USDL 04-2461
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 8:30 A.M. EST,
TUESDAY, DECEMBER 7, 2004.

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  information:         (202) 691-5606      
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                           PRODUCTIVITY AND COSTS
                         Third Quarter 2004, 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 third quarter of 2004.  The seasonally adjusted annual rates
of productivity growth in the third quarter were:

               2.4 percent in the business sector, and
               1.8 percent in the nonfarm business sector.

In both sectors, changes in productivity are similar to the preliminary
estimates published November 4. Output and hours were revised upwards in both
sectors.

     In manufacturing, revised productivity increases in the third quarter
were:

               4.6 percent in manufacturing,
               4.8 percent in durable goods manufacturing, and
               5.4 percent in nondurable goods manufacturing.

   Productivity in the manufacturing sector rose more rapidly than was
reported on Nov. 4.  Both output and hours were revised up with the revisions
to output larger than those to hours.  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: Revised third-quarter 2004 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             2.4      4.5     2.0     4.0       2.1       1.5
Nonfarm business     1.8      4.2     2.4     3.6       1.8       1.8
Manufacturing        4.6      4.5    -0.1     4.6       2.7       0.0
  Durable            4.8      6.4     1.6     4.0       2.1      -0.8
  Nondurable         5.4      2.4    -2.8     5.4       3.5       0.0
---------------------------------------------------------------------  
                      Percent change from same quarter a year ago
Business             2.9      4.4     1.5     4.0       1.2       1.1
Nonfarm business     3.1      4.7     1.5     4.0       1.2       0.8
Manufacturing        4.7      5.9     1.2     3.2       0.4      -1.5
  Durable            5.2      8.0     2.7     2.3      -0.5      -2.8
  Nondurable         4.7      3.4    -1.3     4.5       1.7      -0.2
---------------------------------------------------------------------  


Business

     From the second quarter to the third quarter of 2004, business sector
productivity rose at an annual rate of 2.4 percent, as output increased 4.5
percent and hours of all persons engaged in the sector rose 2.0 percent
(table 1).  The hours increase was the largest since a 2.4-percent rise in
the third quarter of 1999.  Output per hour had increased 2.9 percent in the
second quarter.

     Business sector hourly compensation increased 4.0 percent during the
third quarter of 2004, following a 5.2-percent increase in the second quarter
(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, rose 2.1
percent in the third quarter of 2004.

   Unit labor costs increased 1.5 percent in the third quarter of 2004, less
than the 2.3-percent rise in the second quarter.  The implicit price deflator
for the business sector, which reflects changes both in unit labor costs and
in unit nonlabor payments, rose at a 0.9 percent annual rate in the third
quarter of 2004.

Nonfarm business

     Output per hour of all persons in the nonfarm business sector rose 1.8
percent during the third quarter of 2004, as output grew 4.2 percent and
hours of all persons increased 2.4 percent (table 2).  Output had also
increased 4.2 percent in the second quarter, but because hours rose less, 0.3
percent, nonfarm productivity increased more, 3.9 percent.  The 2.4-percent
increase in hours was the largest since the third quarter of 1999, when they
increased 2.6 percent.

     Hourly compensation grew 3.6 percent in the third quarter of 2004, less
than the 5.9-percent increase in the previous quarter.  When the rise in
consumer prices is taken into account, real hourly compensation rose 1.8
percent in the third quarter of 2004.

   Unit labor costs rose 1.8 percent in the third quarter, similar to the
previous quarter, when they rose 1.9 percent.  The implicit price deflator
for nonfarm business increased 1.6 percent in the third quarter of 2004.

Manufacturing

     Productivity increased 4.6 percent in manufacturing in the third quarter
of 2004, as output increased 4.5 percent and hours of all persons edged down
0.1 percent (seasonally adjusted annual rates).  In durable goods industries,
productivity increased 4.8 percent, reflecting increases of 6.4 percent in
output and 1.6 percent in hours.  Productivity increased slightly more in the
nondurable goods industries, 5.4 percent, as output rose 2.4 percent and
hours fell 2.8 percent (tables 3, 4, and 5).

