USDL 03-466
TRANSMISSION OF THIS
MATERIAL IS EMBARGOED
UNTIL 8:30 A.M. EDT,
THURSDAY, SEPTEMBER 4, 2003.

Internet address:      http://www.bls.gov/lpc/
Historical, technical  
  information:         (202) 691-5606
Current data:          (202) 691-5200
Media contact:         (202) 691-5902


                           PRODUCTIVITY AND COSTS
                             Second Quarter 2003


     The Bureau of Labor Statistics of the U.S. Department of Labor today
reported revised productivity data-as measured by output per hour of all
persons-for the second quarter of 2003.  The seasonally adjusted annual rates
of productivity change in the second quarter were:

               7.2 percent in the business sector and
               6.8 percent in the nonfarm business sector.

In both sectors, increases in productivity were larger than reported on
Aug. 7, due primarily to upward revisions to output.  (See table C.)

     In manufacturing, the revised productivity changes in the second quarter
were:

               3.7 percent in manufacturing,
               3.5 percent in durable goods manufacturing, and
               3.4 percent in nondurable goods manufacturing.

     In total manufacturing, the change in productivity was revised down from
a preliminary estimate of 4.2 percent.  Output and hours in manufacturing,
which includes about 15 percent of U.S. business-sector employment, tend to
vary more from quarter to quarter than data for the more aggregate business
and nonfarm business sectors.  Second-quarter measures are summarized in
table A and appear in detail in tables 1 through 5; the differences between
these measures and the preliminary second-quarter figures issued on Aug. 7
are shown in table C.

     The data sources and methods used in the preparation of the
manufacturing series differ from those used in preparing the business and
nonfarm business series, and these measures are not directly comparable.
Output measures for business and nonfarm business are based on measures of
gross domestic product prepared by the Bureau of Economic Analysis of the
U.S. Department of Commerce.  Quarterly output measures for manufacturing
reflect indexes of industrial production independently prepared by the Board
of Governors of the Federal Reserve System.  See Technical Notes for further
information on data sources (page 8).


----------------------------------------------------------------------------
Table A. Productivity and costs: Revised second-quarter 2003 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            7.2       4.2     -2.7     4.3       3.7       -2.7
Nonfarm business    6.8       4.4     -2.3     3.8       3.2       -2.8
Manufacturing       3.7      -2.4     -5.9     5.2       4.6        1.5
  Durable           3.5      -3.3     -6.5     4.9       4.3        1.4
  Nondurable        3.4      -1.7     -4.9     5.9       5.3        2.4
---------------------------------------------------------------------------
                       Percent change from same quarter a year ago

Business            4.3       3.2     -1.1     3.2       1.0       -1.1
Nonfarm business    4.1       3.2     -0.9     2.9       0.7       -1.2
Manufacturing       3.5      -1.0     -4.3     4.3       2.1        0.8
  Durable           4.2      -0.8     -4.7     3.9       1.7       -0.2
  Nondurable        2.5      -1.2     -3.6     5.0       2.8        2.5
---------------------------------------------------------------------------


Business

     From the first quarter to the second quarter of 2003, productivity in
the business sector grew at a 7.2 percent annual rate, as output increased
4.2 percent and hours worked by all persons engaged in the sector fell 2.7
percent (tables A and 1).  In the first quarter of 2003, productivity
increased 2.7 percent, as output rose 1.4 percent and hours declined 1.2
percent.

     Hourly compensation in the business sector increased 4.3 percent in the
second quarter of 2003 after increasing 4.8 percent one quarter earlier
(seasonally adjusted annual rates).  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, increased 3.7 percent in the second quarter of 2003, after
rising 0.9 percent in the first quarter.

     Changes in unit labor costs reflect changes in both hourly compensation
and productivity.  Unit labor costs decreased 2.7 percent in the second
quarter of 2003, after increasing 2.0 percent in the first quarter
(seasonally adjusted annual rates).  The implicit price deflator for the
business sector rose 0.8 percent in the second quarter, as a 6.6 percent
increase in unit nonlabor payments was partially offset by a decline in unit
labor costs.

Nonfarm business

     Productivity in the nonfarm business sector grew at a 6.8 percent annual
rate in the second quarter of 2003, as output grew 4.4 percent and hours of
all persons fell 2.3 percent (table A).  In the first quarter of 2003, output
per hour in the nonfarm business sector increased 2.1 percent, as output rose
1.4 percent and hours declined 0.7 percent (table 2).

     Hourly compensation rose 3.8 percent in the second quarter of 2003,
following a 4.1 percent advance in the first quarter.  When the rise in
consumer prices was taken into account, real hourly compensation increased
3.2 percent in the second quarter of 2003. This was the largest gain in real
hourly compensation since the third quarter of 2000, when it grew 5.0
percent.

