Economic News Release

Productivity and Costs News Release




Internet address: http://www.bls.gov/lpc/       USDL 08-1251
Historical, technical                           TRANSMISSION OF THIS
  information:  (202) 691-5606                  MATERIAL IS EMBARGOED
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Media contact:  (202) 691-5902                  THURSDAY, SEPTEMBER 4, 2008.



                        PRODUCTIVITY AND COSTS
                    Second Quarter 2008, 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 2008.  The seasonally adjusted annual 
rates of productivity change in the second quarter were:

                4.3 percent in the business sector and
                4.3 percent in the nonfarm business sector.

In both sectors, the second-quarter productivity gains were larger than the 
preliminary estimates reported on August 8.  

        In manufacturing, the revised productivity changes in the second quarter 
were:

               -2.2 percent in manufacturing,
               -4.5 percent in durable goods manufacturing, and
                0.2 percent in nondurable goods manufacturing.

        Manufacturing productivity decreased faster in the second quarter of 
2008 than was reported on August 8, reflecting downward revisions to output 
per hour in both durable and nondurable manufacturing.  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 August 8 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 2008 measures
(Seasonally adjusted annual rates)
------------------------------------------------------------------------------
                                                               Real
                                                     Hourly    hourly    Unit
                        Produc-                      compen-   compen-   labor
Sector                  tivity    Output   Hours     sation    sation    costs
------------------------------------------------------------------------------
                           Percent change from preceding quarter
                           
Business                 4.3       3.2    -1.0        4.0       -1.0     -0.4
Nonfarm business         4.3       3.4    -0.8        3.7       -1.3     -0.5
Manufacturing           -2.2      -3.7    -1.5        3.9       -1.1      6.2
  Durable               -4.5      -5.9    -1.5        4.1       -0.8      9.0
  Nondurable             0.2      -1.3    -1.6        3.3       -1.6      3.1
------------------------------------------------------------------------------
                           Percent change from same quarter a year ago
                           
Business                 3.2       2.2    -1.0        3.9       -0.4      0.7
Nonfarm business         3.4       2.2    -1.1        4.0       -0.2      0.6
Manufacturing            2.4      -0.2    -2.5        3.8       -0.4      1.4
  Durable                2.4       0.1    -2.3        3.4       -0.8      1.0
  Nondurable             2.5      -0.6    -3.0        4.5        0.2      1.9
------------------------------------------------------------------------------


Business

        Labor productivity in the business sector grew 4.3 percent from the 
first quarter to the second quarter of 2008, as output increased 3.2 percent 
and hours worked by all persons engaged in the sector--employees, 
proprietors, and unpaid family workers--fell 1.0 percent (seasonally adjusted 
annual rates).  Output per hour increased 3.2 percent over the past four 
quarters, reflecting a 2.2 percent increase in output and a 1.0 percent 
decrease in hours (tables A and 1).  The four-quarter decline in hours was 
the largest since a 1.3 percent decline for the period ending with the second 
quarter of 2003.
 
        Hourly compensation in the business sector grew at a 4.0 percent annual 
rate in the second quarter of 2008.  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, declined 1.0 percent in the second quarter of 2008 after 
falling 0.6 percent in the first quarter of the year.

        Unit labor costs, which reflect changes in hourly compensation and 
productivity, decreased 0.4 percent in the second quarter of 2008.  From the 
second quarter of 2007 to the second quarter of 2008 these costs increased 
0.7 percent.  The implicit price deflator for business output, which exhibits 
changes in unit labor costs and unit nonlabor payments, rose 0.9 percent in 
the second quarter of 2008.


Nonfarm business

        Productivity in the nonfarm business sector grew at a 4.3 percent annual 
rate in the second quarter of 2008, reflecting an increase of 3.4 percent in 
output and a decrease of 0.8 percent in hours of all persons (tables A and 
2).  From the second quarter of 2007 to the second quarter of 2008, nonfarm 
business productivity grew 3.4 percent, faster than the 2.5 percent average 
rate from 2000 to 2007.  Hours decreased 1.1 percent over the past four 
quarters--the largest four-quarter decline since a 2.1 percent decline for 
the period ending in the third quarter of 2002.

        Hourly compensation increased 3.7 percent in the second quarter of 2008, 
but when the 5.0 percent increase in consumer prices was taken into account, 
real hourly compensation declined 1.3 percent.