     The hourly compensation of all manufacturing workers rose 4.6 percent
during the third quarter of 2004.  In durable goods manufacturing, hourly
compensation increased 4.0 percent and in nondurable goods manufacturing it
grew 5.4 percent.  When the increase in consumer prices is taken into
account, real hourly compensation for all manufacturing workers rose 2.7
percent in the third quarter.

     Unit labor costs in manufacturing remained unchanged in the third
quarter after falling 1.4 percent in the previous quarter.  Unit labor costs
declined 0.8 percent in durable goods manufacturing in the third quarter, and
were unchanged in nondurable goods manufacturing.

Nonfinancial Corporations

     Third-quarter 2004 measures of productivity and costs also were released
for nonfinancial corporations (tables B and 6).  Output per all-employee hour
grew at a 4.2 percent annual rate, faster than the 3.3 percent increase in
the previous quarter.  Output increased 5.6 percent in the third quarter, and
hours of all employees rose 1.3 percent (seasonally adjusted annual rates).
The nonfinancial corporate sector includes all corporations doing business in
the United States, except those classified as depository institutions,
nondepository institutions, security and commodity brokers, insurance
carriers, regulated investment offices, small business investment offices,
and real estate investment trusts.


----------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Third-quarter 2004
productivity and cost measures
(Seasonally adjusted annual rates)
----------------------------------------------------------------------------                                                           
                                           Real                     
                                 Hourly    hourly  Unit             Implicit
         Produc-                 compen-   compen- labor   Unit     price
Period   tivity   Output  Hours  sation    sation  costs   profits  deflator
----------------------------------------------------------------------------                                                                    
                 Percent change from preceding quarter
2003 III  4.2      5.6     1.3    4.0       2.1     -0.3     0.9     0.3
----------------------------------------------------------------------------
                 Percent change from same quarter a year ago
2003 III  3.1      4.8     1.7    4.0       1.2      0.8    13.5     1.6
----------------------------------------------------------------------------
     
     
     Hourly compensation in nonfinancial corporations increased 4.0 percent
in the third quarter, down from the second quarter increase of 5.5 percent.
When the rise in consumer prices is taken into account, real hourly
compensation increased 2.1 percent in the third quarter.

     Unit labor costs for the sector declined 0.3 percent in third quarter
2004. Unit nonlabor costs rose 1.4 percent, while unit profits rose at a 0.9
percent annual rate in the third quarter.  As a result of these movements,
the implicit price deflator for the output of nonfinancial corporations--
which reflects a weighted average of these three measures--increased 0.3
percent.

Revised Measures

     Current and previous measures for the second and third quarters of 2004
for the business, nonfarm business, and manufacturing sectors are compared in
table C.  In the third quarter, business sector productivity growth was
revised up 0.1 percentage point when output was revised up more than hours.
Conversely, productivity was revised down in the nonfarm business sector, as
output was revised up less than hours.  Unit labor costs in the business
sector showed the same 1.5 percent increase in the third quarter as reported
previously, while unit labor costs in nonfarm business rose slightly faster
than reported on Nov. 4.  In manufacturing, an upward revision to output
raised the third-quarter gain in productivity to 4.6 percent.  Because the
revision to productivity was largely offset by an upward revision to hourly
compensation, unit labor costs were revised only slightly, and now show no
change from the previous quarter.


---------------------------------------------------------------------
Table C. Previous and revised productivity and related measures:
Quarterly percent change at seasonally adjusted annual rate
---------------------------------------------------------------------                                                          
                                                      Real      
                                             Hourly   hourly    Unit
                   Produc-                   compen-  compen-   labor
Sector             tivity   Output   Hours   sation   sation    costs
---------------------------------------------------------------------                                                                
                          Third quarter 2004
Business:                                                       
  Previous          2.3      4.2      1.9     3.8      2.0       1.5
  Revised           2.4      4.5      2.0     4.0      2.1       1.5
Nonfarm business:                                               
  Previous          1.9      4.1      2.1     3.6      1.7       1.6
  Revised           1.8      4.2      2.4     3.6      1.8       1.8
Manufacturing:                                                  
  Previous          4.3      4.0     -0.3     4.4      2.5       0.1
  Revised           4.6      4.5     -0.1     4.6      2.7       0.0
---------------------------------------------------------------------  
                          Second quarter 2004
Business:                                                       
  Previous          2.9      3.9      1.0     4.3     -0.4       1.4
  Revised           2.9      3.9      1.0     5.2      0.5       2.3
Nonfarm business:                                               
  Previous          3.9      4.2      0.3     4.9      0.2       1.0
  Revised           3.9      4.2      0.3     5.9      1.1       1.9
Manufacturing:                                                  
  Previous          8.3      6.7     -1.4     3.8     -0.9      -4.2
  Revised           8.3      6.7     -1.4     6.8      2.0      -1.4
---------------------------------------------------------------------  
     
