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                           PRODUCTIVITY AND COSTS
                             First Quarter 1997


     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 first quarter of 1997.  The seasonally-adjusted annual rates
of productivity change in the first quarter were:

               2.1 percent in the business sector and
               2.0 percent in the nonfarm business sector.

In both sectors, first-quarter productivity gains were larger than those
posted in the previous three quarters.

     In manufacturing, productivity changes in the first quarter were:

               3.1 percent in manufacturing,
               3.4 percent in durable goods manufacturing, and
               3.5 percent in nondurable goods manufacturing.

     Output and hours in manufacturing, which includes about 18 percent of
U.S. business-sector employment, tend to vary more from quarter to quarter
than data for the more aggregate business and nonfarm business sectors.
First-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 independent indexes of industrial production 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 first-quarter 1997
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           2.1      6.8     4.5    4.5      2.0       2.3
Nonfarm business   2.0      6.8     4.7    4.7      2.3       2.7
Manufacturing      3.1      6.7     3.5    4.5      2.0       1.4
  Durable          3.4      10.3    6.6    4.4      2.0       0.9
  Nondurable       3.5      2.6     -0.8   4.0      1.6       0.5
-------------------------------------------------------------------
                      Percent change from same quarter a year ago
Business           1.2      4.7     3.4    4.0      1.1       2.8
Nonfarm business   0.9      4.6     3.6    3.9      0.9       2.9
Manufacturing      3.8      5.6     1.7    4.4      1.4       0.5
  Durable          4.2      7.3     3.0    4.4      1.4       0.2
  Nondurable       3.7      3.4     -0.3   4.1      1.2       0.4
-------------------------------------------------------------------


Business

     From the fourth quarter of 1996 to the first quarter of 1997, business
sector productivity increased at a 2.1 percent annual rate.  Output and hours
advanced 6.8 percent and 4.5 percent, respectively.   During the fourth
quarter of 1996, output had increased 4.8 percent, and hours of all persons
engaged in the sector increased 3.5 percent (seasonally adjusted annual
rates); productivity rose 1.2 percent (table 1).

     Hourly compensation increased 4.5 percent during the first quarter of
1997 and 3.7 percent in the fourth quarter of 1996.  This measure includes
wages and salaries, supplements, employer contributions to employee benefit
plans, and taxes.  Unit labor costs, which reflect changes in hourly
compensation and productivity, increased at a 2.3 percent rate during the
first quarter.  This increase in unit labor costs was about the same as the
2.4 percent rise in the previous quarter.

     Real hourly compensation, which takes into account changes in the
Consumer Price Index for All Urban Consumers (CPI-U), rose at a 2.0 percent
annual rate in the first quarter, after rising only 0.3 percent in the fourth
quarter of 1996.  The first-quarter increase in real hourly compensation was
the largest recorded since a 5.1 percent increase was posted in the first
quarter of 1992.

     The implicit price deflator for the business sector, which reflects
changes in unit labor costs and unit nonlabor payments, increased 1.8 percent
in the first quarter, somewhat more than the 1.1 percent increase during the
fourth quarter of 1996.

Nonfarm business

     Productivity rose 2.0 percent in the nonfarm business sector in the
first quarter, as output increased 6.8 percent and hours of all persons went
up 4.7 percent.  During the fourth quarter of 1996, productivity had risen
1.1 percent in this sector, reflecting gains of 4.9 percent in output and 3.8
percent in hours (table 2).  The first-quarter increase in productivity was
the largest since the 2.8 percent gain in the fourth quarter of 1993.

     Hourly compensation increased at a 4.7 percent annual rate in the first
quarter, compared with a 3.6 percent increase one quarter earlier.  When the
rise in the CPI-U was taken into account, real hourly compensation rose 2.3
percent; it had increased 0.2 percent in the fourth quarter.

     Unit labor costs rose 2.7 percent in the first quarter.  The implicit
price deflator for nonfarm business output rose 2.0 percent in the first
quarter, compared with a 1.2 percent rise one quarter earlier.

Manufacturing

     Productivity increased at a 3.1 percent seasonally-adjusted annual rate
in manufacturing in the first quarter of 1997, as output rose 6.7 percent and
hours of all persons increased 3.5 percent.  In the fourth quarter of 1996,
productivity and output rose 4.3 percent, and hours were unchanged (table 3).
Although the durable and nondurable subsectors of manufacturing had similar
growth in productivity in the first quarter, 3.4 and 3.5 percent,
respectively, the underlying trends in output and hours were quite different.
In durable goods manufacturing, output growth surged at a 10.3 percent annual
rate in the first quarter, and hours of all persons rose 6.6 percent.
Nondurable goods manufacturing output grew 2.6 percent in the first quarter,
and hours of all persons dropped at a 0.8 percent annual rate (tables 4 and
5).