        Unit labor costs declined 0.5 percent in the second quarter of 2008, but 
rose 0.6 percent over the last four quarters.  The implicit price 
deflator for nonfarm business output rose 0.9 percent in the second quarter.


Manufacturing

        Productivity decreased 2.2 percent in manufacturing in the second 
quarter of 2008, as output fell 3.7 percent and hours of all persons fell 1.5 
percent (seasonally adjusted annual rates).  This was the largest quarterly 
decline in manufacturing productivity since a 2.5 percent decrease in the 
second quarter of 1989; it was concentrated in the durable goods sector, 
where productivity declined 4.5 percent.  In nondurable goods, productivity 
edged up 0.2 percent as output and hours fell 1.3 percent and 1.6 percent, 
respectively (tables A, 3, 4, and 5).  

        The hourly compensation of all manufacturing workers increased 3.9 
percent during the second quarter of 2008, reflecting increases in hourly 
compensation of 4.1 percent in durable goods industries and 3.3 percent in 
the nondurable goods sector.  Real hourly compensation in the total 
manufacturing sector fell 1.1 percent in the second quarter after consumer 
prices were taken into account.

        Unit labor costs in manufacturing increased 6.2 percent in the second 
quarter of 2008, as unit labor costs jumped 9.0 percent in durable goods 
industries and increased 3.1 percent in nondurable goods industries.


Nonfinancial corporations

        Preliminary second-quarter 2008 measures of productivity and costs were 
reported today for nonfinancial corporations.  Productivity increased 5.6 
percent during the second quarter, reflecting a 3.8 percent rise in output 
and a 1.7 percent fall in employee hours (tables B and 6).   Over the last 
four quarters output per hour increased 2.3 percent, output increased 1.7 
percent, and hours worked declined 0.5 percent--the first decline in hours 
since the four quarters ending with fourth-quarter 2003, when hours declined 
0.9 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 2008 
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

2008 II   5.6      3.8    -1.7     3.7     -1.2     -1.8    -24.7       -3.6
------------------------------------------------------------------------------
                    Percent change from same quarter a year ago

2008 II   2.3      1.7    -0.5     3.8     -0.4      1.5    -18.8       -0.9
------------------------------------------------------------------------------


        Hourly compensation rose 3.7 percent in the second quarter of 2008, but 
when the rise in consumer prices is taken into account, real hourly 
compensation fell 1.2 percent.  Unit labor costs for nonfinancial 
corporations decreased 1.8 percent in the second quarter of 2008.  

        Unit profits fell 24.7 percent in the second quarter of 2008.  This was 
the fourth consecutive double-digit decline in this measure (table 6).  The 
implicit price deflator for nonfinancial corporate output fell 3.6 percent in 
the second quarter and 0.9 percent over the past four quarters.  


Revised Measures

        Current and previous measures for the first and second quarters of 2008 
for the business, nonfarm business, and manufacturing sectors are compared in 
table C.

        In the second quarter of 2008, productivity was revised up in the 
business and nonfarm business sectors, as output was revised up significantly 
and hours decreased more than previously reported.  In both of these sectors 
the upward revisions to productivity were much larger than those to hourly 
compensation, and unit labor costs were revised down.

        Productivity was revised down in the manufacturing sector in the second 
quarter of 2008 due to both a downward revision to output and an upward 
revision to hours.  The downward revision to productivity was largely offset 
by a downward revision to hourly compensation, so unit labor costs rose only 
slightly more than 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 2008
        
Business:                                               
  Previous               2.3       1.5     -0.7        3.8      -1.2      1.5
  Revised                4.3       3.2     -1.0        4.0      -1.0     -0.4
Nonfarm business:                                               
  Previous               2.2       1.7     -0.5        3.6      -1.4      1.3
  Revised                4.3       3.4     -0.8        3.7      -1.3     -0.5
Manufacturing:                                          
  Previous              -1.4      -3.5     -2.0        4.6      -0.4      6.1
  Revised               -2.2      -3.7     -1.5        3.9      -1.1      6.2
  
                                    First quarter 2008
        
Business:                                               
  Previous               2.2       0.7     -1.5        5.0       0.6      2.7
  Revised                2.3       0.7     -1.6        3.6      -0.6      1.3
Nonfarm business:                                               
  Previous               2.6       0.9     -1.6        5.2       0.8      2.5
  Revised                2.6       0.9     -1.7        3.8      -0.4      1.2
Manufacturing:                                           
  Previous               3.4      -0.8     -4.0        6.2       1.8      2.8
  Revised                3.3      -0.9     -4.0        3.8      -0.5      0.5
------------------------------------------------------------------------------