     
     The second-quarter 2004 measures of hourly compensation, real hourly
compensation, and unit labor costs were revised to reflect new information on
compensation.  In the business and nonfarm business sectors, hourly
compensation and unit labor costs show larger increases than previously
reported; real hourly compensation rose instead of fell in the business
sector.  In manufacturing, hourly compensation increased sharply in the
second quarter, and real hourly compensation rose rather than fell, after
revision.  Manufacturing unit labor costs decreased less during the second
quarter of 2004 than previously reported.

Revised measures: Nonfinancial corporations
     
     Measures for the nonfinancial corporate sector also were revised to
reflect updated information on output and employee compensation during the
second quarter of 2004 (table D).  With hours unchanged, productivity was
revised upwards along with output.  An upward revision to compensation
implied larger increases in hourly compensation and real hourly compensation.
Because the revision to compensation was greater than to output, unit labor
costs increased more in the second quarter than previously reported.


-----------------------------------------------------------------------------
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
-----------------------------------------------------------------------------                                                                     
                            Second quarter 2004
Previous     2.7      3.7     0.9    4.7      0.0     1.9    21.7     3.8
Revised      3.3      4.2     0.9    5.5      0.7     2.2    21.1     3.8
-----------------------------------------------------------------------------


                        Upcoming change

    Early in 2005, BLS will improve the way it uses data for farm workers,
the nonfarm self employed, and nonfarm unpaid family workers in the
productivity program by accounting for the effects of multiple jobholding.

                                      
                                      
                              NEXT RELEASE DATE
                                      
    The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Thursday, February 5, 2005.  Preliminary fourth-quarter and annual 2004
measures will be released at that time.  Quarterly measures for the
manufacturing sector will reflect the annual revision to the index of
industrial production.

     Scheduled release dates for productivity and costs measures for major
sectors of the U.S. economy in 2005 are:


     ----------------------------------------------------
     Reference period                   2005 release date
     
     2004:                         
     Fourth quarter, Annual             February 3
     Fourth quarter, Annual(revised)    March 3
     
     2005:                         
     First quarter                      May 5
     First quarter (revised)            June 2
     Second quarter                     August 9
     Second quarter (revised)           September 7
     Third quarter                      November 3
     Third quarter (revised)            December 6
     ----------------------------------------------------


     These dates are based on presently available schedules for the release
of underlying source data in 2005.  Each issue of Productivity and Costs
contains a "Next release date" paragraph that readers should use to confirm
the dates above.


                                      
                               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

  2002       I     122.7      142.2     115.9     143.2       115.2      116.7       113.4      115.5
            II     123.2      142.9     116.0     144.4       115.2      117.2       113.6      115.9
           III     124.7      144.3     115.7     145.0       115.0      116.3       115.7      116.1
            IV     125.0      144.7     115.7     145.5       114.8      116.3       116.8      116.5

        ANNUAL     123.9      143.5     115.8     144.5       115.0      116.6       114.9      116.0

  2003       I     126.2      145.5     115.3     147.4       115.3      116.8       117.7      117.1
            II     128.6      147.5     114.7     149.6       116.8      116.4       119.0      117.3
           III     131.2      150.8     114.9     151.7       117.7      115.6       120.8      117.5
            IV     132.0      152.3     115.4     153.2       118.7      116.0       120.7      117.8

