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Media contact: (202) 691-5902          THURSDAY, SEPTEMBER 6, 2007.



                        PRODUCTIVITY AND COSTS
                     Second Quarter 2007, Revised


   The Bureau of Labor Statistics of the U.S. Department of Labor today 
reported revised productivity data--as measured by output per hour of all 
persons--for the second quarter of 2007.  The seasonally adjusted annual 
rates of productivity change in the second quarter were:

               3.5 percent in the business sector and
               2.6 percent in the nonfarm business sector.

In both sectors, the second-quarter productivity gains were larger than the 
preliminary estimates reported on August 7. (See table C). 

   In manufacturing, the revised productivity changes in the second quarter 
were:

               1.8 percent in manufacturing,
               4.7 percent in durable goods manufacturing, and
              -1.4 percent in nondurable goods manufacturing.

   Manufacturing productivity grew slightly faster in the second quarter of 
2007 than was reported on Aug. 7, reflecting upward revisions to output per 
hour in nondurable manufacturing; durable manufacturing productivity was not 
revised.  Output and hours in manufacturing, which includes about 12 percent 
of U.S. business-sector employment, tend to vary more from quarter to quarter 
than data for the aggregate business and nonfarm business sectors.  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.

------------------------------------------------------------------------------
Table A. Productivity and costs: Revised second-quarter 2007 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                 3.5        4.6     1.0       5.5      -0.5       1.9
Nonfarm business         2.6        5.0     2.3       4.1      -1.8       1.4
Manufacturing            1.8        4.0     2.1       3.4      -2.4       1.6
  Durable                4.7        6.8     2.0       1.7      -4.1      -2.8
  Nondurable            -1.4        0.8     2.3       6.8       0.8       8.4
------------------------------------------------------------------------------
                           Percent change from same quarter a year ago

Business                 0.8        2.0     1.1       5.9       3.2       5.1
Nonfarm business         0.9        2.1     1.3       5.8       3.0       4.9
Manufacturing            3.0        1.9    -1.1       6.8       4.0       3.7
  Durable                4.5        2.5    -1.9       7.0       4.1       2.3
  Nondurable             0.8        1.1     0.4       6.8       4.0       6.0
------------------------------------------------------------------------------


Business

   From the first quarter to the second quarter of 2007, productivity in 
the business sector grew 3.5 percent as output increased 4.6 percent and 
hours worked by all persons engaged in the sector--employees, proprietors, 
and unpaid family workers--rose 1.0 percent (tables A and 1).
Productivity had increased 0.2 percent during the first quarter of 2007, as 
output increased 0.2 percent and hours were unchanged (seasonally adjusted 
annual rates).
 
   Hourly compensation in the business sector grew at a 5.5 percent annual 
rate in the second quarter of 2007, the same rate of growth as one quarter 
earlier.  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, fell 0.5 
percent in the second quarter of 2007 after increasing 1.6 percent in the 
first quarter of the year. 

   Unit labor costs, which reflect changes in hourly compensation and 
productivity, rose 1.9 percent in the second quarter of 2007.  Unit labor 
costs had increased 5.3 percent in the first quarter of 2007.  From the 
second quarter of 2006 to the second quarter of 2007, these costs increased 
5.1 percent--the largest four-quarter increase since unit labor costs 
increased 5.2 percent between the fourth quarter of 1989 and the fourth 
quarter of 1990. The implicit price deflator for business output, which 
exhibits changes in unit labor costs and unit nonlabor payments, rose 2.5 
percent in the second quarter of 2007 and 4.1 percent in the first quarter. 


Nonfarm business

   Productivity in the nonfarm business sector grew at a 2.6 percent annual 
rate in the second quarter of 2007, reflecting increases of 5.0 percent in 
output and 2.3 percent in hours of all persons (tables A and 2).  In the 
first quarter of 2007, productivity increased 0.7 percent, output rose 0.3 
percent, and hours fell 0.3 percent.
 
   Hourly compensation increased 4.1 percent in the second quarter of 2007, 
but when the 6.0 percent jump in consumer prices was taken into account, real 
hourly compensation fell 1.8 percent in the second quarter.  As revised, 
hourly compensation increased 5.9 percent in the first quarter of 2007.  

   Unit labor costs rose 1.4 percent in the second quarter of 2007, 
following a 5.2-percent increase in the first quarter.  Unit labor costs 
increased 4.9 percent from the second quarter of 2006 to the second quarter 
of 2007, more than during any four-quarter period since third-quarter 1999 to 
third-quarter 2000, when they increased 5.0 percent. The implicit price 
deflator for nonfarm business output increased 2.4 percent in the second 
quarter of 2007 and 3.6 percent one quarter earlier.


