Productivity and Costs News Release



Internet address:     http://www.bls.gov/lpc/     USDL 08-1773  
Historical, technical                             TRANSMISSION OF THIS
  information:        (202) 691-5606              MATERIAL IS EMBARGOED
Current data:         (202) 691-5200              UNTIL 8:30 A.M. EST,
Media contact:        (202) 691-5902              WEDNESDAY, DECEMBER 3, 2008.



                        PRODUCTIVITY AND COSTS
                        Third 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 third quarter of 2008.  The seasonally adjusted annual rates 
of productivity growth in the third quarter were:


                 1.5 percent in the business sector and
                 1.3 percent in the nonfarm business sector.
        
        
In both sectors, hours were revised down more than output, leading to 
productivity increases which are 0.2 percentage point higher than in 
preliminary estimates published November 6.


        In manufacturing, revised productivity changes in the third quarter 
were:
                -2.7 percent in manufacturing,
                 2.9 percent in durable goods manufacturing, and
               -10.2 percent in nondurable goods manufacturing.
        
        
       In the manufacturing sector, productivity fell 1.7 percentage points 
more than was reported on November 6, as a 2.0 percent downward revision to 
output was partially offset by a 0.4 percent downward revision to hours.  
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: Revised 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                1.5      -1.7     -3.2          4.2     -2.4      2.6
Nonfarm business        1.3      -1.9     -3.1          4.1     -2.4      2.8
Manufacturing          -2.7      -7.8     -5.3          4.7     -1.9      7.6
  Durable               2.9      -5.8     -8.4          6.1     -0.6      3.1
  Nondurable          -10.2      -9.8      0.4          2.6     -3.8     14.3
------------------------------------------------------------------------------
                        Percent change from same quarter a year ago
                
Business                1.9       0.2     -1.6          3.3     -1.8      1.4
Nonfarm business        2.1       0.3     -1.8          3.5     -1.6      1.4
Manufacturing           0.6      -3.2     -3.8          4.6     -0.6      4.0
  Durable               1.8      -2.9     -4.6          5.0     -0.3      3.2
  Nondurable           -1.2      -3.6     -2.4          4.0     -1.2      5.3
------------------------------------------------------------------------------


Business

        Business sector productivity grew at a 1.5 percent annual rate during 
the third quarter of 2008, less than the 1.9 percent rate of growth from the 
third quarter of 2007 to the third quarter of 2008 and the 2.5 percent 
average annual rate from 2000 to 2007.  Productivity growth in the third 
quarter was the result of hours worked falling faster than output.  The hours 
decline of 3.2 percent was the largest since the fourth quarter of 2001 (4.2 
percent), and the output decline of 1.7 percent was the largest since the 
third quarter of 2001 (3.1 percent).

        Hourly compensation in the business sector increased 4.2 percent during 
the third quarter of 2008, following a 1.2 percent increase in the second 
quarter (seasonally adjusted annual rates).  This series includes accrued 
wages and salaries, supplements, employer contributions to employee benefit 
plans, and taxes.  Real hourly compensation fell 2.4 percent, the fourth 
consecutive quarter in which it declined.  This reflected the 6.7 percent 
increase in consumer prices during the third quarter, the fastest growth 
since a similar increase in the third quarter of 1990.

        The revised 2.6 percent third quarter increase in unit labor costs 
reverses the 2.4 percent decline in the second quarter.  Unit labor costs 
increased 1.4 percent over the past four quarters. The change in unit labor 
costs approximates the change in hourly compensation less the change in 
productivity.  The implicit price deflator for the business sector, which 
reflects changes in both unit labor costs and unit nonlabor payments, grew 
4.5 percent in the third quarter of 2008.  This was its fastest growth since 
the first quarter of 1990 (4.6 percent). 


Nonfarm business

        Productivity in the nonfarm business sector rose at a 1.3 percent annual 
rate in the third quarter of 2008, slower than the 2.1 percent rate over the 
last four quarters, and slower than the trend rate of 2.5 percent per year 
from 2000 to 2007.  As revised, output fell 1.9 percent and hours fell 3.1 
percent in the third quarter of 2008; the two measures had not declined as 
quickly since the third quarter of 2001 and the first quarter of 2002, 
respectively. 