     Unit labor costs decreased 2.8 percent in the second quarter of 2003.
This measure increased 2.0 percent in the first quarter.  Unit nonlabor
payments grew 6.3 percent, and the implicit price deflator for nonfarm
business output rose 0.6 percent in the second quarter of 2003 (seasonally
adjusted annual rates).

Manufacturing

     In the second quarter of 2003, productivity increased 3.7 percent in
manufacturing, as output declined 2.4 percent and hours of all persons fell
5.9 percent (seasonally adjusted annual rates).  In the durable goods sector,
productivity grew 3.5 percent in the second quarter of 2003, as output fell
3.3 percent and hours dropped by 6.5 percent.  In nondurable goods, output
per hour rose 3.4 percent, as output decreased 1.7 percent and hours dropped
4.9 percent (tables 3, 4, and 5).

     The hourly compensation of all manufacturing workers increased 5.2
percent during the second quarter of 2003, reflecting a 4.9-percent rise in
hourly compensation in durable goods industries and a 5.9-percent increase in
the nondurable goods sector.  Real hourly compensation in the total
manufacturing sector advanced 4.6 percent in the second quarter, after
increasing 2.4 percent one quarter earlier.

     Unit labor costs in manufacturing rose 1.5 percent in the second quarter
of 2003, compared with a 2.2 percent increase in the first quarter.  Unit
labor costs rose 1.4 percent in durable goods and 2.4 percent in nondurable
goods in the second quarter of 2003.

Nonfinancial corporations

     Preliminary second-quarter 2003 measures of productivity and costs also
were reported today for nonfinancial corporations (tables B and 6).
Productivity increased 8.1 percent during the second quarter, as output
increased 5.9 percent and hours declined 2.0 percent (seasonally adjusted
annual rates).  In the first quarter of 2003, output per hour increased 4.3
percent, as output rose 2.8 percent and hours of all employees fell 1.5
percent.  Nonfinancial corporations include 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: Preliminary second-quarter 2003
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 II  8.1      5.9     -2.0     3.9      3.3    -3.8    55.5     -0.7
---------------------------------------------------------------------------
              Percent change from same quarter a year ago

2003 II  4.8      3.3     -1.5     3.6      1.5    -1.1    16.2      0.1
---------------------------------------------------------------------------

     Hourly compensation rose 3.9 percent in the second quarter of 2003,
following a 5.2 percent gain in the first quarter.  When the rise in consumer
prices is taken into account, real hourly compensation increased 3.3 percent
in the second quarter and 1.3 percent in the first quarter of 2003 (table 6).

     Unit labor costs for nonfinancial corporations decreased 3.8 percent in
the second quarter of 2003, compared with a 0.9-percent increase in the first
quarter of the year.  Unit profits grew at a 55.5 percent annual rate in the
second quarter of 2003, after rising 7.6 percent in the first quarter.  The
implicit price deflator for nonfinancial corporate output declined 0.7
percent in the second quarter of 2003.


Revised Measures

     Current and previous measures for the second quarter of 2003 for the
business, nonfarm business, and manufacturing sectors are compared in table
C.  The quarterly movements differ from those reported on Aug. 7 based on
information then available.  Ratios of hours worked to hours paid for the
second quarter of 2003, derived from the National Compensation Survey, were
incorporated into the current measures.

-------------------------------------------------------------------------
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
-------------------------------------------------------------------------
                                                               
                             Second quarter 2003
Business:                                                      
  Previous          6.1       3.2     -2.7    3.9      3.3      -2.0
  Current           7.2       4.2     -2.7    4.3      3.7      -2.7
Nonfarm business:                                              
  Previous          5.7       3.4     -2.2    3.5      2.9      -2.1
  Current           6.8       4.4     -2.3    3.8      3.2      -2.8
Manufacturing:                                                 
  Previous          4.2      -2.1     -6.1    5.4      4.8       1.2
  Current           3.7      -2.4     -5.9    5.2      4.6       1.5
-------------------------------------------------------------------------

     In the business and nonfarm business sectors, output and productivity
were revised up, and unit labor costs were revised down.  In the
manufacturing sector, productivity was revised down due to the combination of
a larger decline in output and a smaller decline in hours.  Because
productivity was revised down more than hourly compensation, unit labor costs
in manufacturing rose more than reported on Aug. 7.


Corrected Measures

     In  the Productivity and Costs news release of August 7, 2003, data  for
manufacturing,   durable   manufacturing,   nondurable   manufacturing,   and
nonfinancial corporations for the fourth quarter in 2002, the annual  average
for 2002, and the first quarter in 2003 were incorrect.  Previously published
and  corrected data are displayed in table D for the manufacturing sector and
in  table  E  for the nonfinancial corporate sector.  Tables 3-6 contain  the
correct data for all four sectors.