     Hourly compensation of all manufacturing workers rose 4.5 percent during
the first quarter after having risen 2.7 percent in the fourth quarter of
1996.  Real hourly compensation in the manufacturing sector rose 2.0 percent
in the first quarter of 1997; it had dropped 0.6 percent during the previous
quarter.

     Unit labor costs in manufacturing rose 1.4 percent in the first quarter
of 1997 after having fallen 1.5 percent in the fourth quarter of 1996 and 1.2
percent in the third quarter.  In the first quarter of 1997, unit labor costs
of durable goods producers rose 0.9 percent, and those of nondurable goods
producers rose 0.5 percent.


-------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Fourth-quarter 1996 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
1996 IV   1.7     5.0     3.3     3.2     -0.1     1.5    -9.4     0.1
-------------------------------------------------------------------------
                 Percent change from same quarter a year ago
1996 IV   2.1     4.7     2.6     3.5      0.3     1.3     2.8     0.8
-------------------------------------------------------------------------


Fourth-quarter and annual measures for nonfinancial corporations

     Fourth-quarter and annual 1996 measures of productivity and costs also
were announced today for the nonfinancial corporate sector (tables B, C, and
6).  Output per all-employee hour rose 1.7 percent from the third to the
fourth quarter of 1996 as output increased 5.0 percent and employee hours
rose 3.3 percent.  In the third quarter, productivity had risen 4.0 percent
as output rose 6.1 percent and all-employee hours rose 2.0 percent
(seasonally adjusted annual rates).  The 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.

     Hourly compensation increased 3.2 percent in the fourth quarter, and
real hourly compensation fell 0.1 percent.  Unit labor costs rose 1.5 percent
in the fourth quarter compared with a 0.1 percent rise one quarter earlier.
Total unit costs rose 1.4 during the fourth quarter after having dropped 0.2
percent during the third quarter.  In the fourth quarter, unit profits fell
9.4 percent.  Unit profits had risen 2.0 percent during the third quarter of
1996.  The implicit price deflator for nonfinancial corporate output edged up
0.1 percent during both the third and fourth quarters.


---------------------------------------------------------------------
Table C. Nonfinancial corporations: Annual changes in productivity
and related measures, 1987-1996
---------------------------------------------------------------------
Measure             1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
---------------------------------------------------------------------
Productivity         1.7  1.7 -1.3  0.8  1.6  2.7  1.3  1.3  0.4  2.4 
Output               4.9  5.3  1.6  1.0 -1.3  3.0  3.6  5.6  3.5  4.5 
Hours                3.1  3.5  2.9  0.1 -2.9  0.3  2.2  4.2  3.0  2.1 
Hourly compensation  3.7  4.0  2.6  5.3  4.7  4.7  2.2  1.8  2.6  3.5 
Real hourly                                                           
compensation         0.1 -0.1 -2.1 -0.1  0.5  1.7 -0.8 -0.7 -0.2  0.5
Unit labor costs     2.0  2.3  3.9  4.4  3.0  2.0  0.9  0.5  2.2  1.1 
Unit nonlabor costs  0.0  2.5  7.3  3.0  3.9 -2.9 -0.3  0.0  1.2 -1.6 
Total unit cost      1.5  2.3  4.8  4.0  3.2  0.7  0.6  0.4  1.9  0.4 
Unit profits         9.1  8.1 -7.4 -1.5 -0.8  6.5 13.2 13.2  0.5  6.8 
Implicit price                                                        
deflator             2.2  2.9  3.5  3.5  2.9  1.2  1.7  1.7  1.8  1.1
---------------------------------------------------------------------


     Productivity grew 2.4 percent in nonfinancial corporations in calendar
year 1996, the largest increase since a gain of 2.7 percent was posted in
1992.  In 1995, productivity had grown 0.4 percent.  Output grew faster in
1996, 4.5 percent, than it had one year earlier, when it grew 3.5 percent.
Hours of employees in nonfinancial corporations grew 2.1 percent during 1996.

     The 1996 increase in hourly compensation was 3.5 percent.  Real hourly
compensation rose 0.5 percent in 1996, the first annual increase posted since
1992, when it rose 1.7 percent.

     Total unit costs rose 0.4 percent in 1996, reflecting an increase of 1.1
percent in unit labor costs and a 1.6 percent drop in unit nonlabor costs.
Unit profits for the year rose 6.8 percent; in 1995, they had risen only 0.5
percent.


--------------------------------------------------------------------
Table D. 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
--------------------------------------------------------------------                                                              
                             Fourth quarter 1996
Business:                                                     
  Previous          1.2      4.8     3.6      3.7      0.4      2.5
  Current           1.2      4.8     3.5      3.7      0.3      2.4
Nonfarm business:                                             
  Previous          1.1      5.0     3.9      3.6      0.2      2.5
  Current           1.1      4.9     3.8      3.6      0.2      2.5
Manufacturing:                                                
  Previous          4.4      4.5     0.1      2.8     -0.6     -1.6
  Current           4.3      4.3     0.0      2.7     -0.6     -1.5
--------------------------------------------------------------------

REVISED MEASURES

     Current and previous measures for the fourth quarter of 1996 for the
business, nonfarm business, and manufacturing sectors are compared in
table D.  Some of the quarterly movements differ slightly from those reported on
March 11, based on information then available.