        In the first quarter of 2008, hourly compensation was updated to reflect 
revised estimates of compensation released by the Bureau of Economic Analysis 
of the U.S. Department of Commerce August 28.  As revised, hourly 
compensation increased 3.6 percent in the business sector, and 3.8 percent in 
both the nonfarm business and manufacturing sectors.  In all of the major 
sectors, hourly compensation grew more slowly in the first quarter than BLS 
reported August 8, therefore unit labor costs in these sectors rose less than 
in preliminary estimates.  


Revised Measures: Nonfinancial Corporations

        Data for the first quarter of 2008 were also revised for the 
nonfinancial corporate sector (table D).  Productivity was revised down along 
with output; hours were not revised.  Hourly compensation was revised down 
more than productivity; revised unit labor costs increased 3.2 percent, 
rather than 3.9 percent as reported August 8.  


------------------------------------------------------------------------------
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 2008
        
Previous  1.0     -0.1    -1.1     4.9      0.6     3.9     -14.7       0.5
Revised  -0.2     -1.4    -1.1     2.9     -1.3     3.2     -13.6       0.5
------------------------------------------------------------------------------



                                Next release date


        The next release of Productivity and Costs is scheduled for 8:30 AM EST, 
Thursday, November 6, 2008.  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.  
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 a chain-type, current-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 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 
manufacturing; 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 a chain-type, current-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

2006       I    r136.1      162.8    r119.6    r168.0      r120.7     r123.5      r133.4      127.2
          II    r136.6      164.0    r120.1    r168.1      r119.7     r123.1      r136.2      128.0
         III    r135.9      164.1    r120.8    r169.0      r119.1     r124.3      r136.2      128.8
          IV    r135.9      164.8    r121.2    r172.6      r122.1     r127.0      r133.4      129.4

      ANNUAL    r136.1      163.9    r120.4    r169.5      r120.4     r124.5      r134.8      128.3

2007       I    r135.9      164.5    r121.0    r174.7      r122.4      128.5       134.3      130.7
          II    r137.6      166.8    r121.2    r175.5      r121.6     r127.5      r137.4      131.2
         III    r139.7      169.0    r121.0    r177.0      r121.9     r126.7      r139.7      131.6
          IV    r139.7      168.8    r120.8    r178.9      r121.7     r128.1      r139.2      132.2

      ANNUAL     138.2      167.3     121.0     176.5       121.9      127.7       137.7      131.4

2008       I     140.5      169.1     120.3    r180.6      r121.5     r128.5      r140.2      132.9
          II    r142.0     r170.4    r120.0    r182.3      r121.2     r128.4      r141.3     r133.2
---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

2006       I       2.6        5.6       3.0       5.5         3.6        2.8         3.1        3.0
          II       1.4        2.9       1.5       0.2        -3.3       -1.2         8.6        2.6
         III      -2.0        0.3       2.4       2.0        -1.9        4.1        -0.1        2.4
          IV       0.2        1.7       1.5       9.0       r10.6        8.8        -8.0        1.9

      ANNUAL       0.9        3.0       2.1       3.8         0.5        2.9         3.3        3.0

2007       I     r-0.1       -0.7     r-0.6       4.8         1.1        4.8         2.8        4.0
          II       5.0        5.6       0.6       1.9        -2.6       -2.9         9.6        1.7
         III       6.2        5.5      -0.7       3.6         0.8      r-2.5         6.9        1.1
          IV       0.1       -0.6      -0.7       4.4        -0.6        4.3        -1.6        2.0

      ANNUAL       1.5        2.0       0.5       4.2         1.3        2.6         2.1        2.4

2008       I      r2.3        0.7     r-1.6      r3.6       r-0.6       r1.3        r3.1        2.0
          II      r4.3       r3.2     r-1.0      r4.0       r-1.0      r-0.4        r3.0       r0.9
---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

2006       I       1.3        3.6       2.3      r4.3         0.5        2.9         3.9        3.3
          II       1.7        3.5       1.8       4.0         0.1        2.3         5.2        3.4
         III       0.2        2.4       2.2       2.9        -0.4        2.7         3.5        3.0
          IV       0.5        2.6       2.1       4.1         2.1        3.6         0.7        2.5