-----------------------------------------------------------------------
Table D. Manufacturing industries: Published and corrected productivity 
and related measures
Quarterly percent changes at seasonally adjusted annual rates
-----------------------------------------------------------------------
                                                      Real      
                                            Hourly    hourly    Unit
                   Produc-                  compen-   compen-   labor
                   tivity   Output   Hours  sation    sation    costs
-----------------------------------------------------------------------
                                                               
                             First quarter 2003

  Published         4.9      -0.7     -5.3     7.3      3.3      2.2
  Corrected         4.0      -0.7     -4.5     6.3      2.4      2.2

                             Fourth quarter 2002

  Published         3.6      -3.7     -7.1     7.4      5.3      3.6
  Corrected        -0.4      -3.7     -3.3     3.1      1.1      3.5
                                                               
                                  Annual average 2002

  Published         6.4      -1.1     -7.0     5.0      3.4     -1.3
  Corrected         6.1      -1.1     -6.8     4.7      3.1     -1.3
-----------------------------------------------------------------------


----------------------------------------------------------------------------
Table E.  Nonfinancial corporations: Published and corrected productivity 
and cost measures
Quarterly percent changes at seasonally adjusted annual rates
----------------------------------------------------------------------------                                                                    
                                            Real                    
                                   Hourly   hourly  Unit            Implicit
           Produc-                 compen-  compen- labor  Unit     price
           tivity   Output  Hours  sation   sation  costs  profits  deflator
                                                                    
                            First quarter 2003

Published   4.5      2.8     -1.6    5.4      1.5     0.9    7.6      0.7
Corrected   4.3      2.8     -1.5    5.2      1.3     0.9    7.6      0.7

                            Fourth quarter 2002

Published   3.6      2.8     -0.8    2.6      0.6    -1.0   22.8      0.9
Corrected   3.8      2.8     -1.0    2.8      0.8    -1.0   22.8      0.9

                            Annual average 2002

Published   5.8      3.1     -2.5    3.5      1.8    -2.2    9.1     -0.5
Corrected   5.8      3.1     -2.5    3.5      1.9    -2.2    9.1     -0.5
---------------------------------------------------------------------------



                                      
                                      
                              Upcoming changes
                                      
     Historical measures of output and compensation for all sectors, along
with the conversion of the manufacturing and nonfinancial corporate sectors
from the 1987 Standard Industrial Classification (SIC) to the 2002 North
American Industry Classification System (NAICS), will be prepared following
the release of the revised national income and product accounts in December.
On Jan. 7, 2004, the BLS will post revised productivity and cost measures
through the fourth quarter of 2002 on its web site.  More specific
information will be announced later this year.

                              Next release date

     The next release of Productivity and Costs is scheduled for 8:30 AM EST,
Thursday, Nov. 6, 2003.  Preliminary third-quarter measures for business,
nonfarm business, and manufacturing will be released at that time.


                                      

                                      
                               TECHNICAL NOTES
                                      
Labor  Hours: Hours data for the labor productivity and cost measures include
hours for all persons working in the sector-wage and salary workers, the self-
employed,  and  unpaid  family  workers.  The primary  source  of  hours  and
employment data is the BLS Current Employment Statistics (CES) program, which
provides  monthly survey data on the number of jobs held by wage  and  salary
workers in nonfarm establishments.  The CES also provides average weekly paid
hours of production and nonsupervisory workers in these establishments.   The
Office of Productivity and Technology estimates average weekly paid hours  of
nonproduction  and supervisory workers.  Weekly paid hours were  adjusted  to
hours at work using the BLS Hours at Work survey, conducted for this purpose.
Data from the National Compensation Survey are used for recent years.
     Data  from  the  BLS Current Population Survey (CPS) are used  for  farm
labor, nonfarm proprietors, and nonfarm unpaid family workers.  Estimates  of
labor input for government enterprises are derived from the CPS, the CES, and
the  National  Income and Product Accounts (NIPA) prepared by the  Bureau  of
Economic Analysis (BEA) of the Department of Commerce.