        ANNUAL     129.5      149.0     115.1     150.5       117.1      116.2       119.6      117.4

  2004       I     133.3      154.3     115.8     154.2       118.4      115.7       122.9      118.4
            II     134.2      155.8     116.1    r156.2      r118.6     r116.4      r124.4      119.4
           III     135.0     r157.5     116.6    r157.7      r119.2     r116.8      r124.3      119.6
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2002       I       5.9        3.5      -2.3       4.9         3.5       -1.0         1.0       -0.3
            II       1.7        2.1       0.4       3.4        -0.1        1.7         1.0        1.4
           III       4.8        3.8      -1.0       1.6        -0.7       -3.1         7.3        0.7
            IV       1.2        1.2       0.0       1.3        -0.6        0.0         3.8        1.4

        ANNUAL       4.3        1.8      -2.4       3.2         1.5       -1.1         4.5        0.9

  2003       I       3.9        2.2      -1.6       5.5         1.7        1.6         3.1        2.1
            II       7.6        5.6      -1.9       6.1         5.4       -1.4         4.5        0.8
           III       8.5        9.3       0.7       5.6         3.1       -2.6         6.3        0.7
            IV       2.4        4.2       1.7       4.0         3.3        1.6        -0.4        0.8

        ANNUAL       4.5        3.8      -0.7       4.1         1.8       -0.4         4.1        1.3

  2004       I       3.9        5.3       1.3       2.8        -0.8       -1.1         7.4        2.1
            II       2.9        3.9       1.0      r5.2        r0.5       r2.3        r5.0        3.3
           III      r2.4       r4.5      r2.0      r4.0        r2.1        1.5         0.0        0.9
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2002       I       4.9        0.8      -3.9       3.2         1.9       -1.6         6.6        1.2
            II       4.0        1.1      -2.8       3.4         2.1       -0.6         3.5        0.9
           III       4.9        2.8      -2.0       3.3         1.6       -1.6         5.0        0.8
            IV       3.4        2.7      -0.7       2.8         0.5       -0.6         3.2        0.8

        ANNUAL       4.3        1.8      -2.4       3.2         1.5       -1.1         4.5        0.9

  2003       I       2.9        2.3      -0.6       2.9         0.1        0.0         3.8        1.4
            II       4.4        3.2      -1.1       3.6         1.4       -0.7         4.7        1.3
           III       5.3        4.5      -0.7       4.6         2.4       -0.6         4.4        1.3
            IV       5.6        5.3      -0.3       5.3         3.4       -0.3         3.4        1.1

        ANNUAL       4.5        3.8      -0.7       4.1         1.8       -0.4         4.1        1.3

  2004       I       5.6        6.1       0.5       4.6         2.7       -0.9         4.4        1.1
            II       4.4        5.6       1.2      r4.4        r1.5       r0.0        r4.5        1.7
           III       2.9        4.4       1.5      r4.0        r1.2       r1.1        r2.9        1.8
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       December 7, 2004 
  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

  2002       I     122.4      142.6     116.5     142.6       114.7      116.4       115.1      116.0
            II     122.8      143.2     116.7     143.8       114.7      117.1       115.4      116.5
           III     124.1      144.5     116.4     144.3       114.4      116.2       117.7      116.8
            IV     124.6      145.0     116.4     144.7       114.3      116.1       118.9      117.2

        ANNUAL     123.5      143.9     116.5     143.8       114.5      116.5       116.8      116.6

  2003       I     125.8      145.9     116.0     146.6       114.7      116.6       119.6      117.7
            II     127.8      147.8     115.6     148.7       116.1      116.3       120.4      117.8
           III     130.6      151.1     115.7     150.9       117.1      115.5       122.3      118.0
            IV     131.7      152.8     116.1     152.5       118.2      115.9       121.9      118.1