Manufacturing

   Productivity increased 1.8 percent in manufacturing in the second 
quarter of 2007, as output grew 4.0 percent and hours of all persons 
increased 2.1 percent (seasonally adjusted annual rates).  Productivity grew 
4.7 percent in the durable goods sector, reflecting a 6.8-percent increase in 
output and 2.0-percent rise in hours.  In nondurable goods, productivity fell 
1.4 percent when output grew 0.8 percent but hours grew faster, 2.3 percent 
(tables 3, 4, and 5).  

   The hourly compensation of all manufacturing workers increased 3.4 
percent during the second quarter of 2007, reflecting increases in hourly 
compensation of 1.7 percent in durable goods industries and 6.8 percent in 
the nondurable goods sector.  Real hourly compensation in the total 
manufacturing sector fell 2.4 percent in the second quarter after consumer 
prices were taken into account.  Revised results for the first quarter of 
2007 show that hourly compensation had increased 8.9 percent and real hourly 
compensation had increased 4.8 percent in total manufacturing.

   Unit labor costs in manufacturing increased 1.6 percent in the second 
quarter of 2007 following a revised first-quarter increase of 7.0 percent.  
Unit labor costs fell 2.8 percent in durable goods and rose 8.4 percent in 
nondurable goods in the second quarter.


Nonfinancial corporations

   Preliminary second-quarter 2007 measures of productivity and costs were 
reported today for nonfinancial corporations (tables B and 6).  Productivity 
increased 3.5 percent during the second quarter, reflecting 4.6-percent 
growth in output and a 1.0-percent rise in employee hours (seasonally 
adjusted annual rates).  In the first quarter of 2007, output per hour rose 
0.7 percent, output increased 0.9 percent, and employee hours rose 0.2 
percent (as revised).  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 2007 
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
   
2007 II    3.5     4.6     1.0      4.7    -1.2      1.1      8.6       1.5
------------------------------------------------------------------------------
                     Percent change from same quarter a year ago

2007 II    2.1     3.2     1.1      5.6     2.8      3.4     -4.4       1.7
------------------------------------------------------------------------------

   Hourly compensation rose 4.7 percent in the second quarter of 2007, 
following a 4.5 percent gain in the first quarter (as revised).  When the 
rise in consumer prices is taken into account, real hourly compensation fell 
1.2 percent in the second quarter after increasing 0.6 percent one quarter 
earlier.  Unit labor costs for nonfinancial corporations increased 1.1 
percent in the second quarter of 2007.  

   Unit profits increased 8.6 percent in second quarter 2007, following an 
11.8-percent increase in the first quarter.  The implicit price deflator for 
nonfinancial corporate output rose 1.5 percent in the second quarter. 


Revised Measures

   Current and previous measures for the second quarter of 2007 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.  In the business sector, productivity was revised 
up in the second quarter as output was revised up and hours increased 
slightly less than previously reported.  In the nonfarm business sector, 
productivity also was revised up in the second quarter, as output was revised 
up while hours were unchanged.  In both of these sectors, upward revisions to 
productivity were larger than those to hourly compensation, so unit labor 
costs were revised down in the second quarter.  In the manufacturing sector, 
an upward revision to productivity in the second quarter resulted when output 
posted a larger upward revision than hours.  An upward revision to 
manufacturing hourly compensation was larger than the revision to 
productivity, resulting in a faster rise in unit labor costs than was 
previously reported.

------------------------------------------------------------------------------
Table C. Business, nonfarm business, and manufacturing: Previous and revised 
productivity and related measures
(Quarterly percent changes at seasonally adjusted annual rates)
------------------------------------------------------------------------------
                                                               Real
                                                     Hourly    hourly    Unit
                        Produc-                      compen-   compen-   labor
Sector                  tivity    Output   Hours     sation    sation    costs
------------------------------------------------------------------------------
                                    Second quarter 2007

Business:                  
  Previous               2.6        3.8      1.1       5.3     -0.7      2.6
  Revised                3.5        4.6      1.0       5.5     -0.5      1.9
Nonfarm business:                      
  Previous               1.8        4.2      2.3       3.9     -2.0      2.1
  Revised                2.6        5.0      2.3       4.1     -1.8      1.4
Manufacturing:                
  Previous               1.6        3.5      1.8       2.8     -3.0      1.2
  Revised                1.8        4.0      2.1       3.4     -2.4      1.6
  
                                    First quarter 2007

Business:                  
  Previous               0.2        0.2      0.0       3.3     -0.5      3.1
  Revised                0.2        0.2      0.0       5.5      1.6      5.3
Nonfarm business:                      
  Previous               0.7        0.3     -0.3       3.7     -0.2      3.0
  Revised                0.7        0.3     -0.3       5.9      2.0      5.2
Manufacturing:                
  Previous               1.7        0.9     -0.8       6.8      2.8      5.0
  Revised                1.7        0.9     -0.8       8.9      4.8      7.0
------------------------------------------------------------------------------

Hourly compensation growth in the first quarter also was revised to reflect 
new estimates of compensation.  In all of the major sectors, hourly 
compensation grew faster in the first quarter than was reported on Aug. 7.  
As a result, unit labor costs in these sectors increased more than in 
preliminary estimates.  