Output: Business sector output is an 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 77 percent  of
the  value  of  GDP  in 1996. Nonfarm business, which also excludes  farming,
accounted for about 76 percent of GDP in 1996.
   Annual  indexes  for  manufacturing and its durable and  nondurable  goods
components  are  constructed by deflating current-dollar  industry  value  of
production  data from the U.S. Bureau of the Census with deflators  from  the
BEA.   These deflators are based on data from the BLS producer price  program
and  other  sources.   The  industry shipments are  aggregated  using  annual
weights,  and  intrasector transactions are removed.  Quarterly manufacturing
output  measures  are  based on the index of industrial  production  prepared
monthly  by the Board of Governors of the Federal Reserve System adjusted  to
be  consistent with annual indexes of manufacturing sector output prepared by
BLS.   Durables  include the following 2-digit SIC industries: Primary  metal
industries;  fabricated metal products; nonelectrical  machinery;  industrial
and  commercial  machinery  and  computer  equipment;  electronic  and  other
electrical  equipment;  transportation  equipment;  instruments;  lumber  and
lumber  products; furniture and fixtures; stone, clay, and glass and concrete
products;  and  miscellaneous  manufactures. Nondurables  include:  Food  and
kindred  products, tobacco products, textile mill products, apparel products,
paper  and  allied products, printing and publishing, chemicals and  chemical
products,  petroleum  refining  and related industries,  rubber  and  plastic
products, and leather and leather products.
   Nonfinancial  corporate output is an 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; employees of private households; the rental value  of
owner-occupied  dwellings; unincorporated business;  and  those  corporations
which  are depository institutions, nondepository institutions, security  and
commodity  brokers, insurance carriers, regulated investment  offices,  small
business  investment offices, and real estate investment trusts. Nonfinancial
corporations accounted for about 53 percent of the value of GDP in 1996.

Productivity:  These productivity measures describe the relationship  between
real  output  and the labor time involved in its production.  They  show  the
changes  from  period to period in the amount of goods and services  produced
per  hour.  Although these measures relate output to hours  at  work  of  all
persons engaged in a sector, they do not measure the specific contribution of
labor,  capital, or any other factor of production. Rather, they reflect  the
joint  effects  of many influences, including changes in technology;  capital
investment; level of output; utilization of capacity, energy, and  materials;
the organization of production; managerial skill; and the characteristics and
effort of the work force.
Information  in  this  release  will be made  available  to  sensory-impaired
individuals  upon request. Voice phone: 202-691-5200; Federal  Relay  Service
number: 1-800-877-8339.


  Table 1. Business sector: Productivity, hourly compensation, unit labor costs,
  and prices, seasonally adjusted
                                                             Real
     Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
     and        hour of                of all    tion per    tion per    labor    labor pay-  price
     quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
  ---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

  2001       I     117.4      140.4     119.6     137.4       111.9      117.1       112.0      115.2
            II     117.8      139.4     118.3     138.2       111.6      117.3       113.3      115.8
           III     118.8      139.1     117.1     139.1       112.1      117.1       115.1      116.4
            IV     121.3      140.3     115.6     139.8       112.8      115.2       117.0      115.9

        ANNUAL     118.8      139.8     117.6     138.6       112.1      116.7       114.3      115.8

  2002       I     123.9      142.3     114.9     141.0       113.4      113.8       119.7      116.0
            II     124.1      142.5     114.8     142.4       113.5      114.7       118.8      116.2
           III     125.9      144.4     114.6     143.1       113.5      113.6       120.9      116.3
            IV     126.4      145.0     114.7     143.7       113.4      113.7       122.1      116.8

        ANNUAL     125.1      143.5     114.7     142.5       113.5      113.9       120.4      116.3

  2003       I     127.2      145.5     114.3     145.4       113.7      114.2       122.3      117.2
            II    r129.5     r147.0    r113.5    r146.9      r114.7     r113.5      r124.3     r117.4
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2001       I      -0.5       -1.0      -0.5       4.6         0.8        5.1         0.3        3.4
            II       1.5       -2.8      -4.3       2.3        -0.9        0.8         4.6        2.2
           III       3.3       -0.9      -4.1       2.5         1.6       -0.8         6.8        1.8
            IV       8.7        3.5      -4.8       2.1         2.7       -6.1         6.7       -1.6

        ANNUAL       2.0       -0.2      -2.1       3.8         1.0        1.8         2.3        2.0

  2002       I       8.7        5.9      -2.6       3.5         2.2       -4.8         9.6        0.3
            II       0.8        0.6      -0.2       4.0         0.4        3.1        -3.2        0.7
           III       5.9        5.3      -0.6       2.1         0.0       -3.6         7.6        0.5
            IV       1.5        1.7       0.2       1.6        -0.4        0.1         3.8        1.5

        ANNUAL       5.3        2.7      -2.5       2.8         1.2       -2.3         5.3        0.4

  2003       I       2.7        1.4      -1.2       4.8         0.9        2.0         0.8        1.6
            II      r7.2       r4.2      -2.7      r4.3        r3.7      r-2.7        r6.6       r0.8
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2001       I       2.2        1.4      -0.8       4.9         1.4        2.6         1.4        2.2
            II       1.1       -0.7      -1.7       4.8         1.4        3.7        -0.5        2.1
           III       1.7       -1.0      -2.6       3.3         0.6        1.6         3.7        2.3
            IV       3.2       -0.3      -3.4       2.9         1.0       -0.3         4.6        1.4