        ANNUAL     129.0      149.4     115.8     149.7       116.5      116.1       121.1      117.9

  2004       I     132.8      155.0     116.7     153.3       117.7      115.4       124.3      118.7
            II     134.1      156.5     116.7    r155.5      r118.0     r115.9      r125.7      119.6
           III     134.7     r158.2     117.4    r156.9      r118.5     r116.5      r126.0      120.0
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2002       I       6.9        4.0      -2.7       5.5         4.1       -1.4         1.6       -0.3
            II       1.1        1.7       0.6       3.4        -0.1        2.3         1.0        1.8
           III       4.5        3.6      -0.9       1.5        -0.8       -2.9         8.0        1.0
            IV       1.6        1.4      -0.2       1.2        -0.6       -0.3         4.2        1.3

        ANNUAL       4.4        1.8      -2.5       3.3         1.6       -1.1         4.7        1.0

  2003       I       3.7        2.4      -1.3       5.3         1.5        1.6         2.4        1.9
            II       6.7        5.3      -1.4       5.7         5.0       -1.0         2.9        0.5
           III       9.0        9.3       0.3       6.1         3.6       -2.7         6.3        0.6
            IV       3.1        4.6       1.4       4.4         3.6        1.2        -1.2        0.3

        ANNUAL       4.4        3.8      -0.6       4.1         1.7       -0.4         3.7        1.1

  2004       I       3.7        5.7       2.0       2.0        -1.6       -1.6         8.0        2.0
            II       3.9        4.2       0.3      r5.9        r1.1       r1.9        r4.6        2.9
           III      r1.8       r4.2      r2.4       3.6        r1.8       r1.8        r1.2        1.6
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2002       I       5.1        0.9      -4.0       3.2         2.0       -1.8         6.7        1.2
            II       4.0        1.0      -2.9       3.5         2.2       -0.5         3.4        0.9
           III       4.8        2.6      -2.1       3.4         1.7       -1.3         5.2        1.0
            IV       3.5        2.7      -0.8       2.9         0.6       -0.6         3.7        1.0

        ANNUAL       4.4        1.8      -2.5       3.3         1.6       -1.1         4.7        1.0

  2003       I       2.7        2.3      -0.5       2.9         0.0        0.1         3.9        1.5
            II       4.1        3.2      -0.9       3.4         1.2       -0.7         4.4        1.2
           III       5.2        4.6      -0.7       4.6         2.4       -0.6         3.9        1.1
            IV       5.6        5.4      -0.2       5.4         3.4       -0.2         2.5        0.8

        ANNUAL       4.4        3.8      -0.6       4.1         1.7       -0.4         3.7        1.1

  2004       I       5.6        6.2       0.6       4.5         2.6       -1.0         3.9        0.8
            II       4.9        6.0       1.0      r4.6        r1.7      r-0.3        r4.4        1.5
           III       3.1        4.7       1.5      r4.0        r1.2       r0.8        r3.1        1.7
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       December 7, 2004
  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

  2002       I            143.8        130.5         90.7        144.1          115.9         100.2
            II            145.7        131.8         90.4        147.0          117.2         100.8
           III            147.8        132.4         89.5        148.6          117.8         100.5
            IV            148.8        131.3         88.2        149.9          118.3         100.7

        ANNUAL            146.5        131.5         89.7        147.4          117.3         100.6

  2003       I            151.0        131.3         87.0        155.7          121.8         103.1
            II            152.1        130.1         85.6        158.5          123.8         104.2
           III            156.0        131.5         84.3        161.6          125.5         103.6
            IV            157.2        133.5         84.9        163.9          127.0         104.2

        ANNUAL            154.1        131.6         85.4        159.9          124.5         103.8

  2004       I            158.3        135.5         85.6        162.2          124.5         102.5
            II            161.5        137.8         85.3       r164.9         r125.2        r102.1
           III           r163.3       r139.3         85.3       r166.7         r126.0        r102.1
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2002       I             10.0          2.5         -6.9         14.2           12.7           3.8
            II              5.4          4.0         -1.3          8.2            4.5           2.6
           III              5.9          1.7         -3.9          4.5            2.1          -1.3
            IV              2.8         -3.1         -5.7          3.5            1.6           0.7

        ANNUAL              7.0         -0.6         -7.1          6.7            5.0          -0.3

  2003       I              6.0          0.1         -5.6         16.6           12.3          10.0
            II              2.9         -3.6         -6.3          7.4            6.7           4.4
           III             10.6          4.3         -5.7          8.1            5.6          -2.2
            IV              3.3          6.2          2.8          5.7            4.9           2.3