     Measures of productivity, output, and unit labor costs for the business
and nonfarm business sectors and nonfinancial corporations have been revised
back to 1959 to reflect the historical revisions of the National Income and
Product Accounts (NIPA) announced by the Bureau of Economic Analysis, U.S.
Department of Commerce, on April 30.  These revisions were small.  There were
much larger revisions to data on corporate profits for nonfinancial
corporations.  However, these were largely offset by revisions to nonlabor
costs.  Appendix table 1 shows the annual indexes of productivity and costs
for nonfinancial corporations for the years 1959-1994.

                                      
                              Next release date

     The next release of Productivity and Costs is scheduled for 10:00 AM
EDT, Wednesday, June 18, 1997.  First-quarter measures for nonfinancial
corporations and revised measures for business, nonfarm business, and
manufacturing will be released at that time.  This release will incorporate
the annual benchmark revision to the BLS establishment survey data and
revised seasonal factors.  If available at that time, revised historical
output data for the business and nonfarm business sectors for the years 1947-
58 will be included.

                                TECHNICAL NOTES
                                      
                                      
                                      
 Labor  Hours:  The primary source of hours and employment  data  is  the  BLS
 Current  Employment Statistics (CES) program, which provides  monthly  survey
 data on total employment and average weekly paid hours of production and non-
 supervisory  workers  in  nonagricultural establishments.  Jobs  rather  than
 persons  are counted. Weekly paid hours are adjusted to hours at  work  using
 the BLS Hours at Work survey, conducted for this purpose.
       Data  from  the BLS Current Population Survey (CPS) are used  for  farm
 labor; in the nonfarm sector, the National Income and Product Accounts (NIPA)
 prepared  by the Bureau of Economic Analysis (BEA) of the Department  of Com-
 merce and the CPS are used to measure labor input for government enterprises,
 proprietors, and unpaid family workers.
 
 Output: Business sector output is an annual-weighted index constructed  after
 excluding  from  gross domestic product (GDP) the following outputs:  General
 government, nonprofit institutions, paid employees of private households, and
 the  rental value of owner-occupied dwellings. Corresponding exclusions  also
 are  made in labor inputs. Business output accounted for about 76 percent  of
 the  value  of  GDP  in 1992. Nonfarm business, which also excludes  farming,
 accounted for about 75 percent of GDP in 1992.
      Annual manufacturing indexes are constructed by deflating current-dollar
 industry  value  of production data from the U.S. Bureau of the  Census  with
 deflators  from  the BEA.  These deflators are based on  data  from  the  BLS
 producer  price  program  and  other sources.   The  industry  shipments  are
 aggregated  using annual weights, and intrasector transactions  are  removed.
 Quarterly  manufacturing output measures are based on the index of industrial
 production prepared monthly by the Board of Governors of the Federal  Reserve
 System  adjusted to be consistent with annual indexes of manufacturing sector
 output  prepared  by  BLS.   Durables  include  the  following  2-digit   SIC
 industries:   Primary  metal  industries;  fabricated  metal  products;  non-
 electrical  machinery;  industrial  and  commercial  machinery  and  computer
 equipment;   electronic   and  other  electrical  equipment;   transportation
 equipment;  instruments; lumber and lumber products; furniture and  fixtures;
 stone, clay, and glass and concrete products; and miscellaneous manufactures.
 Nondurables  include:  Food and kindred products, tobacco  products,  textile
 mill  products,  apparel  products, paper and allied products,  printing  and
 publishing,  chemicals and chemical products, petroleum refining and  related
 industries, rubber and plastic products, and leather and leather products.
      Nonfinancial corporate output is an annual-weighted index constructed by
 excluding  from  GDP  the  following outputs: General  government;  nonprofit
 institutions; employees of private households; the rental value  of owner-oc-
 cupied  dwellings; unincorporated business; and those corporations which  are
 depository  institutions, nondepository institutions, security and  commodity
 brokers,  insurance  carriers, regulated investment offices,  small  business
 investment   offices,   and  real  estate  investment  trusts.   Nonfinancial
 corporations accounted for about 52 percent of the value of GDP in 1992.
 
 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: 202-606-STAT; TDD phone: 202-606-5897;
 TDD message referral phone number: 1-800-326-2577.
 