        ANNUAL       2.0       -0.2      -2.1       3.8         1.0        1.8         2.3        2.0

  2002       I       5.5        1.4      -3.9       2.6         1.4       -2.8         6.9        0.7
            II       5.4        2.3      -2.9       3.0         1.7       -2.2         4.9        0.3
           III       6.0        3.8      -2.1       2.9         1.3       -2.9         5.0        0.0
            IV       4.2        3.4      -0.8       2.8         0.5       -1.4         4.3        0.7

        ANNUAL       5.3        2.7      -2.5       2.8         1.2       -2.3         5.3        0.4

  2003       I       2.7        2.2      -0.5       3.1         0.2        0.4         2.2        1.1
            II      r4.3       r3.2      -1.1      r3.2        r1.0      r-1.1        r4.6        1.1
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       September 4, 2003
  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

  2001       I     116.9      140.7     120.3     136.7       111.3      117.0       113.5      115.7
            II     117.4      139.7     119.0     137.4       111.0      117.1       114.9      116.3
           III     118.3      139.4     117.8     138.2       111.4      116.8       116.8      116.8
            IV     120.7      140.4     116.3     138.9       112.1      115.1       119.0      116.5

        ANNUAL     118.3      140.1     118.4     137.8       111.4      116.5       116.1      116.3

  2002       I     123.4      142.5     115.5     140.2       112.8      113.6       121.5      116.4
            II     123.7      142.9     115.5     141.5       112.9      114.4       121.2      116.8
           III     125.5      144.7     115.3     142.2       112.8      113.3       123.1      116.9
            IV     126.0      145.3     115.3     142.8       112.7      113.3       124.3      117.3

        ANNUAL     124.7      143.9     115.4     141.7       112.8      113.6       122.5      116.9

  2003       I     126.7      145.8     115.1     144.2       112.8      113.8       124.5      117.7
            II    r128.8     r147.4     114.4    r145.6      r113.7     r113.0      r126.4      117.9
  ---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

  2001       I      -0.4       -0.9      -0.5       4.3         0.5        4.7         0.8        3.3
            II       1.6       -2.7      -4.3       2.0        -1.2        0.3         5.0        2.0
           III       3.4       -0.8      -4.1       2.4         1.5       -0.9         6.6        1.7
            IV       8.3        2.9      -5.0       2.1         2.7       -5.7         7.7       -1.0

        ANNUAL       1.9       -0.1      -2.0       3.6         0.8        1.7         2.4        1.9

  2002       I       9.3        6.2      -2.9       3.7         2.4       -5.2         8.7       -0.2
            II       1.0        0.9       0.0       3.9         0.3        2.9        -0.9        1.4
           III       5.9        5.2      -0.6       2.0        -0.2       -3.7         6.6        0.1
            IV       1.7        1.7       0.0       1.6        -0.4       -0.1         3.9        1.4

        ANNUAL       5.4        2.7      -2.5       2.8         1.2       -2.4         5.6        0.5

  2003       I       2.1        1.4      -0.7       4.1         0.2        2.0         0.4        1.4
            II      r6.8       r4.4     r-2.3      r3.8        r3.2      r-2.8        r6.3       r0.6
  ---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

  2001       I       2.0        1.4      -0.6       4.5         1.1        2.5         1.4        2.1
            II       1.1       -0.6      -1.6       4.6         1.1        3.5        -0.3        2.1
           III       1.7       -0.8      -2.5       3.0         0.3        1.3         3.7        2.2
            IV       3.2       -0.4      -3.5       2.7         0.9       -0.5         5.0        1.5

        ANNUAL       1.9       -0.1      -2.0       3.6         0.8        1.7         2.4        1.9

  2002       I       5.6        1.3      -4.0       2.5         1.3       -2.9         7.0        0.6
            II       5.4        2.3      -3.0       3.0         1.7       -2.3         5.4        0.5
           III       6.1        3.8      -2.1       2.9         1.3       -3.0         5.4        0.1
            IV       4.4        3.5      -0.9       2.8         0.5       -1.6         4.5        0.7

        ANNUAL       5.4        2.7      -2.5       2.8         1.2       -2.4         5.6        0.5

  2003       I       2.6        2.3      -0.3       2.9         0.0        0.2         2.5        1.1
            II      r4.1       r3.2      -0.9      r2.9        r0.7      r-1.2        r4.3        0.9
  ---------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                       September 4, 2003
  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

  2001       I            135.2        134.9         99.8        132.0          107.5          97.6
            II            135.8        132.8         97.8        133.6          107.9          98.4
           III            137.8        131.1         95.1        135.0          108.8          97.9
            IV            139.9        129.1         92.3        136.7          110.3          97.7

        ANNUAL            137.1        132.0         96.3        134.3          108.6          97.9

  2002       I            142.9        129.5         90.6        138.3          111.3          96.8
            II            144.8        130.6         90.2        140.5          112.0          97.0
           III            147.2        131.6         89.4        141.3          112.1          96.0
            IV           r147.0        130.3        r88.6       r142.4         r112.4          96.9