Revised Measures: Nonfinancial Corporations

   Data for the first quarter of 2007 were revised for the nonfinancial 
corporate sector.  Productivity was revised up along with output; hours were 
not revised.  Hourly compensation was revised up more than productivity, 
causing unit labor costs to increase 3.8 percent rather than 3.6 percent, as 
reported on August 7.  

------------------------------------------------------------------------------
Table D.  Nonfinancial corporations: Previous and revised productivity and 
cost measures
(Quarterly percent changes at seasonally adjusted annual rates)
------------------------------------------------------------------------------
                                           Real
                                  Hourly   hourly   Unit              Implicit
         Produc-                  compen-  compen-  labor   Unit      price
         tivity   Output  Hours   sation   sation   costs   profits   deflator
------------------------------------------------------------------------------
                                 First quarter 2007
   
Previous   0.2      0.4    0.2     3.8      -0.1     3.6     12.4       3.9
Revised    0.7      0.9    0.2     4.5       0.6     3.8     11.8       3.9
------------------------------------------------------------------------------


                              Next release date
                              
   The next release of Productivity and Costs is scheduled for 8:30 AM EST, 
Wednesday, November 7, 2007.  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 em-
ployment data is the BLS Current Employment Statistics (CES) program, which 
provides monthly survey data on the number of jobs held by wage and salary 
workers in nonfarm establishments.  The CES also provides average weekly paid 
hours of production and nonsupervisory workers in these establishments.  
Weekly paid hours are adjusted to hours at work using data from the National 
Compensation Survey (NCS).  The BLS Hours at Work survey, conducted for this 
purpose, was used for earlier years.  The Office of Productivity and 
Technology estimates average weekly hours at work for nonproduction and 
supervisory workers using information from the Current Population Survey 
(CPS), the CES, and the NCS.
      Data from the CPS are used for farm labor, nonfarm proprietors, and 
nonfarm unpaid family workers.  Estimates of labor input for government 
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.
      The CES measures jobs, counting a person who is employed by two or more 
establishments at each place of employment. In contrast, the CPS features 
measures of employment that count each person only once and classify each 
person according to his or her primary job; hours worked at all jobs by that 
person accrue to his or her primary job.  However, the CPS also collects more 
detailed information on employment and hours worked at primary jobs and all 
other jobs, separately.  The BLS productivity measures use the more detailed 
information on employment and hours to assign all hours worked to the correct 
industrial sector and avoid duplicating hours data from the CES.

Output: Business sector output is an annual-weighted index constructed after 
excluding from gross domestic product (GDP) the following outputs: general 
government, nonprofit institutions, and private households (including owner-
occupied housing). Corresponding exclusions also are made in labor inputs. 
Business output accounted for about 78 percent of the value of GDP in 2000. 
Nonfarm business, which also excludes farming, accounted for about 77 percent 
of GDP in 2000.
      Annual indexes for manufacturing and its durable and nondurable goods 
components are constructed by deflating current-dollar industry value of 
production data from the U.S. Bureau of the Census with deflators from the 
BLS.  These deflators are based on data from the BLS producer price program 
and other sources.  The industry shipments are aggregated using annual 
weights, and intrasector transactions are removed.  Quarterly manufacturing 
output measures are based on the index of industrial production prepared 
monthly by the Board of Governors of the Federal Reserve System, adjusted to 
be consistent with annual indexes of manufacturing sector output prepared by 
BLS.  Durables include the following 3-digit NAICS industries: wood product 
manufacturing; nonmetallic mineral product manufacturing; primary metal 
manufacturing; fabricated metal product manufacturing; machinery manufac-
turing; computer and electronic product manufacturing; electrical equipment 
and appliance manufacturing; transportation equipment manufacturing; 
furniture and related product manufacturing; and miscellaneous manufacturing. 
Nondurables include: food manufacturing; beverage and tobacco product 
manufacturing; textile mills; textile product mills; apparel manufacturing; 
leather and allied product manufacturing; paper manufacturing; printing and 
related support activities; petroleum and coal products manufacturing; 
chemical manufacturing; and plastics and rubber products manufacturing.
      Nonfinancial corporate output is an annual-weighted index calculated on 
the basis of the costs incurred and the incomes earned from production.  The 
output measure excludes the following outputs from GDP: general government; 
nonprofit institutions; private households; unincorporated business; and 
those corporations classified as offices of bank holding companies, offices 
of other holding companies, or offices in the finance and insurance sector. 
Nonfinancial corporations accounted for about 54 percent of the value of GDP 
in 2000.
      
