.5 

 Current ......................... 3.1 -2.9 -5.8 5.0 4.4 1.9 

First quarter 2003 

Business:

Previous ....................... 2.7 1.4 -1.2 4.8 0.9 2.0

Current ......................... 2.7 1.4 -1.2 3.2 -0.6 0.5

Nonfarm business:

Previous ....................... 2.1 1.4 -0.7 4.1 0.2 2.0

Current ......................... 2.1 1.4 -0.7 2.6 -1.2 0.4

Manufacturing:

 Previous ....................... 4.0 -0.7 -4.5 6.3 2.4 2.2 

 Current ......................... 4.0 -0.7 -4.5 5.4 1.5 1.3 

Revised measures: Nonfinancial Corporations 

Productivity and cost measures for nonfinancial corporations for the first and second 

quarters of 2003 also were revised to incorporate more recent information than was available on 

Sept. 4. 

Productivity grew at an annual rate of 8.4 percent in second-quarter 2003, compared with 

the increase of 8.1 percent published Sept. 4. This was largely the result of an upward revision in 

output growth from 5.9 percent to 6.3 percent. Hourly compensation was revised down slightly, 

and unit labor costs fell more, 4.3 percent, than the 3.8-percent decline reported previously. Unit 

profits grew at a 61.6 percent annual rate in the second quarter of 2003, compared with the 

preliminary estimate of 55.5 percent. Nonfinancial corporate output, productivity, and hourly

compensation grew less during the first quarter of 2003 than reported Sept. 4. Because hourly

compensation was revised down more than productivity, unit labor costs were revised down as 

well (tables C and 6). 

 
6 

Table C. Nonfinancial corporations: Previous and revised productivity and cost measures 

Quarterly percent changes at seasonally adjusted annual rates 

Productivity Output Hours

Hourly

compensation

Real

hourly

compensation

Unit 

labor 

costs

Unit 

profits

Implicit 

price 

deflator

Second quarter 2003 

Previous............ 8.1 5.9 -2.0 3.9 3.3 -3.8 55.5 -0.7

Current ............. 8.4 6.3 -1.9 3.7 3.1 -4.3 61.6 -0.5

 First quarter 2003 

Previous............ 4.3 2.8 -1.5 5.2 1.3 0.9 7.6 0.7

Current ............. 3.4 1.9 -1.5 3.8 0.0 0.4 8.5 0.7

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. 

Next release date

The next release of Productivity and Costs is scheduled for 8:30 AM EST, Wednesday, 

Dec. 3, 2003. It will present third-quarter measures for nonfinancial corporations and revised 

third-quarter measures for business, nonfarm business, and manufacturing. Historical revisions 

to selected measures for the manufacturing sector, due to incorporation of revised indexes of 

industrial production for 2001-2003, will be reported at that time. 
7 

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 annualweighted 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 annualweighted 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. 

 
8 

 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 r144.8 r113.3 r113.8 r123.0 117.2 

 II 129.5 r147.1 r113.6 r146.3 r114.2 r112.9 r125.3 r117.5 

 III 131.9 150.2 113.9 147.2 114.2 111.6 129.0 118.0 

 --------------------------------------------------------------------------------------------------------- 

 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 r3.2 r-0.6 r0.5 r3.2 1.6 

 II r7.4 r4.5 -2.7 r4.1 r3.5 r-3.1 r7.7 r1.0 

 III 7.4 8.8 1.3 2.4 0.1 -4.6 12.3 1.8 

 --------------------------------------------------------------------------------------------------------- 

 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 r2.7 r-0.1 r0.0 r2.8 1.1 

 II 4.3 3.2 -1.1 r2.8 r0.6 r-1.5 r5.5 1.1 

 III 4.7 4.1 -0.6 2.8 0.6 -1.8 6.7 1.4 

 --------------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. November 6, 2003 

 r=revised Source: Bureau of Labor Statistics 
9 

 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 r143.7 r112.4 r113.4 r125.2 117.7 

 II r128.9 r147.5 114.4 r145.0 r113.2 r112.5 r127.5 117.9 

 III 131.4 150.6 114.6 146.1 113.4 111.2 131.0 118.4 

 --------------------------------------------------------------------------------------------------------- 