      ANNUAL       0.9        3.0       2.1       3.8         0.5        2.9         3.3        3.0

2007       I      -0.1        1.0       1.2       3.9         1.5        4.1         0.7        2.7
          II      r0.7        1.7      r1.0       4.4         1.7        3.6         0.9        2.5
         III       2.8        3.0       0.2       4.8         2.4        1.9         2.6        2.2
          IV       2.8        2.4     r-0.3       3.7        -0.3        0.9         4.3        2.2

      ANNUAL       1.5        2.0       0.5       4.2         1.3        2.6         2.1        2.4

2008       I       3.4        2.8      -0.6      r3.4       r-0.7       r0.0        r4.4        1.7
          II      r3.2       r2.2     r-1.0      r3.9       r-0.4       r0.7        r2.8       r1.5
---------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                       September 4, 2008
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

2006       I    r135.1      163.2    r120.8    r166.8      r119.8     r123.5      r135.5      127.9
          II    r135.7      164.3    r121.1    r167.1      r118.9     r123.2      r138.6      128.8
         III    r135.0      164.4    r121.8    r167.9      r118.3     r124.4      r138.3      129.5
          IV    r135.0      165.0    r122.2    r171.7      r121.4     r127.1      r134.8      130.0

      ANNUAL    r135.2      164.2    r121.5    r168.4      r119.6     r124.6      r136.8      129.1

2007       I    r135.0      164.7    r122.0    r173.7      r121.8      128.7      r135.2      131.1
          II    r136.4      167.0    r122.4    r174.1      r120.7     r127.7      r138.2      131.5
         III    r138.3      169.2    r122.3    r175.5      r120.8     r126.9      r140.3      131.8
          IV    r138.6      168.9    r121.9    r177.8      r120.9     r128.3      r139.8      132.5

      ANNUAL     137.1      167.5     122.2     175.3       121.1      127.9       138.4      131.7

2008       I     139.5      169.3     121.4    r179.5      r120.8     r128.7      r141.0      133.2
          II    r141.0     r170.7    r121.1    r181.1      r120.4     r128.5      r142.2     r133.5
---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

2006       I       2.5        6.0       3.3       5.2         3.3        2.6         3.9        3.1
          II       1.8        2.9       1.1       0.7        -2.8       -1.1         9.4        2.9
         III      -2.1        0.3       2.4      r1.9        -2.0        4.1        -0.9        2.1
          IV       0.2        1.4       1.2      r9.3        11.0        9.1        -9.5        1.5

      ANNUAL       1.0        3.2       2.2       3.8         0.5        2.8         3.6        3.1

2007       I       0.0       -0.9     r-0.8       4.9         1.2        4.9         0.9        3.4
          II       4.1        5.8       1.6       0.8        -3.6       -3.2         9.4        1.5
         III       5.8        5.5      -0.3       3.3         0.5       -2.4         6.3        0.9
          IV       0.8       -0.7      -1.6      r5.3        r0.3        4.5       r-1.5        2.1

      ANNUAL       1.4        2.0       0.5       4.1         1.3        2.7         1.2        2.1

2008       I       2.6        0.9     r-1.7      r3.8       r-0.4       r1.2        r3.6        2.1
          II      r4.3       r3.4     r-0.8      r3.7       r-1.3      r-0.5        r3.3       r0.9
---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

2006       I       1.3        3.7       2.4       4.2         0.5        2.9         4.3        3.4
          II       1.7        3.7       2.0       3.9         0.0        2.2         5.9        3.6
         III       0.3        2.6       2.3       2.9        -0.5        2.6         3.8        3.1
          IV       0.6        2.6       2.0       4.3         2.2        3.6         0.5        2.4

      ANNUAL       1.0        3.2       2.2       3.8         0.5        2.8         3.6        3.1

2007       I       0.0        0.9      r1.0       4.2         1.7        4.2        -0.2        2.5
          II       0.5        1.6       1.1       4.2         1.5        3.7        -0.2        2.1
         III       2.5        2.9       0.4      r4.5        r2.1        2.0         1.5        1.8
          IV       2.7        2.4      -0.3       3.6        -0.4        0.9         3.7        2.0

      ANNUAL       1.4        2.0       0.5       4.1         1.3        2.7         1.2        2.1

2008       I       3.3        2.8      -0.5      r3.3       r-0.8       r0.0        r4.3        1.6
          II      r3.4       r2.2     r-1.1      r4.0       r-0.2       r0.6        r2.9       r1.5
---------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                       September 4, 2008
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