        ANNUAL           r145.5        130.5        r89.7       r140.6         r112.0          96.7

  2003       I           r148.5        130.1        r87.6       r144.6         r113.1          97.4
            II           r149.8       r129.3        r86.3       r146.5         r114.4          97.7
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.1         -7.6         -5.7          1.6           -2.1           3.7
            II              1.8         -6.2         -7.9          5.0            1.7           3.1
           III              6.1         -4.9        -10.3          4.1            3.2          -1.8
            IV              6.0         -6.1        -11.5          5.1            5.7          -0.9

        ANNUAL              1.6         -4.9         -6.4          2.4           -0.4           0.8

  2002       I              9.1          1.2         -7.2          5.0            3.7          -3.8
            II              5.5          3.5         -1.9          6.3            2.7           0.8
           III              6.7          3.0         -3.4          2.5            0.3          -3.9
            IV            r-0.4         -3.7        r-3.3         r3.1           r1.1          r3.5

        ANNUAL             r6.1         -1.1        r-6.8         r4.7           r3.1          -1.3

  2003       I             r4.0         -0.7        r-4.5         r6.3           r2.4           2.2
            II             r3.7        r-2.4        r-5.9         r5.2           r4.6          r1.5
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              1.2         -2.4         -3.6          0.5           -2.9          -0.7
            II              0.7         -5.0         -5.7          3.4            0.0           2.7
           III              1.8         -5.9         -7.5          2.1           -0.6           0.3
            IV              2.9         -6.2         -8.9          3.9            2.1           1.0

        ANNUAL              1.6         -4.9         -6.4          2.4           -0.4           0.8

  2002       I              5.7         -4.0         -9.2          4.8            3.6          -0.9
            II              6.7         -1.7         -7.8          5.1            3.8          -1.4
           III              6.8          0.3         -6.1          4.7            3.1          -2.0
            IV             r5.1          1.0        r-4.0         r4.2           r1.9          -0.9

        ANNUAL             r6.1         -1.1        r-6.8         r4.7           r3.1          -1.3

  2003       I             r3.9          0.5        r-3.3         r4.5           r1.6          r0.6
            II             r3.5        r-1.0        r-4.3         r4.3           r2.1          r0.8
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                September 4, 2003   
  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

  2001       I            149.3        158.3        106.0        129.4          105.3          86.6
            II            149.7        154.9        103.5        131.3          106.1          87.7
           III            151.7        151.8        100.1        132.0          106.4          87.0
            IV            153.7        148.6         96.7        134.3          108.4          87.4

        ANNUAL            151.0        153.4        101.5        131.7          106.5          87.2

  2002       I            158.1        149.4         94.5        135.6          109.1          85.8
            II            160.7        151.2         94.1        138.2          110.3          86.0
           III            163.9        152.6         93.1        138.8          110.1          84.7
            IV           r164.5        151.5        r92.0       r140.0         r110.5          85.1

        ANNUAL           r161.8        151.2        r93.4       r138.1         r110.0          85.4

  2003       I           r165.9        151.3        r91.2       r141.9         r111.0         r85.5
            II           r167.4       r150.0        r89.6       r143.6         r112.2         r85.8
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.0         -8.9         -7.0          3.1           -0.6           5.2
            II              1.0         -8.2         -9.1          6.2            2.9           5.1
           III              5.4         -7.9        -12.6          2.0            1.1          -3.3
            IV              5.5         -8.0        -12.8          7.2            7.8           1.6

        ANNUAL              0.9         -6.3         -7.1          1.8           -0.9           0.9

  2002       I             11.9          2.1         -8.7          3.9            2.6          -7.1
            II              6.7          4.9         -1.7          8.1            4.4           1.2
           III              8.3          3.8         -4.2          1.6           -0.5          -6.2
            IV             r1.5         -2.9        r-4.4         r3.5           r1.5          r2.0

        ANNUAL             r7.1         -1.5        r-8.0         r4.9           r3.3          -2.1

  2003       I             r3.4         -0.5        r-3.8         r5.6           r1.7           2.2
            II             r3.5        r-3.3        r-6.5         r4.9           r4.3           1.4
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              0.5         -2.9         -3.3         -1.1           -4.3          -1.6
            II             -0.2         -6.3         -6.1          3.0           -0.4           3.2
           III              0.9         -7.8         -8.6          1.1           -1.6           0.2
            IV              2.4         -8.2        -10.4          4.6            2.7           2.1

        ANNUAL              0.9         -6.3         -7.1          1.8           -0.9           0.9

  2002       I              5.9         -5.6        -10.8          4.8            3.6          -1.0
            II              7.3         -2.4         -9.1          5.3            3.9          -1.9
           III              8.1          0.5         -7.0          5.2            3.5          -2.7
            IV             r7.0          1.9        r-4.8         r4.2           r2.0          -2.6