 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 r2.6 r-1.2 r0.4 r2.8 1.4 

 II r7.0 r4.6 r-2.2 r3.6 r3.0 r-3.2 r7.4 r0.8 

 III 8.1 8.8 0.7 3.1 0.8 -4.6 11.6 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 r2.5 r-0.4 r-0.1 r3.1 1.1 

 II 4.1 3.2 -0.9 r2.4 r0.3 r-1.6 r5.2 0.9 

 III 4.7 4.1 -0.6 2.7 0.5 -1.9 6.4 1.3 

 --------------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. November 6, 2003 

 r=revised Source: Bureau of Labor Statistics 
10 

 Table 3. Manufacturing sector: Productivity, hourly compensation, and unit labor costs, 

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

 quarter all persons Output persons hour (1) hour (2) costs 

 -------------------------------------------------------------------------------------------------- 

 Indexes 1992=100 

 2001 I 135.2 134.9 99.8 132.0 107.5 97.6 

 II 135.8 132.8 97.8 133.6 107.9 98.4 

 III 137.8 131.1 95.1 135.0 108.8 97.9 

 IV 139.9 129.1 92.3 136.7 110.3 97.7 

 ANNUAL 137.1 132.0 96.3 134.3 108.6 97.9 

 2002 I 142.9 129.5 90.6 138.3 111.3 96.8 

 II 144.8 130.6 90.2 140.5 112.0 97.0 

 III 147.2 131.6 89.4 141.3 112.1 96.0 

 IV 147.0 130.3 88.6 142.4 112.4 96.9 

 ANNUAL 145.5 130.5 89.7 140.6 112.0 96.7 

 2003 I 148.5 130.1 87.6 r144.3 r112.9 r97.2 

 II r149.6 r129.2 86.3 r146.1 r114.1 r97.6 

 III 152.7 130.1 85.2 147.6 114.6 96.7 

 -------------------------------------------------------------------------------------------------- 

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.1 -7.6 -5.7 1.6 -2.1 3.7 

 II 1.8 -6.2 -7.9 5.0 1.7 3.1 

 III 6.1 -4.9 -10.3 4.1 3.2 -1.8 

 IV 6.0 -6.1 -11.5 5.1 5.7 -0.9 

 ANNUAL 1.6 -4.9 -6.4 2.4 -0.4 0.8 

 2002 I 9.1 1.2 -7.2 5.0 3.7 -3.8 

 II 5.5 3.5 -1.9 6.3 2.7 0.8 

 III 6.7 3.0 -3.4 2.5 0.3 -3.9 

 IV -0.4 -3.7 -3.3 3.1 1.1 3.5 

 ANNUAL 6.1 -1.1 -6.8 4.7 3.1 -1.3 

 2003 I 4.0 -0.7 -4.5 r5.4 r1.5 r1.3 

 II r3.1 r-2.9 r-5.8 r5.0 r4.4 r1.9 

 III 8.6 2.9 -5.2 4.3 1.9 -4.0 

 -------------------------------------------------------------------------------------------------- 

 Percent change from corresponding quarter of previous year 

 2001 I 1.2 -2.4 -3.6 0.5 -2.9 -0.7 

 II 0.7 -5.0 -5.7 3.4 0.0 2.7 

 III 1.8 -5.9 -7.5 2.1 -0.6 0.3 

 IV 2.9 -6.2 -8.9 3.9 2.1 1.0 

 ANNUAL 1.6 -4.9 -6.4 2.4 -0.4 0.8 

 2002 I 5.7 -4.0 -9.2 4.8 3.6 -0.9 

 II 6.7 -1.7 -7.8 5.1 3.8 -1.4 

 III 6.8 0.3 -6.1 4.7 3.1 -2.0 

 IV 5.1 1.0 -4.0 4.2 1.9 -0.9 

 ANNUAL 6.1 -1.1 -6.8 4.7 3.1 -1.3 

 2003 I 3.9 0.5 -3.3 r4.3 r1.4 r0.4 

 II r3.3 r-1.1 r-4.2 r4.0 r1.8 r0.7 

 III 3.8 -1.1 -4.7 4.5 2.2 0.7 

 -------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. November 6, 2003 

 r=revised Source: Bureau of Labor Statistics 
11 

 Table 4. Durable manufacturing sector: Productivity, hourly compensation, and unit labor costs, 