 
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

  1995       I     100.4      108.8     108.4     106.2        98.7      105.8       107.4      106.4
            II     100.8      109.0     108.2     107.3        99.0      106.5       107.8     r107.0
           III    r101.1      110.3     109.0     108.3        99.3     r107.1       108.3      107.5
            IV     101.0      110.4     109.3     109.4        99.8     r108.4       106.7      107.8

        ANNUAL     100.8      109.6     108.8     107.8        99.2      106.9       107.6     r107.2

  1996       I     101.5      111.2     109.6     110.3        99.7     r108.7      r107.3      108.2
            II     101.8      112.6     110.6     111.4        99.9     r109.5      r107.6      108.8
           III     101.9      113.2     111.1     112.5       100.2      110.4       107.0      109.2
            IV     102.2     r114.5     112.1     113.5       100.3     r111.1       106.7      109.5

        ANNUAL     101.8      112.9     110.9     111.8       100.0      109.9       107.2      108.9

  1997       I     102.7      116.4     113.3     114.7       100.8      111.7       107.0      110.0
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1995       I      -2.6       r0.4       3.0       2.8         0.1       r5.5        -1.4        3.0
            II       1.4        0.7      -0.7       4.1         0.9        2.6         1.3       r2.1
           III       1.4       r4.7       3.3       3.6         1.5       r2.2         1.8        2.0
            IV      -0.6        0.5       1.1       4.3         1.8        5.0        -5.6        1.0

        ANNUAL       0.1        2.5       2.4       3.1         0.3        3.0        r1.1        2.3

  1996       I       2.1        3.0       0.8       3.2        -0.1       r1.0         2.4        1.5
            II       1.2        5.0       3.8       4.3         0.9        3.1         1.1        2.4
           III       0.3        2.2       1.9       3.8         1.1        3.4        -2.3        1.3
            IV       1.2        4.8      r3.5       3.7        r0.3       r2.4       r-1.2        1.1

        ANNUAL       1.0        3.0       2.0       3.8         0.8        2.8        -0.3        1.6

  1997       I       2.1        6.8       4.5       4.5         2.0        2.3         1.0        1.8
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1995       I       0.0       r3.7       3.8       2.1        -0.7       r2.2         2.8        2.4
            II       0.2        2.2       2.0       3.0        -0.1        2.8         2.0        2.5
           III       0.1        2.4       2.3       3.4         0.7        3.3         0.6        2.3
            IV      -0.1        1.6       1.7       3.7         1.1        3.8        -1.0        2.0

        ANNUAL       0.1        2.5       2.4       3.1         0.3        3.0        r1.1        2.3

  1996       I       1.1        2.2       1.1       3.8         1.0        2.7        -0.1        1.7
            II       1.0        3.3       2.2       3.8         1.0        2.8        -0.1        1.7
           III      r0.8        2.7       1.9       3.9         0.9        3.1       r-1.2        1.6
            IV       1.2        3.7       2.5       3.7         0.5        2.5         0.0        1.6

        ANNUAL       1.0        3.0       2.0       3.8         0.8        2.8        -0.3        1.6

  1997       I       1.2        4.7       3.4       4.0         1.1        2.8        -0.4        1.7
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       May 7, 1997 
  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

  1995       I     100.5      109.0     108.4     106.2        98.7      105.6       108.2      106.5
            II     100.9      109.2     108.3     107.2        98.9      106.3       108.5      107.1
           III     101.3      110.6     109.1     108.2        99.3      106.8       108.9      107.5
            IV    r101.0      110.7     109.5     109.3        99.6      108.1       107.1      107.8

        ANNUAL     100.9      109.9     108.9     107.7        99.1      106.7       108.2      107.2

  1996       I     101.5      111.4     109.8     110.2        99.6      108.5       107.4      108.1
            II     101.7     r112.7     110.9     111.3        99.8      109.4       107.3      108.7
           III     101.7      113.3     111.4     112.2        99.9      110.3      r106.6      109.0
            IV    r101.9     r114.6     112.5     113.2       100.0      111.0       106.3      109.3

        ANNUAL     101.6      113.0     111.2     111.6        99.8      109.8       106.9      108.8

  1997       I     102.5      116.5     113.8     114.5       100.6      111.7       106.6      109.9
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  1995       I     r-2.2        0.6       2.9       2.9         0.2        5.3       r-0.8        3.0
            II       1.5        0.9      -0.6       4.0         0.9        2.5         1.1        2.0
           III      r1.7        5.0       3.2       3.7         1.5        1.9         1.4        1.7
            IV      -1.2       r0.4       1.5       4.0         1.5        5.2        -6.4        0.9

        ANNUAL       0.3        2.7       2.4       3.2         0.3        2.9         1.1        2.2

  1996       I       1.9        2.7       0.8       3.4         0.1        1.5         1.1        1.4
            II       0.6        4.8       4.1       3.9         0.5        3.3        -0.1        2.1
           III       0.0        1.9       1.9       3.3         0.7        3.3        -2.5        1.2
            IV       1.1       r4.9      r3.8       3.6         0.2        2.5       r-1.1        1.2

