USDL 05-2116
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 8:30 A.M. EST,
THURSDAY, NOVEMBER 3, 2005

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                           PRODUCTIVITY AND COSTS
                       Third Quarter 2005, preliminary


     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 2005.  The preliminary seasonally-adjusted
annual rates of productivity growth in the third quarter were:


               4.8 percent in the business sector and
               4.1 percent in the nonfarm business sector.
               

Productivity increased 4.8 percent in the business sector, as output grew 4.3
percent and hours declined 0.4 percent.  The 4.1-percent rise in nonfarm
business productivity occurred as output rose 4.2 percent and hours rose 0.1
percent (table A).

     The effects of Hurricanes Katrina and Rita, which struck the Gulf Coast
during the third quarter, could not be separately identified in the
productivity and costs measures.  The measures reported in this news release
reflect both these effects and ongoing trends in ouput, hours, and
compensation.

     In manufacturing, productivity increases in the third quarter were:


               4.5 percent in manufacturing,
               7.5 percent in durable goods manufacturing, and
               1.7 percent in nondurable goods manufacturing.
               

The third-quarter increase in manufacturing productivity followed a 3.6-
percent increase in the second quarter of 2005.  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.  Third-quarter measures are
summarized in table A and appear in detail in tables 1 through 5.

     The data sources and methods used in the preparation of the
manufacturing series differ from those used in preparing the business and
nonfarm business series, and these measures are not directly comparable.
Output measures for business and nonfarm business are based on measures of
gross domestic product prepared by the Bureau of Economic Analysis of the
U.S. Department of Commerce.  Quarterly output measures for manufacturing
reflect indexes of industrial production independently prepared by the Board
of Governors of the Federal Reserve System.  See Technical Notes for further
information on data sources.

------------------------------------------------------------------------------
Table A. Productivity and costs: Preliminary third-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            4.8       4.3      -0.4     4.2      -0.9      -0.6
 Nonfarm business    4.1       4.2       0.1     3.6      -1.4      -0.5
 Manufacturing       4.5       3.1      -1.4     2.9      -2.1      -1.6
   Durable           7.5       7.5       0.0     2.4      -2.6      -4.7
   Nondurable        1.7      -2.1      -3.7     3.4      -1.7       1.7
------------------------------------------------------------------------------

                      Percent change from same quarter a year ago
                      
 Business            2.9       4.1       1.1     5.8       1.9       2.8
 Nonfarm business    3.0       4.2       1.2     5.8       1.9       2.7
 Manufacturing       4.7       3.1      -1.5     7.2       3.3       2.5
  Durable            6.0       5.2      -0.8     6.8       2.9       0.7
  Nondurable         3.3       0.5      -2.7     7.8       3.9       4.4
------------------------------------------------------------------------------  


Business


     From the second quarter to the third quarter of 2005, productivity in
the business sector grew at a 4.8 percent seasonally adjusted annual rate.
Output increased 4.3 percent, while hours of all persons engaged in the
sector declined 0.4 percent.  The third-quarter productivity  increase  was
much faster than the 0.8-percent gain recorded in the second quarter of 2005
(as revised), which reflected a  4.0-percent rise in output and a 3.1-percent
rise in hours. (tables B and 1).
     
     Hourly compensation in the business sector increased at an annual rate
of 4.2 percent during the third quarter of 2005, faster than the 3.0-percent
rise one quarter earlier ( as revised). 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, fell by 0.9 percent in the third quarter of 2005 after
falling by 1.1 percent in the second quarter.  It had increased 2.3 percent
in the first quarter of the year.

     Unit labor costs, which reflect changes in both hourly compensation and
productivity, declined 0.6 percent during the third quarter.  By contrast,
this measure had increased 2.2 percent in the second quarter.  The implicit
price deflator for the business sector increased 3.0 percent during the third
quarter of 2005, following a 2.6 percent increase in the previous quarter.


Nonfarm business


     Productivity in the nonfarm business sector grew 4.1 percent during the
third quarter of 2005 as output grew 4.2 percent.  Hours of all persons in
the nonfarm business sector edged up 0.1 percent, reflecting a 0.4-percent
gain in employment and a 0.4-percent decline in average weekly hours at work.
In the previous quarter, nonfarm business productivity increased 2.1 percent,
as output grew 4.4 percent and hours worked increased by 2.2 percent (table
2).

     Hourly compensation increased at a 3.6 percent annual rate in the third
quarter of 2005. When the rise in consumer prices is taken into account, real
hourly compensation fell 1.4 percent during the July-September period.
During the second quarter of 2005, real hourly compensation had declined 0.1
percent.
     