        ANNUAL             r7.1         -1.5        r-8.0         r4.9           r3.3          -2.1

  2003       I             r5.0          1.3        r-3.5         r4.7           r1.7         r-0.3
            II             r4.2        r-0.8        r-4.7         r3.9           r1.7          -0.2
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                September 4, 2003  
  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

  2001       I            123.1        112.7         91.6        134.7          109.7         109.4
            II            123.8        111.7         90.2        135.8          109.7         109.7
           III            125.6        111.3         88.6        138.6          111.7         110.3
            IV            127.4        110.1         86.4        139.2          112.4         109.3

        ANNUAL            125.0        111.5         89.2        137.0          110.8         109.7

  2002       I            129.1        110.2         85.4        141.6          113.9         109.7
            II            130.4        110.8         84.9        142.9          113.9         109.5
           III            131.9        111.4         84.4        144.3          114.5         109.4
            IV           r130.9        110.1        r84.1       r145.3         r114.7         111.0

        ANNUAL           r130.6        110.6        r84.7       r143.5         r114.3         109.9

  2003       I           r132.5        109.9        r82.9       r147.9         r115.6         111.6
            II           r133.7       r109.4        r81.9       r150.0         r117.1        r112.2
  --------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

  2001       I             -2.5         -6.0         -3.6         -0.8           -4.4           1.8
            II              2.3         -3.8         -5.9          3.3            0.0           1.0
           III              5.8         -1.4         -6.7          8.4            7.4           2.5
            IV              6.0         -4.0         -9.4          1.9            2.5          -3.8

        ANNUAL              2.3         -3.2         -5.3          3.6            0.8           1.3

  2002       I              5.4          0.3         -4.9          7.1            5.8           1.6
            II              4.2          1.9         -2.1          3.5            0.0          -0.6
           III              4.6          2.3         -2.2          4.2            2.0          -0.4
            IV            r-3.1         -4.6        r-1.6         r2.6           r0.6          r5.9

        ANNUAL             r4.5         -0.8        r-5.0         r4.7           r3.1           0.2

  2003       I             r5.2         -0.6        r-5.5         r7.3           r3.3           2.0
            II             r3.4        r-1.7        r-4.9         r5.9           r5.3          r2.4
  --------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

  2001       I              2.1         -1.9         -3.9          3.1           -0.3           1.0
            II              1.7         -3.4         -5.1          4.1            0.7           2.4
           III              2.5         -3.5         -5.9          4.1            1.3           1.5
            IV              2.8         -3.8         -6.4          3.1            1.3           0.3

        ANNUAL              2.3         -3.2         -5.3          3.6            0.8           1.3

  2002       I              4.8         -2.2         -6.7          5.1            3.9           0.3
            II              5.3         -0.8         -5.8          5.2            3.9          -0.1
           III              5.0          0.1         -4.7          4.2            2.5          -0.8
            IV             r2.7         -0.1        r-2.7         r4.3           r2.1           1.6

        ANNUAL             r4.5         -0.8        r-5.0         r4.7           r3.1           0.2

  2003       I             r2.7         -0.3        r-2.9         r4.4           r1.5           1.7
            II             r2.5        r-1.2        r-3.6         r5.0           r2.8          r2.5
  --------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                September 4, 2003  
  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

  2001       I    118.7    147.9     124.7    131.2     106.8     110.6    111.6    110.8     93.1    109.3
            II    120.0    147.8     123.1    132.6     107.1     110.4    113.5    111.3     95.4    109.9
           III    121.3    147.7     121.7    133.8     107.8     110.3    115.5    111.7     97.9    110.5
            IV    124.5    149.6     120.2    134.7     108.7     108.2    114.1    109.8    107.6    109.6

        ANNUAL    121.1    148.2     122.4    133.0     107.6     109.9    113.7    110.9     98.5    109.8

  2002       I    126.0    150.8     119.7    135.9     109.4     107.9    114.0    109.5    107.6    109.4
            II    127.7    152.8     119.6    137.3     109.5     107.5    114.5    109.4    107.8    109.3
           III    128.7    153.4     119.2    138.2     109.7     107.4    115.4    109.6    104.6    109.1
            IV    129.9    154.5     118.9   r139.2    r109.9     107.1    115.2    109.3    110.1    109.4

        ANNUAL    128.1    152.9    r119.3    137.7     109.6     107.5    114.8    109.4    107.5    109.3

  2003       I    131.3    155.5     118.4    141.0     110.2     107.3    114.6    109.3    112.2    109.6
            II    133.9    157.8     117.8    142.3     111.1     106.3    112.2    107.9    125.3    109.4
  ----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