        ANNUAL       0.7        2.9       2.2       3.6         0.7        2.9        -1.1        1.5

  1997       I       2.0        6.8       4.7       4.7         2.3        2.7         0.9        2.0
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  1995       I       0.2        3.9       3.7       2.3        -0.5        2.1         3.2        2.5
            II       0.3        2.4       2.1       3.0         0.0        2.7         2.1        2.5
           III       0.3        2.6       2.3       3.5         0.8        3.1         0.4       r2.2
            IV      -0.1        1.7       1.8       3.7         1.0        3.7        -1.2        1.9

        ANNUAL       0.3        2.7       2.4       3.2         0.3        2.9         1.1        2.2

  1996       I       1.0        2.2       1.2       3.8         1.0        2.8        -0.8        1.5
            II       0.8        3.2       2.4       3.8         0.9        3.0        -1.1        1.5
           III       0.3        2.4       2.1       3.7         0.7        3.3        -2.0        1.4
            IV       0.9        3.6       2.7       3.6         0.4       r2.6        -0.7        1.5

        ANNUAL       0.7        2.9       2.2       3.6         0.7        2.9        -1.1        1.5

  1997       I       0.9        4.6       3.6       3.9         0.9        2.9        -0.7        1.6                                                                                                                                                                                       
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       May 7, 1997
  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

  1995       I            107.2        112.9        105.3        107.2           99.7         100.0
            II            108.2        112.6        104.0        108.4          100.0         100.2
           III            109.6        113.3        103.4        109.7          100.7         100.1
            IV            110.5        113.6        102.8        110.9          101.1         100.4

        ANNUAL            108.9        113.1        103.9        109.0          100.4         100.2

  1996       I            111.6        113.9        102.0        111.0          100.3          99.4
            II            112.2        115.6        103.0        112.5          100.9         100.3
           III            113.8        117.0        102.8        113.8          101.4         100.0
            IV           r115.0        118.3        102.8        114.6          101.3          99.6

        ANNUAL            113.1        116.2        102.8        112.8          100.9          99.8

  1997       I            115.9        120.2        103.7        115.8          101.8          99.9
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1995       I              2.8          4.2          1.4          3.3            0.5           0.5
            II              3.6         -1.4         -4.7          4.3            1.2           0.7
           III              5.3          2.6         -2.5          5.1            2.9          -0.2
            IV              3.2          1.0         -2.2          4.2            1.7           0.9

        ANNUAL              3.4          3.5          0.1          3.7            0.9           0.3

  1996       I              4.3          1.1         -3.0          0.4           -2.9          -3.7
            II              2.1          6.3          4.1          5.8            2.3           3.6
           III              5.9          5.0         -0.9          4.6            1.9          -1.2
            IV             r4.3         r4.3         r0.0         r2.7           -0.6         r-1.5

        ANNUAL             r3.8         r2.7        r-1.1          3.5            0.5          -0.3

  1997       I              3.1          6.7          3.5          4.5            2.0           1.4
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1995       I              3.1          6.0          2.8          2.7           -0.2          -0.4
            II              2.7          3.6          0.8          3.5            0.4           0.8
           III              3.6          3.0         -0.6          4.0            1.3           0.3
            IV              3.7          1.6         -2.0          4.2            1.5           0.5

        ANNUAL              3.4          3.5          0.1          3.7            0.9           0.3

  1996       I              4.1          0.8         -3.1          3.5            0.7          -0.6
            II              3.7          2.7         -1.0          3.8            1.0           0.1
           III              3.9          3.3         -0.5          3.7            0.7          -0.1
            IV             r4.1         r4.1          0.0          3.4            0.2         r-0.7

        ANNUAL             r3.8         r2.7        r-1.1          3.5            0.5          -0.3

  1997       I              3.8          5.6          1.7          4.4            1.4           0.5
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                May 7, 1997
  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

  1995       I            110.4        118.1        107.0        106.9           99.4          96.9
            II            111.0        117.8        106.1        108.0           99.6          97.3
           III            112.9        119.4        105.8        109.4          100.4          96.9
            IV            114.1        120.4        105.6        110.4          100.7          96.8

        ANNUAL            112.1        118.9        106.1        108.6          100.0          96.9

  1996       I            115.7        121.5        105.0        109.7           99.3          94.8
            II            116.7        124.6        106.8        111.6          100.1          95.6
           III            118.6        126.4        106.5        112.8          100.5          95.1
            IV           r119.5       r127.3        106.5        113.4          100.2          94.8

        ANNUAL            117.5       r124.9        106.3        111.7           99.9          95.1

  1997       I            120.6        130.4        108.2        114.6          100.7          95.0
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1995       I              5.0          7.1          2.0          3.2            0.4          -1.7
            II              2.3         -1.1         -3.3          3.9            0.8           1.6
           III              7.0          5.5         -1.4          5.4            3.2          -1.5
            IV              4.2          3.5         -0.7          3.6            1.1          -0.6

        ANNUAL              4.4          5.5          1.1          3.6            0.8          -0.7

  1996       I              5.8          3.7         -2.0         -2.3           -5.5          -7.7
            II              3.3         10.3          6.8          6.8            3.3           3.3
           III              7.0          6.0         -0.9          4.6            1.9          -2.2
            IV             r3.0         r2.8        r-0.2         r1.9          r-1.4         r-1.1