     Unit labor costs in the nonfarm business sector fell 0.5 percent during
the third quarter of 2005, after rising 1.8 percent in the second quarter.
The implicit price deflator for nonfarm business output rose 3.3 percent in
the third quarter of 2005.


Manufacturing


     Productivity increased 4.5 percent in manufacturing in the third quarter
of 2005 as output grew 3.1 percent and hours of all persons fell 1.4 percent
(seasonally adjusted annual rates).  In durable goods industries,
productivity and output both grew 7.5 percent in the third quarter while
hours of all persons were unchanged.  Productivity increased 1.7 percent in
nondurable goods, where output fell 2.1 percent but hours fell faster, 3.7
percent (tables 3, 4, and 5).

     The hourly compensation of manufacturing workers increased an average of
2.9 percent during the third quarter of 2005, reflecting increases of 2.4
percent in durable goods and 3.4 percent in nondurable goods.  When the
increase in consumer prices is taken into account, real hourly compensation
in total manufacturing fell 2.1 percent in the third quarter.  Real hourly
compensation had grown in the first two quarters of 2005; 3.6 percent in the
second quarter (as revised) and 4.6 percent in the first quarter.

     Unit labor costs in manufacturing fell 1.6 percent in the third quarter
of 2005, after rising  in each of the previous four quarters.  In the durable
goods sector, unit labor costs fell 4.7 percent in the third quarter after
increasing 4.0 percent one quarter earlier.  In the nondurable goods sector,
unit labor costs rose 1.7 percent in the third quarter and 4.0 percent in the
second quarter of 2005.


Revised Measures


     Revised and previous measures for the second quarter of 2005 for the
business, nonfarm business, and manufacturing sectors are compared in table
B.  Hours data for the second quarter now reflect more current data on the
ratio of hours worked to hours paid in private nonfarm businesses.

------------------------------------------------------------------------------
Table B. 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
------------------------------------------------------------------------------ 

                                   Second quarter 2005
Business:                                                       
  Previous........        0.7      4.0      3.2     3.3     -0.8      2.6
  Revised.........        0.8      4.0      3.1     3.0     -1.1      2.2
  
Nonfarm business:                                               
  Previous........        1.8      4.1      2.2     4.4      0.2      2.5
  Revised.........        2.1      4.4      2.2     4.0     -0.1      1.8
  
Manufacturing:                                                  
  Previous........        3.6      0.8     -2.7     8.4      4.1      4.7
  Revised.........        3.6      0.9     -2.6     7.9      3.6      4.2
------------------------------------------------------------------------------  
     
     
     In the business sector, productivity, output, and hours grew about the
same as reported on Sept. 7, based on information then available.    In the
nonfarm sector, growth in productivity and output was revised up while the
increase in hours remained the same.  Productivity was unchanged in the
manufacturing sector, reflecting offsetting small upward revisions to output
and hours.  In all three sectors, hourly compensation and unit labor costs
were revised down.


Revised measures: Nonfinancial Corporations

     
     Productivity and cost measures for nonfinancial corporations for the
second quarter of 2005 also were revised to incorporate more recent
information than was available on Sept. 7.

------------------------------------------------------------------------------
Table C.  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
 ----------------------------------------------------------------------------- 
 
                            Second quarter 2005
                            
Previous    6.8      9.5     2.6    4.0      -0.1     -2.6    43.2     1.3
Revised     6.3      9.0     2.6    3.7      -0.5     -2.4    41.7     1.4
------------------------------------------------------------------------------     
     
     Productivity grew at an annual rate of 6.3 percent in second-quarter
2005, compared with the increase of 6.8 percent reported previously.  This
was the result of a downward revision in output growth, from 9.5 percent to
9.0 percent, as hours growth was unchanged.  Unit labor costs fell more
slowly than reported previously, as hourly compensation was revised down less
than productivity.  Unit profits increased slightly less than reported on
Sept. 7. (tables C and 6).
                                      
                                      
                              Next release date
     
     The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Tuesday, Dec. 6, 2005.  It will present third-quarter measures for
nonfinancial corporations and revised third-quarter measures for business,
nonfarm business, and manufacturing.
     