        ANNUAL              5.1          0.1         -4.8          8.5            6.1           3.2

  2004       I              2.7          6.2          3.4         -4.1           -7.4          -6.6
            II              8.3          6.7         -1.4         r6.8           r2.0         r-1.4
           III             r4.6         r4.5        r-0.1         r4.6           r2.7          r0.0
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2002       I              6.6         -3.4         -9.4          4.1            2.8          -2.4
            II              7.3         -1.1         -7.9          7.0            5.6          -0.3
           III              8.0          0.9         -6.6          8.2            6.5           0.2
            IV              6.0          1.2         -4.5          7.5            5.1           1.4

        ANNUAL              7.0         -0.6         -7.1          6.7            5.0          -0.3

  2003       I              5.0          0.6         -4.2          8.1            5.1           2.9
            II              4.4         -1.3         -5.4          7.9            5.6           3.3
           III              5.5         -0.6         -5.8          8.8            6.5           3.1
            IV              5.6          1.7         -3.8          9.4            7.3           3.5

        ANNUAL              5.1          0.1         -4.8          8.5            6.1           3.2

  2004       I              4.8          3.2         -1.5          4.2            2.3          -0.6
            II              6.2          5.9         -0.3         r4.0           r1.1         r-2.0
           III             r4.7         r5.9         r1.2         r3.2           r0.4         r-1.5
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 7, 2004 
  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

  2002       I            161.4        152.6         94.6        142.2          114.4          88.1
            II            163.9        154.7         94.4        145.2          115.8          88.6
           III            167.0        155.9         93.4        146.4          116.1          87.7
            IV            170.5        156.1         91.5        147.7          116.6          86.6

        ANNUAL            165.7        154.8         93.5        145.4          115.7          87.7

  2003       I            173.6        156.6         90.2        154.9          121.1          89.2
            II            175.0        155.1         88.7        157.9          123.3          90.2
           III            181.5        158.3         87.2        161.2          125.1          88.8
            IV            183.3        161.9         88.3        163.4          126.5          89.1

        ANNUAL            178.3        158.0         88.6        159.3          124.0          89.3

  2004       I            185.2        165.7         89.5        160.4          123.1          86.6
            II            188.7        168.3         89.2       r163.2         r123.9         r86.5
           III           r190.9        170.9         89.5       r164.8         r124.5         r86.3
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2002       I             11.7          2.8         -8.0          8.4            7.0          -2.9
            II              6.3          5.5         -0.7          8.6            5.0           2.2
           III              7.9          3.3         -4.3          3.5            1.1          -4.1
            IV              8.7          0.4         -7.6          3.6            1.7          -4.7

        ANNUAL              8.3         -0.7         -8.3          5.6            3.9          -2.5

  2003       I              7.4          1.4         -5.6         20.8           16.4          12.5
            II              3.1         -3.9         -6.8          8.0            7.3           4.7
           III             15.8          8.4         -6.3          8.7            6.1          -6.1
            IV              4.1          9.4          5.1          5.5            4.7           1.3

        ANNUAL              7.6          2.0         -5.2          9.6            7.1           1.8

  2004       I              4.3          9.9          5.4         -7.1          -10.4         -10.9
            II              7.7          6.3         -1.3         r7.4           r2.5         r-0.3
           III             r4.8         r6.4         r1.6         r4.0           r2.1         r-0.8
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2002       I              7.1         -4.9        -11.2          3.3            2.0          -3.6
            II              8.3         -1.8         -9.3          6.0            4.7          -2.0
           III              9.2          1.2         -7.3          7.0            5.2          -2.0
            IV              8.6          3.0         -5.2          6.0            3.7          -2.4

        ANNUAL              8.3         -0.7         -8.3          5.6            3.9          -2.5

  2003       I              7.6          2.6         -4.6          8.9            5.9           1.2
            II              6.8          0.3         -6.1          8.7            6.5           1.9
           III              8.7          1.5         -6.6         10.1            7.7           1.3
            IV              7.5          3.7         -3.5         10.6            8.5           2.9