        ANNUAL              4.9         r5.0          0.2          2.8           -0.1          -1.9

  1997       I              3.4         10.3          6.6          4.4            2.0           0.9
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1995       I              4.2          8.0          3.7          2.6           -0.3          -1.5
            II              3.6          5.6          1.9          3.3            0.3          -0.3
           III              4.5          5.0          0.5          3.9            1.2          -0.6
            IV              4.6          3.7         -0.9          4.0            1.4          -0.6

        ANNUAL              4.4          5.5          1.1          3.6            0.8          -0.7

  1996       I              4.8          2.9         -1.9          2.6           -0.1          -2.1
            II              5.1          5.7          0.6          3.3            0.5          -1.7
           III              5.1          5.8          0.7          3.1            0.1          -1.9
            IV             r4.8         r5.7          0.9          2.7           -0.5         r-2.0

        ANNUAL              4.9         r5.0          0.2          2.8           -0.1          -1.9

  1997       I              4.2          7.3          3.0          4.4            1.4           0.2
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                May 7, 1997
  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

  1995       I            104.4        107.6        103.0        107.3           99.8         102.8
            II            105.8        107.1        101.3        108.6          100.1         102.6
           III            106.7        106.9        100.2        109.7          100.6         102.8
            IV            107.4        106.4         99.1        110.9          101.2         103.3

        ANNUAL            106.1        107.0        100.9        109.2          100.5         102.9

  1996       I            108.1        105.9         98.0        112.2          101.5         103.8
            II            108.4        106.3         98.1        113.2          101.6         104.5
           III            109.6        107.3         97.9        114.6          102.1         104.5
            IV           r111.1       r108.8        r97.9        115.7          102.3         104.1

        ANNUAL            109.2        107.1         98.1        113.8          101.8         104.2

  1997       I            112.1        109.5         97.7        116.9          102.7         104.3 
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  1995       I              0.3          0.8          0.5          3.4            0.6           3.1
            II              5.3         -1.7         -6.7          4.6            1.4          -0.7
           III              3.6         -0.7         -4.1          4.2            2.0           0.6
            IV              2.5         -1.9         -4.3          4.7            2.2           2.2

        ANNUAL              2.5          1.2         -1.3          3.7            0.8           1.1

  1996       I              2.7         -1.9         -4.4          4.7            1.3           2.0
            II              1.3          1.6          0.3          3.7            0.3           2.4
           III              4.6          3.7         -0.9          4.7            2.0           0.1
            IV             r5.6         r5.9         r0.3         r4.1            0.8         r-1.4

        ANNUAL              3.0          0.1         -2.8          4.3            1.3           1.3

  1997       I              3.5          2.6         -0.8          4.0            1.6           0.5
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  1995       I              2.0          3.6          1.6          2.7           -0.2           0.6
            II              1.8          1.2         -0.6          3.5            0.5           1.7
           III              2.9          0.7         -2.1          3.8            1.1           0.9
            IV              2.9         -0.9         -3.7          4.2            1.6           1.3

        ANNUAL              2.5          1.2         -1.3          3.7            0.8           1.1

  1996       I              3.5         -1.5         -4.9          4.5            1.7           1.0
            II              2.5         -0.7         -3.1          4.3            1.4           1.8
           III              2.7          0.3         -2.3          4.4            1.4           1.7
            IV             r3.5          2.3         -1.2          4.3            1.1          r0.8

        ANNUAL              3.0          0.1         -2.8          4.3            1.3           1.3

  1997       I              3.7          3.4         -0.3          4.1            1.2           0.4    
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                May 7, 1997
  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

  1994       I    102.7    107.4     104.5    103.8      99.2     101.0   r102.0    101.3   r118.0    102.8
            II    102.6    108.9     106.1    103.8      98.6     101.2    r98.5    100.5   r129.4    103.1
           III    102.4    109.7     107.0    104.1      98.0     101.6     99.3    101.0   r130.7    103.7
            IV    102.7   r111.4     108.5    104.7      98.0     101.9    r98.7   r101.1   r134.0   r104.1

        ANNUAL    102.6    109.3     106.6    104.1      98.5     101.4     99.6   r101.0   r128.1    103.4

  1995       I    101.8   r111.3     109.4    105.3      97.9     103.4   r100.5   r102.7   r124.9    104.7
            II    102.4   r112.0     109.4    106.3      98.0     103.8   r101.6   r103.2   r124.0    105.1
           III   r103.6    114.0     110.0    107.3      98.4     103.5   r100.4   r102.7   r133.8    105.5
            IV    104.3    115.2     110.5    108.3      98.8     103.9   r100.7   r103.1   r132.1    105.7

        ANNUAL   r103.0   r113.1     109.8    106.8      98.3    r103.7   r100.8   r102.9   r128.8   r105.3