  2001       I     -2.6     -3.3      -0.7     -1.2      -4.7       1.4     10.1      3.7    -20.2      1.7
            II      4.7     -0.5      -5.0      4.3       1.0      -0.4      7.1      1.6     10.0      2.2
           III      4.4     -0.3      -4.5      3.7       2.8      -0.6      7.2      1.5     10.8      2.2
            IV     10.8      5.4      -4.9      2.7       3.3      -7.3     -4.9     -6.7     46.1     -3.3

        ANNUAL      2.0     -0.1      -2.1      3.1       0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      5.0      3.3      -1.6      3.7       2.5      -1.2     -0.2     -0.9     -0.2     -0.8
            II      5.5      5.3      -0.3      4.2       0.6      -1.3      1.7     -0.5      0.9     -0.3
           III      3.1      1.7      -1.4      2.7       0.5      -0.5      3.1      0.5    -11.2     -0.5
            IV     r3.8      2.8     r-1.0     r2.8      r0.8      -1.0     -0.6     -0.9     22.8      0.9

        ANNUAL      5.8      3.1      -2.5      3.5      r1.9      -2.2      1.0     -1.3      9.1     -0.5

  2003       I     r4.3      2.8     r-1.5     r5.2      r1.3       0.9     -1.9      0.1      7.6      0.7
            II      8.1      5.9      -2.0      3.9       3.3      -3.8     -8.4     -5.1     55.5     -0.7
  ----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

  2001       I      0.9      0.4      -0.4      3.5       0.1       2.6      6.7      3.7    -22.0      1.3
            II      1.5     -0.1      -1.6      3.9       0.5       2.3      6.8      3.5    -19.7      1.3
           III      1.6     -1.1      -2.7      2.7       0.0       1.1      7.8      2.9    -10.6      1.7
            IV      4.2      0.3      -3.8      2.4       0.5      -1.8      4.7      0.0      9.2      0.7

        ANNUAL      2.0     -0.1      -2.1      3.1       0.3       1.0      6.5      2.5    -11.7      1.2

  2002       I      6.2      1.9      -4.0      3.6       2.4      -2.4      2.2     -1.2     15.5      0.0
            II      6.4      3.4      -2.8      3.6       2.3      -2.6      0.9     -1.7     13.0     -0.6
           III      6.1      3.9      -2.1      3.3       1.7      -2.6     -0.1     -1.9      6.9     -1.3
            IV     r4.4      3.2     r-1.1      3.3      r1.1      -1.0      1.0     -0.4      2.4     -0.2

        ANNUAL      5.8      3.1      -2.5      3.5      r1.9      -2.2      1.0     -1.3      9.1     -0.5

  2003       I      4.2      3.1     r-1.1      3.7       0.8      -0.5      0.6     -0.2      4.3      0.2
            II      4.8      3.3      -1.5      3.6       1.5      -1.1     -2.0     -1.4     16.2      0.1
  ----------------------------------------------------------------------------------------------------------
  See footnotes following Table 6.                                        September 4, 2003
  r=revised                                                               Source: Bureau of Labor Statistics


2

                                      1

SOURCES:  Output data are from the Bureau of Economic Analysis and the Census
Bureau of the U.S. Department of Commerce; the Bureau of Labor Statistics,
U.S. Department of Labor; and the Federal Reserve Board.  Compensation and
hours data are from the Bureau of Labor Statistics and the Bureau of Economic
Analysis.

RELIABILITY:  Productivity and cost measures are regularly revised as more
complete information becomes available.  The measures are first published
within 40 days of the close of the reference period; revisions appear 30 days
later, and second revisions after an additional 60 days.  In the business
sector, the third publication (second revision) of a quarterly index of
output per hour of all persons has differed from the initial value by between
-1.4 and +1.5 index points approximately 95 percent of the time.  This
interval is based on the performance of this measure between the fourth
quarter of 1995 and the first quarter of 2003.



                            Footnotes, Tables 1-6

(1)  Wages and salaries of employees plus employers' contributions for social
     insurance and private benefit plans.  Except for nonfinancial
     corporations, where there are no 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 1978-2002 is based on the
     Consumer Price Index research series (CPI-U-RS).

(3)  Unit nonlabor payments include profits, capital consumption allowances,
     interest, rental income of persons, and indirect taxes.

(4)  Current dollar output divided by the output index.

(5)  Quarterly changes:  Percent change compounded at annual rate from the
     original data rather than index numbers.  Annual changes:  Percent
     change between annual average levels.

(6)  Unit nonlabor costs include capital consumption allowances, interest,
     rental income of persons, and indirect taxes.  For nonfinancial
     corporations, rental income of persons is zero by definition.

(7)  Total unit costs are the sum of unit labor and nonlabor costs.

(8)  Unit profits include corporate profits with inventory valuation and
     capital consumption adjustments.