        ANNUAL              7.6          2.0         -5.2          9.6            7.1           1.8

  2004       I              6.7          5.8         -0.8          3.5            1.7          -3.0
            II              7.9          8.5          0.6         r3.4           r0.5         r-4.1
           III              5.2          8.0         r2.7         r2.3          r-0.5         r-2.8
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 7, 2004 
  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

  2002       I            126.1        107.2         85.0        146.2          117.6         116.0
            II            127.5        107.8         84.5        148.8          118.7         116.7
           III            128.5        107.7         83.8        151.2          119.9         117.6
            IV            126.9        105.7         83.3        152.5          120.4         120.2

        ANNUAL            127.3        107.1         84.2        149.6          119.1         117.6

  2003       I            128.2        105.3         82.1        155.9          121.9         121.6
            II            129.0        104.4         81.0        158.3          123.6         122.7
           III            130.4        104.3         80.0        161.1          125.0         123.5
            IV            131.5        105.0         79.9        163.3          126.5         124.2

        ANNUAL            129.8        104.8         80.7        159.6          124.2         123.0

  2004       I            132.0        105.5         79.9        163.9          125.9         124.2
            II            134.8        107.2         79.6       r166.2         r126.1        r123.3
           III           r136.6       r107.9         79.0       r168.4         r127.2        r123.3
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2002       I              7.4          2.0         -5.1         26.5           24.9          17.7
            II              4.6          2.2         -2.3          7.2            3.6           2.5
           III              3.2         -0.2         -3.3          6.6            4.1           3.2
            IV             -4.9         -7.3         -2.5          3.7            1.8           9.0

        ANNUAL              4.8         -0.6         -5.2          9.3            7.5           4.3

  2003       I              4.2         -1.5         -5.5          9.1            5.1           4.7
            II              2.3         -3.2         -5.5          6.3            5.7           3.9
           III              4.4         -0.4         -4.6          7.2            4.7           2.7
            IV              3.4          2.6         -0.7          5.6            4.8           2.2

        ANNUAL              2.0         -2.2         -4.1          6.7            4.3           4.6

  2004       I              1.6          1.8          0.2          1.5           -2.0           0.0
            II              8.7          6.9         -1.7         r5.6           r0.8         r-2.9
           III             r5.4         r2.4         -2.8         r5.4           r3.5          r0.0
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2002       I              5.0         -1.7         -6.4          6.2            5.0           1.2
            II              5.3         -0.4         -5.4          9.2            7.9           3.7
           III              6.2          0.5         -5.4         10.9            9.2           4.5
            IV              2.5         -0.9         -3.3         10.6            8.2           8.0

        ANNUAL              4.8         -0.6         -5.2          9.3            7.5           4.3

  2003       I              1.7         -1.8         -3.4          6.6            3.6           4.8
            II              1.2         -3.1         -4.2          6.4            4.2           5.2
           III              1.5         -3.1         -4.5          6.6            4.3           5.0
            IV              3.6         -0.7         -4.1          7.1            5.1           3.3

        ANNUAL              2.0         -2.2         -4.1          6.7            4.3           4.6

  2004       I              2.9          0.2         -2.7          5.2            3.3           2.2
            II              4.5          2.7         -1.7         r5.0           r2.1          r0.5
           III             r4.7         r3.4         -1.3         r4.5           r1.7         r-0.2
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                December 7, 2004 
  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

  2002       I    126.3    149.7     118.5    139.9     112.6     110.8    114.0    111.6     89.1    109.6
            II    127.9    151.4     118.4    141.3     112.7     110.5    112.9    111.2     94.7    109.7
           III    129.2    152.3     117.9    142.1     112.7     110.0    112.7    110.7     95.7    109.4
            IV    130.2    153.1     117.6    142.9     112.8     109.7    112.3    110.4    101.8    109.6