  1996       I    104.6    115.8     110.7    109.0      98.6     104.3   r100.0   r103.2   r136.2    106.1
            II    105.0    117.4     111.9    110.1      98.7     104.9    r99.0   r103.3   r138.5    106.5
           III    106.0    119.2     112.4    111.2      99.1     104.9    r98.8   r103.3   r139.2   r106.6
            IV    106.5    120.6     113.3    112.1      99.0     105.3     99.0    103.7    135.9    106.6

        ANNUAL    105.5    118.3     112.1    110.6      98.9     104.8     99.2    103.4    137.5    106.5

  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  1994       I      1.0      5.0       4.0      3.6       1.6       2.6    r12.4      5.1   r-19.1      2.2
            II     -0.5      5.7       6.3      0.0      -2.3       0.5   r-12.9    r-3.1    r44.6      1.2
           III     -0.6      2.8       3.5      1.1      -2.6       1.7     r3.1     r2.1     r4.0      2.3
            IV      1.1     r6.6       5.5      2.4      -0.1      r1.3    r-2.3     r0.4    r10.4     r1.5

        ANNUAL      1.3      5.6       4.2      1.8      -0.7       0.5     r0.0     r0.4    r13.2      1.7

  1995       I     -3.4    r-0.3       3.3      2.4      -0.4       6.0     r7.5     r6.4   r-24.4      2.4
            II      2.3      2.4       0.2      3.8       0.6       1.5     r4.4     r2.2    r-2.9     r1.7
           III      4.9      7.2       2.2      3.7       1.6      -1.1    r-4.5    r-2.0    r35.7      1.6
            IV     r2.5     r4.4       1.8      3.9       1.4      r1.4     r1.3      1.4    r-4.9     r0.6

        ANNUAL      0.4      3.5       3.0      2.6      -0.2       2.2     r1.2     r1.9     r0.5      1.8

  1996       I      1.3      2.2       0.9      2.7      -0.6      r1.4    r-2.9     r0.3    r12.9      1.7
            II      1.5      5.6       4.1      3.9       0.5      r2.3    r-3.9     r0.7     r7.1     r1.4
           III     r4.0     r6.1       2.0      4.1       1.4      r0.1    r-1.0    r-0.2     r2.0     r0.1
            IV      1.7      5.0       3.3      3.2      -0.1       1.5      1.2      1.4     -9.4      0.1

        ANNUAL      2.4      4.5       2.1      3.5       0.5       1.1     -1.6      0.4      6.8      1.1

  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  1994       I      2.6      6.1       3.4      2.3      -0.2      -0.3      1.5      0.2    r14.7      1.5
            II      1.7     r5.9       4.1      1.9      -0.5       0.2    r-1.1    r-0.1    r16.9      1.6
           III      1.0     r5.3       4.2      1.6      -1.2       0.7    r-0.2     r0.4    r14.6      1.9
            IV      0.2     r5.0       4.8      1.8      -0.9       1.5    r-0.4     r1.1     r7.6      1.8

        ANNUAL      1.3      5.6       4.2      1.8      -0.7       0.5     r0.0     r0.4    r13.2      1.7

  1995       I     -0.9      3.7       4.6      1.5      -1.4       2.4    r-1.5     r1.4     r5.8      1.8
            II     -0.2      2.9       3.1      2.4      -0.6       2.6     r3.1     r2.8    r-4.2     r2.0
           III      1.2     r3.9       2.8      3.1       0.4       1.9     r1.2     r1.7     r2.4      1.8
            IV      1.5      3.4       1.9      3.5       0.8       1.9     r2.1     r2.0    r-1.4      1.6

        ANNUAL      0.4      3.5       3.0      2.6      -0.2       2.2     r1.2     r1.9     r0.5      1.8

  1996       I      2.7      4.0       1.3      3.5       0.8       0.8    r-0.5     r0.5     r9.0      1.4
            II      2.5      4.8       2.2      3.6       0.7      r1.0     -2.5      0.1    r11.7     r1.3
           III      2.3     r4.6       2.2      3.7       0.7       1.3    r-1.7      0.6     r4.1      1.0
            IV      2.1      4.7       2.6      3.5       0.3       1.3     -1.7      0.6      2.8      0.8

        ANNUAL      2.4      4.5       2.1      3.5       0.5       1.1     -1.6      0.4      6.8      1.1

  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        May 7, 1997
  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 30
days after the close of the reference period; revisions appear 30 days later,
and second revisions after an additional 60 days.



                            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)  Compensation per hour adjusted for changes in the Consumer Price Index
     for All Urban Consumers.

(3)  Unit nonlabor payments include profits, capital consumption allowances,
     interest, rental income of persons, and indirect taxes.

(4)  Current dollar output divided by the output index.

(5)  Quarterly changes:  Percent change compounded at annual rate from the
     original data rather than index numbers.  Annual changes:  Percent
     change between annual average levels.