Productivity: These productivity measures describe the relationship between 
real output and the labor time involved in its production. They show the 
changes from period to period in the amount of goods and services produced 
per hour. Although these measures relate output to hours at work of all 
persons engaged in a sector, they do not measure the specific contribution of 
labor, capital, or any other factor of production. Rather, they reflect the 
joint effects of many influences, including changes in technology; capital 
investment; level of output; utilization of capacity, energy, and materials; 
the organization of production; managerial skill; and the characteristics and 
effort of the work force.

Labor Compensation: Estimates of labor compensation by major sector, required 
for measures of hourly compensation and unit labor costs, are based primarily 
on employee compensation data from the NIPA, prepared by the BEA.   The 
compensation of employees in general government, nonprofit institutions and 
private households are subtracted from compensation of domestic employees to 
derive employee compensation for the business sector. The labor compensation 
of proprietors cannot be explicitly identified and must be estimated.   This 
is done by assuming that proprietors have the same hourly compensation as 
employees in the same sector.  The quarterly labor productivity and cost 
measures do not contain estimates of compensation for unpaid family workers.  
        
Unit Labor Costs:  The measures of unit labor costs in this release describe 
the relationship between compensation per hour and productivity, or real 
output per hour, and can be used as an indicator of inflationary pressure on 
producers.  Increases in hourly compensation increase unit labor costs; labor 
productivity increases offset compensation increases and lower unit labor 
costs. 

Presentation of the data:  The quarterly data in this release are presented 
in three ways; as index number series where 1992=100, as percent changes from 
the corresponding quarter of the previous year, and as percent changes from 
the previous quarter presented at a compound annual rate.  Annual data are 
presented both as index number series and percent changes from the previous 
year.  
	The index numbers and rates of change reported in the productivity and 
costs news release are rounded to one decimal place.  All percent changes in 
this release and on the BLS web site are calculated using index numbers to 
three decimal places.  These index numbers are available at the BLS web site, 
http://www.bls.gov/data/home.htm, or by contacting the BLS Division of Major 
Sector Productivity.  (Telephone 202-691-5606 or email DPRWEB@BLS.GOV)
        
Information in this release will be made available to sensory-impaired 
individuals upon request. Voice phone: 202-691-5606; Federal Relay Service 
number: 1-800-877-8339.




Table 1. Business sector: Productivity, hourly compensation, unit labor costs, and prices, 
seasonally adjusted
                                                           Real
   Year       Output per             Hours     Compensa-   compensa-   Unit     Unit non-   Implicit
   and        hour of                of all    tion per    tion per    labor    labor pay-  price
   quarter    all persons  Output    persons   hour (1)    hour (2)    costs    ments (3)   deflator (4)
---------------------------------------------------------------------------------------------------------
                                           Indexes 1992=100

2005       I     134.4      157.2     117.0     161.4       120.3      120.1       128.2      123.1
          II     134.3      158.5     118.0     161.7       119.4      120.4       129.8      123.9
         III     135.9      160.6     118.2     164.2       119.6      120.8       132.0      125.0
          IV     135.5      161.0     118.8     165.4       119.4      122.0       133.0      126.1

      ANNUAL     135.0      159.3     118.0     163.2       119.7      120.9       130.8      124.5

2006       I     136.4      163.2     119.6     168.2       120.9      123.4       133.0      127.0
          II     136.6      164.2     120.2     168.1       119.3      123.0       136.5      128.0
         III     136.1      164.4     120.8     168.7       118.9      124.0       136.6      128.7
          IV     136.5      165.5     121.2     173.4       122.8      127.0       132.2      128.9

      ANNUAL     136.4      164.3     120.5     169.6       120.4      124.3       134.6      128.2

2007       I     136.6      165.6     121.2    r175.7      r123.3     r128.6      r132.9      130.2
          II    r137.8     r167.4    r121.5    r178.0      r123.1     r129.2      r134.0     r131.0
---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

2005       I       3.0        3.7       0.7       3.0         1.1        0.0         9.1        3.4
          II      -0.3        3.3       3.6       0.7        -3.1        1.0         5.1        2.6
         III       4.9        5.5       0.6       6.2         0.7        1.3         7.1        3.5
          IV      -1.1        1.0       2.1       2.9        -0.5        4.0         3.1        3.7

      ANNUAL       2.0        3.6       1.6       4.0         0.6        2.0         4.9        3.1

2006       I       2.5        5.5       2.9       7.2         5.1        4.6         0.0        2.8
          II       0.8        2.5       1.7      -0.4        -5.1       -1.2        10.7        3.3
         III      -1.5        0.6       2.2       1.6        -1.6        3.1         0.5        2.1
          IV       1.2        2.6       1.4      11.4        13.8       10.1       -12.4        0.8