2006       I            172.6        147.2         85.3        170.9          122.7          99.0
          II            172.7        147.4         85.4        169.5          120.7          98.2
         III            174.5        148.0         84.8        170.3          120.0          97.6
          IV            175.4        147.4         84.0        174.6          123.5          99.5

      ANNUAL            173.8        147.5         84.9        171.3          121.7          98.6

2007       I            177.0        147.8         83.5        176.9          124.0         100.0
          II            178.7        149.6         83.7        176.4          122.3          98.7
         III            180.6        151.2         83.7        176.4          121.4          97.6
          IV            182.5        151.0         82.8        179.7          122.2          98.5

      ANNUAL            179.7        149.9         83.4        177.3          122.5          98.7

2008       I           r184.0       r150.7         81.9       r181.4         r122.1         r98.6
          II           r183.0       r149.3        r81.6       r183.1         r121.7        r100.1
--------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

2006       I             -0.6          1.8          2.4         14.3           12.3          15.0
          II              0.2          0.6          0.4         -3.1           -6.5          -3.3
         III              4.3          1.6         -2.5          1.8           -2.1          -2.3
          IV              2.2         -1.7         -3.8         10.4           12.1           8.0

      ANNUAL              1.1          1.8          0.8          4.1            0.8           3.0

2007       I              3.6          1.2         -2.3          5.5            1.8           1.8
          II              3.8          4.9          1.0         -1.1           -5.5          -4.8
         III              4.5          4.3         -0.2         -0.1           -2.8          -4.4
          IV              4.2         -0.4         -4.4          7.8            2.7           3.4

      ANNUAL              3.4          1.6         -1.7          3.5            0.7           0.1

2008       I             r3.3        r-0.9         -4.0         r3.8          r-0.5          r0.5
          II            r-2.2        r-3.7        r-1.5         r3.9          r-1.1          r6.2
--------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

2006       I              1.5          2.4          0.9          5.4            1.6           3.8
          II              0.4          2.1          1.7          3.3           -0.6           2.9
         III              0.9          2.3          1.4          2.3           -1.0           1.4
          IV              1.5          0.6         -0.9          5.6            3.6           4.1

      ANNUAL              1.1          1.8          0.8          4.1            0.8           3.0

2007       I              2.6          0.4         -2.1          3.5            1.1           0.9
          II              3.5          1.5         -1.9          4.1            1.4           0.6
         III              3.5          2.1         -1.3          3.6            1.2           0.0
          IV              4.0          2.5         -1.5          2.9           -1.0          -1.1

      ANNUAL              3.4          1.6         -1.7          3.5            0.7           0.1

2008       I             r3.9         r1.9         -1.9         r2.5          r-1.6         r-1.4
          II             r2.4        r-0.2        r-2.5         r3.8          r-0.4          r1.4
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                September 4, 2008
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

2006       I            198.8        179.6         90.3        166.0          119.2          83.5
          II            198.9        180.5         90.7        164.6          117.1          82.7
         III            201.7        181.1         89.8        165.3          116.5          81.9
          IV            202.4        180.1         89.0        170.2          120.4          84.1

      ANNUAL            200.4        180.3         90.0        166.5          118.3          83.1

2007       I            204.4        180.3         88.2        173.0          121.3          84.7
          II            207.9        183.9         88.4        172.5          119.6          83.0
         III            210.9        186.9         88.6        172.2          118.6          81.7
          IV            214.3        187.0         87.3        175.5          119.4          81.9

      ANNUAL            209.4        184.5         88.1        173.3          119.7          82.8

2008       I           r215.4       r186.8         86.7       r176.6         r118.9         r82.0
          II           r213.0       r184.0        r86.4       r178.4         r118.6         r83.8
--------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

2006       I             -1.8          0.4          2.3         13.7           11.7          15.9
          II              0.3          2.1          1.8         -3.3           -6.6          -3.6
         III              5.7          1.2         -4.3          1.6           -2.3          -3.9
          IV              1.4         -2.1         -3.4         12.6           14.4          11.1

      ANNUAL              2.2          3.3          1.1          3.9            0.6           1.7

2007       I              3.9          0.4         -3.4          6.7            3.0           2.7
          II              7.1          8.2          1.0         -1.2           -5.5          -7.7
         III              6.0          6.8          0.8         -0.7           -3.3          -6.2
          IV              6.6          0.3         -6.0          7.9            2.8           1.2

