Productivity and Costs News Release


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                                PRODUCTIVITY AND COSTS
                           Third Quarter 2008, preliminary


        The Bureau of Labor Statistics of the U.S. Department of Labor today 
reported preliminary productivity data--as measured by output per hour of all 
persons--for the third quarter of 2008.  The preliminary seasonally-adjusted 
annual rates of productivity growth in the third quarter were:

        1.3 percent in the business sector and
        1.1 percent in the nonfarm business sector.
        
In both sectors, productivity gains were smaller than in the first two 
quarters of 2008, and were the result of hours at work falling faster than 
output. (See table A)
.
        In manufacturing, productivity changes in the third quarter were:
        
        -1.0 percent in manufacturing,
         3.3 percent in durable goods manufacturing, and
        -7.3 percent in nondurable goods manufacturing.
        
        
        Manufacturing productivity fell for the second consecutive quarter; the 
third-quarter decline was concentrated in the nondurable goods sector, 
whereas the second-quarter decrease was due to a drop in durable goods 
productivity.  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.  
Third-quarter measures are summarized in table A and appear in detail in 
tables 1 through 5.

        The data sources and methods used in the preparation of the 
manufacturing series differ from those used in preparing the business and 
nonfarm business series, and these measures are not directly comparable.  
Output measures for business and nonfarm business are based on measures of 
gross domestic product prepared by the Bureau of Economic Analysis of the 
U.S. Department of Commerce.  Quarterly output measures for manufacturing 
reflect indexes of industrial production independently prepared by the Board 
of Governors of the Federal Reserve System.  See Technical Notes for further 
information on data sources.

                                                
------------------------------------------------------------------------------
Table A. Productivity and costs: Preliminary third-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                  1.3      -1.5     -2.8        4.7     -1.9      3.4
Nonfarm business          1.1      -1.7     -2.7        4.7     -1.9      3.6
Manufacturing            -1.0      -5.8     -4.9        5.0     -1.6      6.1
  Durable                 3.3      -4.7     -7.7        6.0     -0.7      2.6
  Nondurable             -7.3      -7.0      0.4        3.7     -2.9     11.8
------------------------------------------------------------------------------  
                        Percent change from same quarter a year ago
                
Business                  1.8       0.3     -1.5        4.1     -1.1      2.3
Nonfarm business          2.0       0.3     -1.7        4.3     -0.9      2.3
Manufacturing             1.1      -2.6     -3.7        5.1     -0.2      3.9
  Durable                 1.9      -2.6     -4.4        5.1     -0.2      3.1
  Nondurable             -0.2      -2.7     -2.5        5.3      0.0      5.5
------------------------------------------------------------------------------

  
Business

        Business sector output per hour grew 1.3 percent in the 
third quarter of 2008 as output decreased 1.5 percent and hours 
worked by all persons--employees, proprietors, and unpaid family 
workers--fell 2.8 percent (seasonally adjusted annual rates).  
The decline in output was the largest since the third quarter of 
2001, when output fell 3.1 percent.  Hours had not dropped as 
much in one quarter since the first quarter of 2002, (-3.1 
percent).  From the third quarter of 2007 to the third quarter of 
2008, productivity increased 1.8 percent; output edged up 0.3 
percent and hours decreased 1.5 percent in the business sector.

        Hourly compensation in the business sector increased at an 
annual rate of 4.7 percent during the third quarter of 2008. This 
measure includes wages and salaries, supplements, employer 
contributions to employee benefit plans, and taxes.  Real hourly 
compensation, which takes into account changes in consumer 
prices, decreased by 1.9 percent in the third quarter of 2008.

        Changes in unit labor costs approximate the change in hourly 
compensation less the change in productivity.  In the third 
quarter of 2008, unit labor costs rose at a 3.4 percent annual 
rate.  The implicit price deflator for business sector output, 
which reflects changes in both unit labor cost and unit nonlabor 
payments, rose 4.5 percent in the third quarter of 2008.