(6)  Unit nonlabor costs include capital consumption allowances, interest,
     rental income of persons, and indirect taxes.  For nonfinancial
     corporations, rental income of persons is zero by definition.

(7)  Total unit costs are the sum of unit labor and nonlabor costs.

(8)  Unit profits include corporate profits with inventory valuation and
     capital consumption adjustments.

Appendix table 1. Nonfinancial corporations:  Productivity, hourly compensation, unit labor costs, 
 unit profits, and prices
 Indexes 1992=100

               Output                      Hourly    Real                Unit     Total     Unit  Implicit
               per all-                    compen-   hourly     Unit     non-     unit      pro-  price
               employee           Employee sation    compen-    labor    labor    costs     fits  deflator
      Year     hour       Output  hours     (1)      sation(2)  costs    costs(6) (7)       (8)     (4)
  --------------------------------------------------------------------------------------------------------
      1959       53.1      27.9     52.5     14.9      71.7      28.0     24.5     27.1     52.4     29.4

      1960       54.1      28.8     53.3     15.5      73.4      28.6     25.3     27.8     47.7     29.6
      1961       55.8      29.4     52.8     16.0      75.1      28.7     25.8     27.9     47.9     29.7
      1962       58.2      31.9     54.8     16.6      77.2      28.6     25.4     27.7     52.0     29.9
      1963       60.2      33.7     56.1     17.1      78.6      28.5     25.3     27.7     55.0     30.1
      1964       62.6      36.1     57.7     17.9      81.0      28.6     25.2     27.7     57.3     30.4

      1965       64.1      39.1     61.0     18.4      82.0      28.7     25.1     27.8     61.8     30.9
      1966       65.0      41.8     64.3     19.4      84.0      29.8     25.1     28.6     61.5     31.6
      1967       65.9      42.9     65.0     20.5      86.0      31.0     26.6     29.9     57.6     32.4
      1968       68.2      45.6     66.9     22.0      88.7      32.3     28.4     31.3     57.5     33.6
      1969       68.2      47.4     69.5     23.5      89.9      34.5     30.6     33.5     51.7     35.1

      1970       68.5      47.0     68.5     25.2      91.0      36.7     34.3     36.1     42.0     36.6
      1971       71.4      48.9     68.4     26.8      92.8      37.5     36.0     37.1     47.6     38.0
      1972       73.3      52.7     71.9     28.3      95.1      38.6     35.9     37.9     51.6     39.2
      1973       74.0      55.8     75.4     30.6      96.6      41.3     37.5     40.3     52.8     41.5
      1974       72.2      54.8     75.8     33.5      95.2      46.3     43.3     45.5     46.2     45.6

      1975       75.1      53.9     71.8     36.8      96.0      49.0     48.9     49.0     61.0     50.1
      1976       77.7      58.3     75.0     39.9      98.5      51.4     48.8     50.7     68.7     52.4
      1977       79.7      62.6     78.5     43.1      99.7      54.0     50.4     53.1     75.4     55.1
      1978       80.4      66.7     83.0     46.8     100.7      58.2     53.8     57.1     78.0     59.0
      1979       79.0      68.2     86.3     51.1      98.8      64.7     59.8     63.4     73.0     64.3

      1980       80.0      68.3     85.4     56.4      96.1      70.5     69.2     70.2     64.4     69.7
      1981       82.5      71.5     86.6     61.6      95.1      74.7     79.0     75.8     75.9     75.8
      1982       83.8      70.5     84.1     65.9      95.9      78.7     85.4     80.4     68.2     79.3
      1983       86.5      73.7     85.3     68.4      96.4      79.1     85.8     80.9     83.3     81.1
      1984       89.1      81.0     90.8     71.3      96.3      80.0     84.3     81.1     99.9     82.8

      1985       90.5      84.2     93.0     74.5      97.2      82.3     85.2     83.1     97.8     84.4
      1986       93.1      86.9     93.4     78.2     100.1      84.0     87.5     84.9     88.0     85.2
      1987       94.7      91.1     96.3     81.2     100.2      85.7     87.5     86.2     95.9     87.1
      1988       96.3      95.9     99.7     84.4     100.1      87.7     89.7     88.2    103.8     89.6
      1989       95.0      97.5    102.5     86.6      98.0      91.1     96.3     92.5     96.0     92.8

      1990       95.8      98.4    102.7     91.2      97.9      95.2     99.1     96.2     94.6     96.1
      1991       97.4      97.1     99.7     95.5      98.4      98.0    103.0     99.3     93.9     98.8
      1992      100.0     100.0    100.0    100.0     100.0     100.0    100.0    100.0    100.0    100.0
      1993      101.3     103.6    102.2    102.2      99.2     100.9     99.7    100.6    113.2    101.7
      1994      102.6     109.3    106.6    104.1      98.5     101.4     99.6    101.0    128.1    103.4
--------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                      May 7, 1997
                                                                        Source: Bureau of Labor Statistics