     
     
     
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  em
ployment  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.
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 enter
prises 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 exclusions 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  manufac-
turing;  computer and electronic product manufacturing; electrical  equipment
and   appliance   manufacturing;  transportation   equipment   manufacturing;
furniture and related product manufacturing; and miscellaneous manufacturing.
Nondurables include: food manufacturing; beverage and tobacco product manufac-
turing;  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  manu-
facturing; 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     164.4       122.5      121.5       123.6      122.3
            II     135.5      160.4     118.4    r165.6      r122.1     r122.2      r124.7     r123.1
           III     137.1      162.2     118.2     167.3       121.9      122.0       127.4      124.0
  ---------------------------------------------------------------------------------------------------------
                       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       4.7         2.3        1.7         4.4        2.7
            II      r0.8        4.0      r3.1      r3.0       r-1.1       r2.2        r3.4       r2.6
           III       4.8        4.3      -0.4       4.2        -0.9       -0.6         9.2        3.0
  ---------------------------------------------------------------------------------------------------------
                      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       6.4         3.3        3.6         0.5        2.4
            II      r2.1        4.1       2.0      r6.3        r3.3       r4.2       r-1.1        2.1
           III       2.9        4.1       1.1       5.8         1.9        2.8         2.6        2.7
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 3, 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     163.2       121.6      121.3       125.0      122.7
            II    r135.3     r161.2     119.2    r164.8      r121.6     r121.9      r126.3     r123.5
           III     136.6      162.8     119.2     166.3       121.1      121.7       129.3      124.5
  ---------------------------------------------------------------------------------------------------------
                       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       5.5         3.1        2.2         4.4        3.0
            II      r2.1       r4.4       2.2      r4.0       r-0.1       r1.8        r4.0       r2.7
           III       4.1        4.2       0.1       3.6        -1.4       -0.5         9.9        3.3
  ---------------------------------------------------------------------------------------------------------
                      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       6.3         3.3        3.4         1.2        2.6
            II      r2.3       r4.3       2.0      r6.4        r3.4       r4.1       r-0.2        2.4
           III       3.0        4.2       1.2       5.8         1.9        2.7         3.2        2.9
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       November 3, 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        172.2          128.3         102.4
            II            169.7       r142.6         84.0       r175.6         r129.5        r103.4
           III            171.6        143.7         83.7        176.8          128.8         103.0
  --------------------------------------------------------------------------------------------------
                         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            4.6           2.8
            II              3.6         r0.9        r-2.6         r7.9           r3.6          r4.2
           III              4.5          3.1         -1.4          2.9           -2.1          -1.6
  --------------------------------------------------------------------------------------------------
                     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              4.6          3.3        r-1.2         r9.0           r5.9          r4.2
           III              4.7          3.1         -1.5          7.2            3.3           2.5
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 3, 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        169.0          125.9          86.2
            II           r197.8       r175.1         88.5       r172.1         r127.0         r87.0
           III            201.4        178.3         88.5        173.2          126.2          86.0
  --------------------------------------------------------------------------------------------------
                         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          7.5            5.1           1.7
            II             r3.5         r1.8        r-1.7         r7.6           r3.3          r4.0
           III              7.5          7.5          0.0          2.4           -2.6          -4.7
  --------------------------------------------------------------------------------------------------
                     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            5.5           2.2
            II              5.3         r4.8         -0.5         r8.8           r5.7          r3.3
           III              6.0          5.2         -0.8          6.8            2.9           0.7
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 3, 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          131.3         124.9
            II           r142.5       r110.1         77.3       r179.7          132.6         126.1
           III            143.1        109.6         76.5        181.2          132.0         126.6
  --------------------------------------------------------------------------------------------------
                         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          6.1            3.7           3.5
            II             r4.2        r-0.3        r-4.3         r8.3           r4.0           4.0
           III              1.7         -2.1         -3.7          3.4           -1.7           1.7
  --------------------------------------------------------------------------------------------------
                     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          7.4            4.3           2.4
            II              4.1         r1.4         -2.5         r9.1           r6.0          r4.8
           III              3.3          0.5         -2.7          7.8            3.9           4.4
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                November 3, 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    143.2    170.3     118.9    160.3     119.4     111.9    108.2    110.9    145.6    114.0
            II   r145.4   r174.1     119.7   r161.7    r119.3     111.2   r106.8   r110.0   r158.8   r114.4
  ----------------------------------------------------------------------------------------------------------
                             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      2.7      3.3       0.5      5.9       3.5       3.1     -2.5      1.6      7.1      2.2
            II     r6.3     r9.0       2.6     r3.7     r-0.5     r-2.4    r-4.8    r-3.1    r41.7     r1.4
  ----------------------------------------------------------------------------------------------------------
                          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      5.2      6.4       1.2      6.6       3.5       1.3     -2.9      0.2     11.8      1.4
            II     r6.2     r7.9       1.6     r6.6       3.6      r0.4    r-4.2     -0.9    r14.6      0.8
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        November 3, 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 second 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.