Nonfarm business

        Productivity increased 1.1 percent in the nonfarm business 
sector in the third quarter of 2008; output and hours fell 1.7 
percent and 2.7 percent, respectively.  The decline in output was 
the largest since third-quarter 2001 (-2.9 percent), and the drop 
in hours was the largest since the first quarter of 2002 (-3.4 
percent).  Over the last four quarters, nonfarm business output 
per hour increased 2.0 percent; output rose 0.3 percent, and 
hours fell 1.7 percent.  From 2000 to 2007, nonfarm productivity 
increased at a 2.5 percent average annual rate, as output grew 
2.5 percent and hours edged up 0.1 percent on average.

        Nonfarm hourly compensation increased at a 4.7 percent 
annual rate in the third quarter of 2008.  Real hourly 
compensation decreased 1.9 percent in the third quarter, as 
consumer prices increased 6.7 percent (seasonally adjusted annual 
rates). 

        Unit labor costs in the nonfarm business sector increased 
3.6 percent during the third quarter of 2008 and 2.3 percent over 
the last four quarters.  The implicit price deflator for nonfarm 
business output increased 5.0 percent in the third quarter of 
2008.

  
Manufacturing

        Manufacturing output per hour decreased 1.0 percent in the 
third quarter of 2008; output fell 5.8 percent and hours of all 
persons declined 4.9 percent (seasonally adjusted annual rates).  
Productivity increased 3.3 percent in durable goods industries as 
the 4.7 percent decline in output was outpaced by a 7.7 percent 
decline in hours.  By contrast, productivity declined 7.3 percent 
in the nondurable goods sector in the third quarter as output 
fell 7.0 percent while hours increased 0.4 percent.  Total 
manufacturing productivity grew 1.1 percent from the third 
quarter of 2007 to the third quarter of 2008, compared to a 3.7 
percent average annual growth rate from 2000 to 2007.

        Hourly compensation of manufacturing workers increased 5.0 
percent during the third quarter of 2008, reflecting a 6.0 
percent gain in the durable goods subsector and a 3.7 percent 
gain in nondurable goods industries.  Real hourly compensation 
for total manufacturing decreased 1.6 percent in the third 
quarter.

        Unit labor costs in manufacturing rose 6.1 percent in the 
third quarter of 2008, reflecting a 2.6 percent increase in 
durable goods industries and an 11.8 percent jump in nondurable 
goods industries.  Total manufacturing sector unit labor costs 
have increased 3.9 percent since the third quarter of 2007.

  
Revised Measures

        Revised and previous measures for the second quarter of 
2008, for the business, nonfarm business, and manufacturing 
sectors are compared in table B.  Hours declined at the same 
rates reported September 4 in all sectors.  In the business and 
nonfarm business sectors output was revised downward, resulting 
in a corresponding downward revision to productivity.  In the 
manufacturing sector productivity change, while negative, was 
revised up due to a small upward revision to output.

                                                
------------------------------------------------------------------------------
Table B. Previous and revised productivity and related measures
Quarterly percent change at seasonally adjusted annual rate
------------------------------------------------------------------------------
                                                               Real
                                                     Hourly    hourly    Unit
                        Produc-                      compen-   compen-   labor
Sector                  tivity    Output   Hours     sation    sation    costs
-------------------------------------------------------------------------------
                                Second quarter 2008
                                
Business:                                               
  Previous                4.3      3.2     -1.0       4.0       -1.0     -0.4
  Revised                 3.7      2.6     -1.0       3.8       -1.2      0.1
Nonfarm business:                                               
  Previous                4.3      3.4     -0.8       3.7       -1.3     -0.5
  Revised                 3.6      2.8     -0.8       3.5       -1.4     -0.1
Manufacturing:                                          
  Previous               -2.2     -3.7     -1.5       3.9       -1.1      6.2
  Revised                -1.9     -3.4     -1.5       3.8       -1.2      5.8
-------------------------------------------------------------------------------


        In all three sectors, hourly compensation was revised down 
slightly.  In the business and nonfarm business sectors, unit 
labor costs were revised upwards--this was the result of 
productivity being revised down more than hourly compensation.  
In manufacturing both the upward revision to productivity and the 
downward revision to hourly compensation contributed to a 
downward revision to unit labor costs. 


Revised measures: Nonfinancial Corporations 

        Productivity and cost measures for nonfinancial corporations 
for the second quarter of 2008 also were revised.  Revised 
productivity growth was 8.6 percent due to an upward revision in 
output; hours were virtually unchanged (table C).  Productivity 
grew 3.0 percent in the sector when measured over the four 
quarters ending with the second quarter (table 6).  