        ANNUAL    128.4    151.6     118.1    141.5     112.7     110.2    113.0    111.0     95.4    109.6

  2003       I    131.3    153.4     116.8    144.1     112.7     109.8    113.2    110.7     99.2    109.7
            II    134.1    156.1     116.4    146.3     114.2     109.1    111.4    109.7    111.0    109.8
           III    137.2    159.4     116.2    148.5     115.3     108.2    111.1    109.0    118.7    109.9
            IV    138.9    162.0     116.7    150.0     116.2     108.0    110.5    108.7    123.2    110.0

        ANNUAL    135.4    157.7     116.5    147.3     114.6     108.8    111.5    109.5    113.2    109.8

  2004       I    138.9    163.2     117.5    150.9     115.9     108.6    109.5    108.8    128.1    110.6
            II   r140.1   r164.9     117.7   r152.9    r116.1    r109.2   r109.9    109.4   r134.3    111.6
           III    141.5    167.2     118.1    154.4     116.7     109.1    110.3    109.4    134.6    111.7
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2002       I      7.9      5.7      -2.0      1.7       0.4      -5.8     -7.3     -6.2     90.8     -1.6
            II      4.9      4.8      -0.1      4.0       0.4      -0.9     -3.7     -1.7     27.4      0.2
           III      4.1      2.3      -1.7      2.3       0.0      -1.7     -0.9     -1.5      4.5     -1.0
            IV      3.4      2.1      -1.2      2.2       0.3      -1.1     -1.4     -1.2     28.1      0.9

        ANNUAL      4.4      1.5      -2.8      3.1       1.4      -1.3     -0.2     -1.0     15.4      0.1

  2003       I      3.2      0.6      -2.5      3.6      -0.2       0.4      3.0      1.1    -10.0      0.1
            II      9.1      7.4      -1.5      6.2       5.5      -2.6     -6.2     -3.6     56.4      0.5
           III      9.4      8.8      -0.6      6.2       3.6      -3.0     -1.0     -2.5     30.8      0.2
            IV      5.0      6.7       1.6      4.2       3.4      -0.8     -2.1     -1.2     16.1      0.4

        ANNUAL      5.4      4.0      -1.3      4.0       1.7      -1.3     -1.3     -1.3     18.7      0.2

  2004       I      0.1      2.9       2.8      2.3      -1.3       2.1     -3.5      0.6     16.9      2.1
            II     r3.3     r4.2       0.9     r5.5      r0.7      r2.2     r1.3      1.9    r21.1      3.8
           III      4.2      5.6       1.3      4.0       2.1      -0.3      1.4      0.2      0.9      0.3
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  2002       I      3.4     -1.1      -4.3      3.2       2.0      -0.2      4.0      0.9      1.5      1.0
            II      4.2      0.8      -3.2      3.4       2.1      -0.8      0.6     -0.4      8.4      0.2
           III      5.0      2.5      -2.4      3.1       1.4      -1.8     -1.7     -1.8     20.6     -0.4
            IV      5.1      3.7      -1.3      2.5       0.3      -2.4     -3.3     -2.7     34.3     -0.4

        ANNUAL      4.4      1.5      -2.8      3.1       1.4      -1.3     -0.2     -1.0     15.4      0.1

  2003       I      3.9      2.5      -1.4      3.0       0.1      -0.9     -0.8     -0.8     11.3      0.1
            II      4.9      3.1      -1.7      3.6       1.4      -1.3     -1.4     -1.3     17.2      0.1
           III      6.2      4.7      -1.5      4.5       2.3      -1.6     -1.4     -1.6     23.9      0.4
            IV      6.6      5.8      -0.8      5.0       3.1      -1.5     -1.6     -1.6     20.9      0.3

        ANNUAL      5.4      4.0      -1.3      4.0       1.7      -1.3     -1.3     -1.3     18.7      0.2

  2004       I      5.9      6.4       0.5      4.7       2.8      -1.1     -3.2     -1.7     29.1      0.8
            II     r4.4     r5.6       1.2     r4.5      r1.6      r0.1    r-1.3     -0.3    r21.1      1.6
           III      3.1      4.8       1.7      4.0       1.2       0.8     -0.7      0.4     13.5      1.6
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        December 7, 2004 
  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 2004.
                                      
                                      
                                      
                            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 1978-2003 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.