      ANNUAL       1.0        3.1       2.1       3.9         0.6        2.9         2.9        2.9

2007       I       0.2        0.2       0.0      r5.5        r1.6       r5.3        r2.1        4.1
          II      r3.5       r4.6      r1.0      r5.5       r-0.5       r1.9        r3.5        2.5
---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

2005       I       2.5        3.8       1.2       5.0         1.9        2.4         4.1        3.1
          II       1.5        3.5       2.0       3.8         0.9        2.3         3.6        2.8
         III       2.4        3.9       1.5       4.0         0.3        1.6         5.8        3.2
          IV       1.6        3.4       1.7       3.2        -0.5        1.6         6.1        3.3

      ANNUAL       2.0        3.6       1.6       4.0         0.6        2.0         4.9        3.1

2006       I       1.5        3.8       2.3       4.2         0.5        2.7         3.8        3.1
          II       1.7        3.6       1.8       3.9         0.0        2.2         5.1        3.3
         III       0.2        2.4       2.2       2.8        -0.6        2.6         3.5        3.0
          IV       0.7        2.8       2.1       4.8         2.8        4.1        -0.6        2.2

      ANNUAL       1.0        3.1       2.1       3.9         0.6        2.9         2.9        2.9

2007       I       0.2        1.5       1.3      r4.4        r1.9       r4.3       r-0.1        2.6
          II      r0.8       r2.0      r1.1      r5.9        r3.2       r5.1       r-1.8        2.4
---------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                       September 6, 2007
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

2005       I     133.4      157.4     118.0     160.3       119.5      120.2       129.6      123.6
          II     133.5      158.6     118.8     160.9       118.8      120.5       131.3      124.5
         III     135.0      160.8     119.1     163.2       118.8      120.9       133.7      125.6
          IV     134.5      161.2     119.8     164.2       118.6      122.1       134.8      126.8

      ANNUAL     134.1      159.5     118.9     162.1       118.9      120.9       132.4      125.1

2006       I     135.3      163.4     120.8     167.1       120.1      123.5       135.0      127.7
          II     135.6      164.4     121.2     167.0       118.6      123.2       138.7      128.9
         III     135.0      164.7     122.0     167.5       118.0      124.0       138.6      129.4
          IV     135.6      165.7     122.2     172.4       122.1      127.1       133.6      129.5

      ANNUAL     135.4      164.5     121.5     168.5       119.7      124.5       136.5      128.9

2007       I     135.9      165.9     122.1    r174.9      r122.7     r128.7      r133.9      130.6
          II    r136.7     r167.9    r122.8    r176.7      r122.1     r129.2      r135.3     r131.4
---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

2005       I       3.7        3.9       0.2       3.6         1.6       -0.1        10.4        3.8
          II       0.3        3.2       2.9       1.5        -2.4        1.2         5.1        2.7
         III       4.4        5.6       1.1       5.7         0.2        1.3         7.8        3.8
          IV      -1.4        0.9       2.4       2.6        -0.8        4.1         3.2        3.7

      ANNUAL       1.9        3.6       1.6       4.0         0.7        2.0         5.5        3.4

2006       I       2.5        5.7       3.1       7.2         5.1        4.6         0.5        3.0
          II       0.8        2.4       1.6      -0.2        -5.0       -1.0        11.5        3.7
         III      -1.6        0.8       2.4       1.3        -1.8        2.9        -0.4        1.6
          IV       1.8        2.6       0.8      12.2        14.6       10.3       -13.6        0.3

      ANNUAL       1.0        3.2       2.2       3.9         0.6        2.9         3.1        3.0

2007       I       0.7        0.3      -0.3      r5.9        r2.0       r5.2        r1.0        3.6
          II      r2.6       r5.0       2.3      r4.1       r-1.8       r1.4        r4.2        2.4
---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

2005       I       2.5        3.8       1.4       4.9         1.8        2.3         4.8        3.3
          II       1.4        3.4       2.0       3.9         0.9        2.5         4.3        3.2
         III       2.2        3.8       1.5       4.0         0.3        1.7         6.4        3.5
          IV       1.7        3.4       1.7       3.3        -0.4        1.6         6.6        3.5

      ANNUAL       1.9        3.6       1.6       4.0         0.7        2.0         5.5        3.4

2006       I       1.4        3.8       2.4       4.2         0.5        2.8         4.1        3.3
          II       1.5        3.6       2.0       3.8        -0.2        2.2         5.7        3.5
         III       0.1        2.4       2.4       2.7        -0.7        2.6         3.6        3.0
          IV       0.9        2.8       2.0       5.0         3.0        4.1        -0.9        2.2

      ANNUAL       1.0        3.2       2.2       3.9         0.6        2.9         3.1        3.0

2007       I       0.4        1.5       1.1      r4.7        r2.2       r4.3       r-0.8        2.3
          II      r0.9       r2.1       1.3      r5.8        r3.0       r4.9       r-2.5        2.0
---------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                       September 6, 2007
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