      ANNUAL              4.5          2.3         -2.0          4.1            1.3          -0.3

2008       I             r2.0        r-0.5         -2.5         r2.5          r-1.7          r0.4
          II            r-4.5        r-5.9        r-1.5         r4.1          r-0.8          r9.0
--------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

2006       I              3.2          4.8          1.6          4.9            1.1           1.6
          II              2.0          4.6          2.5          3.1           -0.8           1.1
         III              2.2          3.6          1.4          1.9           -1.5          -0.4
          IV              1.4          0.4         -1.0          5.9            3.9           4.5

      ANNUAL              2.2          3.3          1.1          3.9            0.6           1.7

2007       I              2.8          0.4         -2.4          4.3            1.8           1.4
          II              4.5          1.8         -2.5          4.8            2.1           0.3
         III              4.6          3.2         -1.3          4.2            1.8          -0.3
          IV              5.9          3.9         -1.9          3.1           -0.8          -2.6

      ANNUAL              4.5          2.3         -2.0          4.1            1.3          -0.3

2008       I              5.4          3.6         -1.7         r2.1          r-2.0         r-3.2
          II             r2.4         r0.1        r-2.3         r3.4          r-0.8          r1.0
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                September 4, 2008
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

2006       I            148.0        115.0         77.7        178.0          127.8         120.2
          II            148.4        114.8         77.3        176.6          125.7         119.0
         III            149.0        115.4         77.4        177.8          125.3         119.3
          IV            150.3        115.1         76.6        180.4          127.6         120.0

      ANNUAL            148.9        115.1         77.2        178.2          126.6         119.6

2007       I            151.2        115.6         76.5        181.9          127.5         120.3
          II            151.4        116.0         76.6        181.4          125.8         119.9
         III            152.7        116.4         76.3        181.8          125.2         119.1
          IV            152.9        116.1         75.9        185.3          126.0         121.2

      ANNUAL            152.0        116.0         76.3        182.6          126.1         120.1

2008       I           r155.0       r115.7         74.6       r188.0         r126.5        r121.3
          II           r155.1       r115.3        r74.4       r189.6         r126.0        r122.2
--------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

2006       I              1.0          3.6          2.6         15.5           13.4          14.4
          II              1.1         -0.9         -1.9         -3.1           -6.5          -4.1
         III              1.5          2.2          0.6          2.6           -1.4           1.1
          IV              3.5         -1.1         -4.4          6.1            7.7           2.5

      ANNUAL              0.2          0.3          0.1          4.5            1.1           4.3

2007       I              2.5          2.0         -0.5          3.3           -0.3           0.8
          II              0.4          1.3          0.9         -1.0           -5.3          -1.4
         III              3.5          1.6         -1.9          0.7           -2.0          -2.7
          IV              0.6         -1.1         -1.7          7.9            2.8           7.3

      ANNUAL              2.1          0.9         -1.2          2.5           -0.3           0.4

2008       I             r5.7        r-1.3         -6.7         r6.0           r1.7          r0.3
          II             r0.2         -1.3        r-1.6         r3.3          r-1.6          r3.1
--------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

2006       I              0.2         -0.1         -0.3          6.2            2.4           6.0
          II             -0.7         -0.6          0.1          3.5           -0.4           4.2
         III             -0.4          1.0          1.4          3.1           -0.2           3.6
          IV              1.8          0.9         -0.8          5.1            3.0           3.2

      ANNUAL              0.2          0.3          0.1          4.5            1.1           4.3

2007       I              2.1          0.5         -1.6          2.2           -0.2           0.0
          II              2.0          1.1         -0.9          2.7            0.1           0.7
         III              2.5          0.9         -1.5          2.3           -0.1          -0.2
          IV              1.7          0.9         -0.8          2.7           -1.2           1.0

      ANNUAL              2.1          0.9         -1.2          2.5           -0.3           0.4

2008       I             r2.5          0.1         -2.4         r3.4          r-0.8          r0.8
          II             r2.5        r-0.6        r-3.0         r4.5           r0.2          r1.9
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                September 4, 2008
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