                                                                
------------------------------------------------------------------------------
Table C.  Nonfinancial corporations: Previous and revised productivity and 
cost measures
Quarterly percent changes at seasonally adjusted annual rates
------------------------------------------------------------------------------
                                           Real
                                  Hourly   hourly   Unit              Implicit
         Produc-                  compen-  compen-  labor   Unit      price
         tivity   Output  Hours   sation   sation   costs   profits   deflator
------------------------------------------------------------------------------                                                          
                                Second quarter 2008
                                
Previous  5.6      3.8    -1.7     3.7      -1.2    -1.8    -24.7       -3.6
Revised   8.6      6.9    -1.6     3.7      -1.3    -4.6     -8.4       -3.9
------------------------------------------------------------------------------


        Unit labor costs were revised down from -1.8 percent to -4.6 
percent--the result of productivity being revised up while hourly 
compensation remained unrevised.



        
                             Next release date
                             
                             
        The next release of Productivity and Costs is scheduled for 
8:30 AM EST, Wednesday, December 3, 2008.  It will present third-
quarter measures for nonfinancial corporations and revised third-
quarter measures for business, nonfarm business, and 
manufacturing.
        

       
       
			       TECHNICAL NOTES

Labor Hours: Hours data for the labor productivity and cost measures include 
hours for all persons working in the sectorówage 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     136.1      162.8     119.6     168.0       120.7      123.5       133.4      127.2
          II     136.6      164.0     120.1     168.1       119.7      123.1       136.2      128.0
         III     135.9      164.1     120.8     169.0       119.1      124.3       136.2      128.8
          IV     135.9      164.8     121.2     172.6       122.1      127.0       133.4      129.4

      ANNUAL     136.1      163.9     120.4     169.5       120.4      124.5       134.8      128.3

2007       I     135.9      164.5     121.0     174.7       122.4      128.5       134.3      130.7
          II     137.6      166.8     121.2     175.5       121.6      127.5       137.4      131.2
         III     139.7      169.0     121.0     177.0       121.9      126.7       139.7      131.6
          IV     139.7      168.8     120.8     178.9       121.7      128.1       139.2      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     180.6       121.5      128.5       140.2      132.9
          II    r141.8     r170.2    r120.0    r182.2      r121.2     r128.6      r140.9     r133.2
         III     142.2      169.5     119.2     184.3       120.6      129.6       143.1      134.7
---------------------------------------------------------------------------------------------------------
                       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        10.6        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      -0.1       -0.7      -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       -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       2.3        0.7      -1.6       3.6        -0.6        1.3         3.1        2.0
          II      r3.7       r2.6      -1.0      r3.8       r-1.2       r0.1        r2.0        0.9
         III       1.3       -1.5      -2.8       4.7        -1.9        3.4         6.3        4.5
---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

2006       I       1.3        3.6       2.3       4.3         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       0.7        1.7       1.0       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      -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       3.4        -0.7        0.0         4.4        1.7
          II      r3.0       r2.0      -1.0       3.9        -0.4       r0.8        r2.6        1.5
         III       1.8        0.3      -1.5       4.1        -1.1        2.3         2.4        2.3
---------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                       November 6, 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     135.1      163.2     120.8     166.8       119.8      123.5       135.5      127.9
          II     135.7      164.3     121.1     167.1       118.9      123.2       138.6      128.8
         III     135.0      164.4     121.8     167.9       118.3      124.4       138.3      129.5
          IV     135.0      165.0     122.2     171.7       121.4      127.1       134.8      130.0