2005       I            168.3        142.7         84.8        166.2          123.9          98.7
          II            170.9        143.8         84.1        167.8          123.9          98.2
         III            172.4        144.5         83.8        170.2          124.0          98.7
          IV            173.7        147.3         84.8        168.8          121.9          97.2

      ANNUAL            171.3        144.6         84.4        168.3          123.4          98.2

2006       I            175.4        149.5         85.2        172.6          124.1          98.4
          II            177.0        151.6         85.6        170.1          120.8          96.1
         III            179.8        153.4         85.3        170.7          120.2          94.9
          IV            180.7        152.6         84.4        176.4          125.0          97.6

      ANNUAL            178.2        151.7         85.1        172.4          122.5          96.8

2007       I            181.5        152.9         84.3       r180.2         r126.4         r99.3
          II           r182.3       r154.4        r84.7       r181.7         r125.7         r99.7
--------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

2005       I              4.9          4.6         -0.3          1.0           -0.9          -3.7
          II              6.3          3.1         -3.0          4.0            0.0          -2.2
         III              3.5          2.1         -1.4          5.6            0.1           2.1
          IV              3.1          7.9          4.6         -3.1           -6.4          -6.0

      ANNUAL              4.8          3.5         -1.2          4.2            0.8          -0.6

2006       I              4.0          6.0          1.9          9.4            7.2           5.1
          II              3.7          5.7          2.0         -5.8          -10.2          -9.1
         III              6.5          4.8         -1.6          1.4           -1.8          -4.8
          IV              2.0         -2.1         -4.0         14.2           16.6          12.0

      ANNUAL              4.0          4.9          0.9          2.5           -0.8          -1.5

2007       I              1.7          0.9         -0.8         r8.9           r4.8          r7.0
          II             r1.8         r4.0         r2.1         r3.4          r-2.4          r1.6
--------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

2005       I              4.4          3.1         -1.2          6.0            2.9           1.5
          II              5.1          3.4         -1.6          5.0            2.1           0.0
         III              5.2          3.3         -1.9          4.0            0.3          -1.1
          IV              4.4          4.4          0.0          1.8           -1.8          -2.5

      ANNUAL              4.8          3.5         -1.2          4.2            0.8          -0.6

2006       I              4.2          4.7          0.5          3.9            0.1          -0.3
          II              3.6          5.4          1.8          1.3           -2.5          -2.1
         III              4.3          6.1          1.7          0.3           -3.0          -3.8
          IV              4.0          3.6         -0.5          4.5            2.5           0.5

      ANNUAL              4.0          4.9          0.9          2.5           -0.8          -1.5

2007       I              3.5          2.3         -1.1         r4.4           r1.9          r0.9
          II             r3.0         r1.9        r-1.1         r6.8           r4.0          r3.7
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                September 6, 2007
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

2005       I            189.8        169.7         89.4        161.4          120.3          85.0
          II            193.4        171.6         88.8        162.5          120.0          84.0
         III            196.5        174.5         88.8        165.2          120.4          84.1
          IV            200.7        180.5         89.9        163.6          118.2          81.5

      ANNUAL            195.1        174.1         89.2        163.2          119.7          83.6

2006       I            202.7        182.9         90.3        168.4          121.0          83.1
          II            205.5        187.1         91.1        165.7          117.7          80.7
         III            210.1        189.6         90.3        166.4          117.3          79.2
          IV            211.5        188.9         89.3        173.0          122.5          81.8

      ANNUAL            207.4        187.2         90.2        168.4          119.6          81.2

2007       I            212.3        188.7         88.9       r176.5         r123.8         r83.1
          II           r214.8       r191.8        r89.3       r177.3         r122.6         r82.5
--------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

2005       I              4.1          5.5          1.3          0.4           -1.5          -3.6
          II              7.7          4.7         -2.8          2.7           -1.2          -4.7
         III              6.6          6.8          0.2          7.0            1.4           0.4
          IV              8.9         14.5          5.2         -3.8           -7.0         -11.7

      ANNUAL              5.3          5.0         -0.3          3.8            0.5          -1.4

2006       I              3.9          5.5          1.5         12.1            9.9           7.9
          II              5.7          9.4          3.5         -6.1          -10.5         -11.2
         III              9.3          5.5         -3.5          1.7           -1.5          -6.9
          IV              2.7         -1.4         -4.1         16.6           19.1          13.5

      ANNUAL              6.3          7.5          1.1          3.2           -0.1          -2.9

2007       I              1.6         -0.5         -2.0         r8.5            4.5           6.9
          II              4.7         r6.8         r2.0         r1.7          r-4.1         r-2.8
--------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