2006       I    146.3    176.2     120.4    164.5     118.1     112.4    112.9    112.5    182.5    118.8
          II    146.0    176.5     120.9    164.5     117.0     112.6    114.4    113.1    183.1    119.4
         III    147.0    178.5     121.5    165.1     116.3     112.3    114.2    112.8    193.0    120.0
          IV    146.0    177.8     121.8    167.8     118.7     114.9    116.2    115.3    173.9    120.5

      ANNUAL    146.3    177.3     121.1    165.5     117.5     113.1    114.4    113.4    183.1    119.7

2007       I    146.2    177.8     121.7    170.3     119.4     116.5    117.2    116.7    171.8    121.6
          II    147.4    179.7     121.9    171.3     118.7     116.2    117.4    116.5    172.5    121.5
         III    148.1    180.9     122.1    172.5     118.7     116.5    117.8    116.8    166.8    121.3
          IV    148.8    181.7     122.1    175.0     119.0     117.6    118.9    117.9    155.9    121.3

      ANNUAL    147.6    180.0     122.0    172.3     119.0     116.7    117.9    117.0    166.7    121.4

2008       I   r148.7   r181.1     121.8   r176.2    r118.6    r118.5   r119.0   r118.6   r150.3    121.5
          II    150.8    182.8     121.3    177.9     118.2     118.0    119.7    118.4    140.0    120.4
----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

2006       I      4.4      7.0       2.4      8.3       6.3       3.7     -0.6      2.5     12.1      3.7
          II     -0.9      0.8       1.7      0.0      -3.5       0.9      5.3      2.1      1.4      2.0
         III      2.7      4.7       1.9      1.5      -2.5      -1.2     -0.5     -1.0     23.3      2.1
          IV     -2.6     -1.6       1.0      6.9       8.5       9.7      6.9      9.0    -34.1      1.7

      ANNUAL      2.1      4.4       2.2      3.6       0.3       1.5      1.4      1.4     12.2      2.8

2007       I      0.4      0.0      -0.3      6.1       2.4       5.7      3.6      5.1     -4.7      3.8
          II      3.4      4.3       0.8      2.2      -2.3      -1.2      0.8     -0.7      1.7     -0.4
         III      1.8      2.6       0.7      2.8       0.1       1.0      1.3      1.0    -12.5     -0.8
          IV      1.9      1.9       0.0      5.9       0.9       3.9      3.9      3.9    -23.7      0.2

      ANNUAL      0.9      1.6       0.7      4.1       1.3       3.2      3.0      3.2     -9.0      1.5

2008       I    r-0.2    r-1.4      -1.1     r2.9     r-1.3      r3.2     r0.3     r2.4   r-13.6      0.5
          II      5.6      3.8      -1.7      3.7      -1.2      -1.8      2.4     -0.7    -24.7     -3.6
----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

2006       I      3.2      5.9       2.6      4.1       0.4       0.9      1.4      1.0     17.1      3.0
          II      1.6      3.9       2.3      3.7      -0.2       2.0      2.7      2.2      9.8      3.2
         III      2.9      5.2       2.2      2.6      -0.7      -0.3     -1.3     -0.6     26.8      2.6
          IV      0.9      2.7       1.8      4.1       2.1       3.2      2.7      3.1     -2.0      2.4

      ANNUAL      2.1      4.4       2.2      3.6       0.3       1.5      1.4      1.4     12.2      2.8

2007       I     -0.1      1.0       1.1      3.6       1.1       3.7      3.8      3.7     -5.9      2.4
          II      1.0      1.8       0.8      4.1       1.4       3.1      2.7      3.0     -5.8      1.8
         III      0.7      1.3       0.6      4.5       2.1       3.7      3.1      3.6    -13.6      1.1
          IV      1.9      2.2       0.3      4.3       0.3       2.3      2.4      2.3    -10.3      0.7

      ANNUAL      0.9      1.6       0.7      4.1       1.3       3.2      3.0      3.2     -9.0      1.5

2008       I     r1.7     r1.8       0.1     r3.5     r-0.7      r1.7     r1.6      1.7   r-12.5     -0.1
          II      2.3      1.7      -0.5      3.8      -0.4       1.5      2.0      1.7    -18.8     -0.9
----------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                        September 4, 2008
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 
-1.5 and +1.3 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 2008.


                          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 1978-2007 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 is 
calculated using index numbers to three decimal places.  Indexes 
published in the news release are rounded to one decimal place for 
convenience.  Annual changes:  Percent change is calculated using annual 
average indexes to three decimal places.

(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.  



Last Modified Date: September 04, 2008
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