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

 quarter all persons Output persons hour (1) hour (2) costs 

 -------------------------------------------------------------------------------------------------- 

 Indexes 1992=100 

 2001 I 149.3 158.3 106.0 129.4 105.3 86.6 

 II 149.7 154.9 103.5 131.3 106.1 87.7 

 III 151.7 151.8 100.1 132.0 106.4 87.0 

 IV 153.7 148.6 96.7 134.3 108.4 87.4 

 ANNUAL 151.0 153.4 101.5 131.7 106.5 87.2 

 2002 I 158.1 149.4 94.5 135.6 109.1 85.8 

 II 160.7 151.2 94.1 138.2 110.3 86.0 

 III 163.9 152.6 93.1 138.8 110.1 84.7 

 IV 164.5 151.5 92.0 140.0 110.5 85.1 

 ANNUAL 161.8 151.2 93.4 138.1 110.0 85.4 

 2003 I 165.9 151.3 91.2 r141.5 r110.6 r85.3 

 II r167.2 r149.9 r89.7 r143.1 r111.7 r85.6 

 III 173.0 152.8 88.3 144.4 112.1 83.5 

 -------------------------------------------------------------------------------------------------- 

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.0 -8.9 -7.0 3.1 -0.6 5.2 

 II 1.0 -8.2 -9.1 6.2 2.9 5.1 

 III 5.4 -7.9 -12.6 2.0 1.1 -3.3 

 IV 5.5 -8.0 -12.8 7.2 7.8 1.6 

 ANNUAL 0.9 -6.3 -7.1 1.8 -0.9 0.9 

 2002 I 11.9 2.1 -8.7 3.9 2.6 -7.1 

 II 6.7 4.9 -1.7 8.1 4.4 1.2 

 III 8.3 3.8 -4.2 1.6 -0.5 -6.2 

 IV 1.5 -2.9 -4.4 3.5 1.5 2.0 

 ANNUAL 7.1 -1.5 -8.0 4.9 3.3 -2.1 

 2003 I 3.4 -0.5 -3.8 r4.4 r0.5 r0.9 

 II r3.1 r-3.5 r-6.4 r4.6 r4.0 1.4 

 III 14.7 7.8 -6.0 3.7 1.4 -9.6 

 -------------------------------------------------------------------------------------------------- 

 Percent change from corresponding quarter of previous year 

 2001 I 0.5 -2.9 -3.3 -1.1 -4.3 -1.6 

 II -0.2 -6.3 -6.1 3.0 -0.4 3.2 

 III 0.9 -7.8 -8.6 1.1 -1.6 0.2 

 IV 2.4 -8.2 -10.4 4.6 2.7 2.1 

 ANNUAL 0.9 -6.3 -7.1 1.8 -0.9 0.9 

 2002 I 5.9 -5.6 -10.8 4.8 3.6 -1.0 

 II 7.3 -2.4 -9.1 5.3 3.9 -1.9 

 III 8.1 0.5 -7.0 5.2 3.5 -2.7 

 IV 7.0 1.9 -4.8 4.2 2.0 -2.6 

 ANNUAL 7.1 -1.5 -8.0 4.9 3.3 -2.1 

 2003 I 5.0 1.3 -3.5 r4.4 r1.4 r-0.6 

 II r4.1 -0.8 -4.7 r3.5 r1.3 r-0.5 

 III 5.6 0.1 -5.2 4.1 1.8 -1.4 

 -------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. November 6, 2003 

 r=revised Source: Bureau of Labor Statistics 
12 

 Table 5. Nondurable manufacturing sector: Productivity, hourly compensation, and unit labor costs, 

 seasonally adjusted 

 Real 

 Year Output per Hours Compensa- compensa- Unit 

 and hour of of all tion per tion per labor 

 quarter all persons Output persons hour (1) hour (2) costs 

 -------------------------------------------------------------------------------------------------- 