2005       I              3.3          3.0         -0.3          6.0            2.9           2.6
          II              4.8          4.0         -0.8          4.4            1.5          -0.4
         III              6.2          5.1         -1.0          3.5           -0.2          -2.5
          IV              6.8          7.8          0.9          1.5           -2.1          -5.0

      ANNUAL              5.3          5.0         -0.3          3.8            0.5          -1.4

2006       I              6.8          7.8          1.0          4.3            0.6          -2.3
          II              6.3          9.0          2.6          2.0           -1.9          -4.0
         III              6.9          8.7          1.6          0.7           -2.6          -5.8
          IV              5.4          4.7         -0.7          5.7            3.6           0.3

      ANNUAL              6.3          7.5          1.1          3.2           -0.1          -2.9

2007       I              4.8          3.2         -1.5          4.9           r2.3           0.1
          II              4.5         r2.5        r-1.9         r7.0            4.1           2.3
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                September 6, 2007
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

2005       I            147.3        114.7         77.8        173.3          129.2         117.6
          II            149.1        115.1         77.2        176.1          130.0         118.1
         III            149.5        114.2         76.4        177.3          129.2         118.6
          IV            148.4        114.4         77.1        176.5          127.5         118.9

      ANNUAL            148.6        114.6         77.1        175.8          129.0         118.3

2006       I            149.8        116.3         77.6        178.3          128.2         119.0
          II            150.7        116.8         77.5        175.9          124.9         116.7
         III            151.6        117.9         77.8        176.4          124.3         116.4
          IV            152.0        117.1         77.0        180.5          127.9         118.8

      ANNUAL            151.0        117.0         77.5        177.8          126.3         117.7

2007       I            152.4        117.8         77.3       r184.8         r129.7        r121.2
          II           r151.9       r118.1         77.7       r187.9         r129.9        r123.7
--------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

2005       I              6.4          3.3         -2.9          1.8           -0.2          -4.3
          II              4.9          1.3         -3.4          6.5            2.5           1.6
         III              1.0         -3.0         -4.0          2.8           -2.6           1.7
          IV             -2.9          0.8          3.8         -1.9           -5.2           1.0

      ANNUAL              4.8          1.9         -2.7          4.8            1.4           0.0

2006       I              3.9          6.6          2.7          4.3            2.3           0.4
          II              2.4          1.7         -0.7         -5.4           -9.9          -7.6
         III              2.4          4.1          1.7          1.2           -2.0          -1.2
          IV              1.0         -2.9         -3.9          9.7           12.0           8.6

      ANNUAL              1.6          2.1          0.5          1.1           -2.1          -0.5

2007       I              1.2          2.6          1.4         r9.8           r5.7          r8.5
          II            r-1.4         r0.8          2.3         r6.8           r0.8          r8.4
--------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

2005       I              6.3          3.3         -2.8          5.9            2.8          -0.4
          II              5.8          2.5         -3.1          6.1            3.0           0.2
         III              4.7          1.2         -3.3          4.9            1.1           0.1
          IV              2.3          0.6         -1.7          2.3           -1.4           0.0

      ANNUAL              4.8          1.9         -2.7          4.8            1.4           0.0

2006       I              1.7          1.4         -0.3          2.9           -0.8           1.2
          II              1.1          1.5          0.4         -0.1           -3.9          -1.2
         III              1.4          3.3          1.8         -0.5           -3.8          -1.9
          IV              2.4          2.3         -0.1          2.3            0.3          -0.1

      ANNUAL              1.6          2.1          0.5          1.1           -2.1          -0.5

2007       I              1.7          1.3         -0.4         r3.6           r1.2          r1.9
          II             r0.8         r1.1          0.4         r6.8           r4.0          r6.0
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                September 6, 2007
r=revised                                                       Source: Bureau of Labor Statistics




Table 6. Nonfinancial corporate sector: 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

2005       I    140.3    164.6     117.3    158.0     117.8     112.6    111.5    112.3    151.9    115.9
          II    141.1    166.8     118.2    158.5     117.0     112.3    111.7    112.1    161.7    116.6
         III    140.5    166.9     118.8    160.8     117.1     114.4    115.1    114.6    147.5    117.6
          IV    141.4    169.2     119.7    161.8     116.9     114.5    112.8    114.0    159.5    118.1

      ANNUAL    140.8    166.9     118.5    159.8     117.2     113.5    112.8    113.3    155.2    117.0

2006       I    142.4    171.5     120.4    163.8     117.8     115.0    112.5    114.4    164.4    118.8
          II    141.8    171.5     120.9    163.9     116.4     115.6    114.3    115.2    164.8    119.7
         III    142.9    173.6     121.5    164.6     115.9     115.2    113.8    114.8    172.6    120.0
          IV    143.3    174.6     121.8    169.3     119.9     118.1    114.5    117.1    150.0    120.1