      ANNUAL     135.2      164.2     121.5     168.4       119.6      124.6       136.8      129.1

2007       I     135.0      164.7     122.0     173.7       121.8      128.7       135.2      131.1
          II     136.4      167.0     122.4     174.1       120.7      127.7       138.2      131.5
         III     138.3      169.2     122.3     175.5       120.8      126.9       140.3      131.8
          IV     138.6      168.9     121.9     177.8       120.9      128.3       139.8      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     179.5       120.8      128.7       141.0      133.2
          II    r140.8     r170.5    r121.1    r181.1      r120.4     r128.6      r141.9     r133.5
         III     141.1      169.8     120.3     183.1       119.8      129.8       144.4      135.2
---------------------------------------------------------------------------------------------------------
                       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       1.9        -2.0        4.1        -0.9        2.1
          IV       0.2        1.4       1.2       9.3        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      -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       5.3         0.3        4.5        -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      -1.7       3.8        -0.4        1.2         3.6        2.1
          II      r3.6       r2.8      -0.8      r3.5       r-1.4      r-0.1        r2.4        0.9
         III       1.1       -1.7      -2.7       4.7        -1.9        3.6         7.3        5.0
---------------------------------------------------------------------------------------------------------
                      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       1.0       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       4.5         2.1        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       3.3        -0.8        0.0         4.3        1.6
          II      r3.2       r2.1      -1.1       4.0       r-0.3       r0.8        r2.6        1.5
         III       2.0        0.3      -1.7       4.3        -0.9        2.3         2.9        2.5
---------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                       November 6, 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        181.4          122.1         r98.6
          II           r183.1       r149.4        r81.6       r183.1         r121.7        r100.0
         III            182.6        147.2         80.6        185.3          121.2         101.5
--------------------------------------------------------------------------------------------------
                         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              3.3        r-0.8         -4.0          3.8           -0.5           0.5
          II            r-1.9        r-3.4         -1.5         r3.8          r-1.2          r5.8
         III             -1.0         -5.8         -4.9          5.0           -1.6           6.1
--------------------------------------------------------------------------------------------------
                     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             r4.0         r2.0         -1.9          2.5           -1.6          -1.4
          II             r2.5        r-0.1         -2.5          3.8          r-0.5          r1.3
         III              1.1         -2.6         -3.7          5.1           -0.2           3.9
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                November 6, 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           r215.5       r186.9         86.7        176.6          118.9         r82.0
          II           r213.2       r184.2        r86.4       r178.3         r118.6         r83.7
         III            214.9        182.0         84.7        181.0          118.4          84.2
--------------------------------------------------------------------------------------------------
                         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             r2.1        r-0.4         -2.5          2.5           -1.7           0.4
          II            r-4.2        r-5.6        r-1.4         r3.9          r-1.1          r8.5
         III              3.3         -4.7         -7.7          6.0           -0.7           2.6
--------------------------------------------------------------------------------------------------
                     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         r3.7         -1.7          2.1           -2.0          -3.2
          II             r2.5         r0.2         -2.3          3.4          r-0.9          r0.8
         III              1.9         -2.6         -4.4          5.1           -0.2           3.1
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                November 6, 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        188.0          126.5        r121.3
          II           r155.2       r115.4        r74.3       r189.6         r126.1        r122.2
         III            152.3        113.3         74.4        191.3          125.2         125.6
--------------------------------------------------------------------------------------------------
                         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             r5.8         -1.3         -6.7          6.0            1.7           0.3
          II             r0.5        r-1.2        r-1.7         r3.5          r-1.5          r3.0
         III             -7.3         -7.0          0.4          3.7           -2.9          11.8
--------------------------------------------------------------------------------------------------
                     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              2.5          0.1         -2.4          3.4           -0.8           0.8
          II             r2.6        r-0.5         -3.0          4.5            0.2           1.9
         III             -0.2         -2.7         -2.5          5.3            0.0           5.5
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                November 6, 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    148.7    181.1     121.8    176.2     118.6     118.5    119.0    118.6    150.3    121.5
          II   r151.8   r184.2    r121.3   r177.8    r118.2    r117.1   r119.1   r117.7   r147.0   r120.3
----------------------------------------------------------------------------------------------------------
                             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     -0.2     -1.4      -1.1      2.9      -1.3       3.2      0.3      2.4    -13.6      0.5
          II     r8.6     r6.9     r-1.6      3.7     r-1.3     r-4.6     r0.3    r-3.3    r-8.4    r-3.9
----------------------------------------------------------------------------------------------------------
                          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      1.7      1.8       0.1      3.5      -0.7       1.7      1.6      1.7    -12.5     -0.1
          II     r3.0     r2.5      -0.5      3.8      -0.4      r0.8     r1.4     r1.0   r-14.8    r-1.0
----------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                        November 6, 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 +1.4 index points approximately 95 percent of the time.  This 
interval is based on the performance of this measure between the fourth 
quarter of 1995 and the second quarter of 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: November 06, 2008