 Indexes 1992=100 

 2001 I 123.1 112.7 91.6 134.7 109.7 109.4 

 II 123.8 111.7 90.2 135.8 109.7 109.7 

 III 125.6 111.3 88.6 138.6 111.7 110.3 

 IV 127.4 110.1 86.4 139.2 112.4 109.3 

 ANNUAL 125.0 111.5 89.2 137.0 110.8 109.7 

 2002 I 129.1 110.2 85.4 141.6 113.9 109.7 

 II 130.4 110.8 84.9 142.9 113.9 109.5 

 III 131.9 111.4 84.4 144.3 114.5 109.4 

 IV 130.9 110.1 84.1 145.3 114.7 111.0 

 ANNUAL 130.6 110.6 84.7 143.5 114.3 109.9 

 2003 I 132.5 109.9 82.9 r147.8 r115.5 r111.5 

 II r133.5 109.4 81.9 r149.9 r117.0 112.2 

 III 134.3 108.9 81.1 151.8 117.9 113.1 

 -------------------------------------------------------------------------------------------------- 

 Percent change from previous quarter at annual rate(5) 

 2001 I -2.5 -6.0 -3.6 -0.8 -4.4 1.8 

 II 2.3 -3.8 -5.9 3.3 0.0 1.0 

 III 5.8 -1.4 -6.7 8.4 7.4 2.5 

 IV 6.0 -4.0 -9.4 1.9 2.5 -3.8 

 ANNUAL 2.3 -3.2 -5.3 3.6 0.8 1.3 

 2002 I 5.4 0.3 -4.9 7.1 5.8 1.6 

 II 4.2 1.9 -2.1 3.5 0.0 -0.6 

 III 4.6 2.3 -2.2 4.2 2.0 -0.4 

 IV -3.1 -4.6 -1.6 2.6 0.6 5.9 

 ANNUAL 4.5 -0.8 -5.0 4.7 3.1 0.2 

 2003 I 5.2 -0.6 -5.5 r7.0 r3.1 r1.7 

 II r3.1 r-1.9 -4.9 5.9 5.3 r2.7 

 III 2.3 -1.8 -4.0 5.3 2.9 2.9 

 -------------------------------------------------------------------------------------------------- 

 Percent change from corresponding quarter of previous year 

 2001 I 2.1 -1.9 -3.9 3.1 -0.3 1.0 

 II 1.7 -3.4 -5.1 4.1 0.7 2.4 

 III 2.5 -3.5 -5.9 4.1 1.3 1.5 

 IV 2.8 -3.8 -6.4 3.1 1.3 0.3 

 ANNUAL 2.3 -3.2 -5.3 3.6 0.8 1.3 

 2002 I 4.8 -2.2 -6.7 5.1 3.9 0.3 

 II 5.3 -0.8 -5.8 5.2 3.9 -0.1 

 III 5.0 0.1 -4.7 4.2 2.5 -0.8 

 IV 2.7 -0.1 -2.7 4.3 2.1 1.6 

 ANNUAL 4.5 -0.8 -5.0 4.7 3.1 0.2 

 2003 I 2.7 -0.3 -2.9 r4.3 r1.4 r1.6 

 II r2.4 r-1.3 -3.6 r4.9 r2.7 2.5 

 III 1.8 -2.3 -4.0 5.2 3.0 3.3 

 -------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. November 6, 2003 

 r=revised Source: Bureau of Labor Statistics 
13 

 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 r131.0 r155.2 118.4 r140.5 r109.9 r107.2 r114.9 109.3 r112.4 109.6 

 II r133.7 r157.6 r117.9 r141.8 r110.7 r106.1 r112.6 r107.8 r126.8 109.4 

 ---------------------------------------------------------------------------------------------------------- 

 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 r3.4 r1.9 -1.5 r3.8 r0.0 r0.4 r-1.0 r0.0 r8.5 0.7 

 II r8.4 r6.3 r-1.9 r3.7 r3.1 r-4.3 r-7.9 r-5.3 r61.6 r-0.5 

 ---------------------------------------------------------------------------------------------------------- 

 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 r4.0 r2.9 -1.1 r3.4 r0.5 r-0.6 r0.8 -0.2 r4.5 0.2 

 II r4.7 r3.1 -1.5 r3.2 r1.1 r-1.4 r-1.7 r-1.5 r17.6 0.1 

 ---------------------------------------------------------------------------------------------------------- 

 See footnotes following Table 6. November 6, 2003 

 r=revised Source: Bureau of Labor Statistics 
14 

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 selfemployed, 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.