      ANNUAL    142.6    172.8     121.2    165.4     117.5     116.0    113.8    115.4    162.9    119.6

2007       I   r143.6   r175.0     121.9   r171.2    r120.1    r119.2   r114.6   r118.0   r154.3   r121.2
          II    144.8    177.0     122.2    173.1     119.7     119.5    114.3    118.1    157.5    121.7
----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

2005       I      0.3      0.3       0.1      2.7       0.7       2.4      6.8      3.6      9.8      4.3
          II      2.2      5.4       3.1      1.2      -2.6      -1.0      0.5     -0.6     28.4      2.5
         III     -1.6      0.4       2.0      6.1       0.5       7.8     12.7      9.1    -30.8      3.4
          IV      2.4      5.6       3.1      2.4      -1.0       0.0     -7.6     -2.1     36.9      1.8

      ANNUAL      1.1      2.7       1.6      3.8       0.5       2.7      3.0      2.8      7.0      3.3

2006       I      3.1      5.5       2.3      5.2       3.2       2.0     -1.0      1.2     12.7      2.6
          II     -1.8     -0.1       1.7      0.2      -4.6       2.0      6.4      3.1      1.2      2.9
         III      3.1      5.0       1.9      1.6      -1.5      -1.4     -1.5     -1.5     20.1      1.0
          IV      1.3      2.4       1.2     11.9      14.3      10.5      2.2      8.3    -42.9      0.3

      ANNUAL      1.3      3.5       2.2      3.5       0.2       2.2      0.9      1.9      5.0      2.2

2007       I     r0.7     r0.9       0.2     r4.5      r0.6      r3.8     r0.5      2.9    r11.8      3.9
          II      3.5      4.6       1.0      4.7      -1.2       1.1     -1.0      0.6      8.6      1.5
----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

2005       I      2.2      3.3       1.1      4.8       1.7       2.5      1.8      2.3     12.4      3.4
          II      1.6      3.3       1.7      3.7       0.7       2.1      2.1      2.1     10.9      3.1
         III     -0.1      1.5       1.7      3.8       0.1       4.0      5.4      4.3     -2.1      3.6
          IV      0.8      2.9       2.1      3.1      -0.6       2.3      2.8      2.4      7.5      3.0

      ANNUAL      1.1      2.7       1.6      3.8       0.5       2.7      3.0      2.8      7.0      3.3

2006       I      1.5      4.2       2.6      3.7       0.0       2.2      0.9      1.8      8.2      2.6
          II      0.5      2.8       2.3      3.4      -0.5       2.9      2.3      2.8      1.9      2.7
         III      1.7      4.0       2.3      2.3      -1.0       0.6     -1.1      0.2     17.0      2.1
          IV      1.4      3.2       1.8      4.6       2.6       3.2      1.5      2.7     -5.9      1.7

      ANNUAL      1.3      3.5       2.2      3.5       0.2       2.2      0.9      1.9      5.0      2.2

2007       I     r0.8     r2.1       1.3     r4.5      r2.0       3.6     r1.8     r3.2    r-6.1      2.0
          II      2.1      3.2       1.1      5.6       2.8       3.4      0.0      2.5     -4.4      1.7
----------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                        September 6, 2007
r=revised                                                               Source: Bureau of Labor Statistics








SOURCES:  Output data are from the Bureau of Economic Analysis and the Census 
Bureau of the U.S. Department of Commerce; the Bureau of Labor Statistics, 
U.S. Department of Labor; and the Federal Reserve Board.  Compensation and 
hours data are from the Bureau of Labor Statistics and the Bureau of Economic 
Analysis.

RELIABILITY:  Productivity and cost measures are regularly revised as more 
complete information becomes available.  The measures are first published 
within 40 days of the close of the reference period; revisions appear 30 days 
later, and second revisions after an additional 60 days.  In the business 
sector, the third publication (second revision) of a quarterly index of 
output per hour of all persons has differed from the initial value by between 
-1.6 and +1.4 index points approximately 95 percent of the time.  This 
interval is based on the performance of this measure between the fourth 
quarter of 1995 and the first quarter of 2007.


                              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 1978-2006 is based on the 
Consumer Price Index research series (CPI-U-RS).

(3)  Unit nonlabor payments include profits, consumption of fixed capital, 
taxes on production and imports less subsidies, net interest and 
miscellaneous payments, business current transfer payments, rental 
income of persons, and the current surplus of government enterprises.

(4)  Current dollar output divided by the output index.

(5)  Quarterly changes:  Percent change compounded at annual rate from the 
original data rather than index numbers.  Annual changes:  Percent 
change between annual average levels.

(6)  Unit nonlabor costs include consumption of fixed capital, taxes on 
production and imports less subsidies, net interest and miscellaneous 
payments, and business current transfer payments.

(7)  Total unit costs are the sum of unit labor and nonlabor costs.

(8)  Unit profits include corporate profits before tax with inventory 
valuation and capital consumption adjustments.