        Hourly compensation in the nonfarm business sector rose 4.1 percent in 
the third quarter of 2008.  This rate is similar to trends in recent years; 
hourly compensation grew between 3.6 percent and 4.1 percent each year since 
2001.  As in the business sector, real hourly compensation decreased 2.4 
percent in nonfarm business during the third quarter, due to the increase in 
consumer prices. 

        Nonfarm business unit labor costs increased 2.8 percent in the third 
quarter of 2008.  Over the last four quarters unit labor costs increased 1.4 
percent.  The implicit price deflator for the nonfarm business sector rose 
4.9 percent in the third quarter, more than in any quarter since the third 
quarter of 1982 (5.0 percent).  

   
Manufacturing

        Manufacturing output per hour fell 2.7 percent in the third quarter of 
2008, as output fell 7.8 percent and hours fell 5.3 percent.  This is the 
largest quarterly decline in productivity in the entire series, going back to 
the second quarter of 1987.  The decline in output was the largest since the 
first quarter of 1991, when output fell 8.0 percent.  Third quarter 2008 saw 
the second consecutive quarter of negative manufacturing productivity growth; 
revised output per hour for the second quarter of 2008 fell 2.2 percent.

        The third-quarter decline in manufacturing productivity was driven by a 
10.2 percent decline in nondurable goods productivity; output per hour in 
durable goods industries increased 2.9 percent.  The quarterly drop in 
nondurable goods productivity is the largest in the series.  Nondurable goods 
output fell by 9.8 percent, 2.8 percentage points more than reported on 
November 6.  In contrast to the large decline in output, hours in nondurable 
manufacturing rose slightly during the quarter, 0.4 percent (table 5). 

        In durable goods industries, a 5.8 percent decline in output was 
outpaced by an 8.4 percent drop in hours, yielding a productivity increase of 
2.9 percent (table 4).  The declines in output and hours in durable 
manufacturing had not been as large since the fourth quarter of 2001, when 
output fell 9.9 percent and hours dropped 14.5 percent.  Complete historical 
series can be found on the productivity and costs homepage: 
http://www.bls.gov/lpc/#data. 

        The average hourly compensation of all manufacturing workers rose 4.7 
percent in the third quarter of 2008, and increased more in the durable goods 
sector, 6.1 percent, than in the nondurable goods sector, 2.6 percent.  Real 
hourly compensation for all manufacturing workers declined 1.9 percent in the 
third quarter, following declines of 0.5 percent and 2.7 percent in the first 
and second quarters of 2008.

        Both the decrease in productivity and the increase in hourly 
compensation contributed to a 7.6 percent increase in unit labor costs in 
manufacturing during the third quarter--much higher than the 4.0 percent 
increase over the last four quarters and the 0.3 percent rate from 2000 to 
2007.  Unit labor costs increased 3.1 percent in durable goods industries and 
14.3 percent in nondurable goods industries during the third quarter. 


Nonfinancial Corporations 

        Third-quarter 2008 measures of productivity and costs also were released 
for nonfinancial corporations (tables B and 6).  Output per all-employee hour 
grew at a 4.9 percent annual rate, with output rising 1.8 percent and hours 
of all employees falling 3.0 percent (seasonally adjusted annual rates).  
Over the last four quarters nonfinancial corporate sector productivity 
increased 3.5 percent.  This sector includes all corporations doing business 
in the United States, except those classified as depository institutions, 
nondepository institutions, security and commodity brokers, insurance 
carriers, regulated investment offices, small business investment offices, 
and real estate investment trusts.

                                                                
------------------------------------------------------------------------------
Table B.  Nonfinancial corporations: Third-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 III   4.9     1.8    -3.0     5.0     -1.6      0.1     24.6       4.0
------------------------------------------------------------------------------
                        Percent change from same quarter a year ago
                        
2008 III   3.5     2.0    -1.4     4.0     -1.2      0.5     -6.7       0.2
------------------------------------------------------------------------------

        Hourly compensation increased 5.0 percent during the third quarter, but 
when consumer prices are taken into account, real hourly compensation 
declined 1.6 percent.  Real hourly compensation declined 1.2 percent since 
the third quarter of 2007.

        Unit labor costs in the nonfinancial corporate sector remained steady, 
increasing just 0.1 percent during the third quarter of 2008; unit nonlabor 
costs increased 5.8 percent, and unit profits rose 24.6 percent (seasonally 
adjusted annual rates).  As a result of these movements, the implicit price 
deflator for the output of nonfinancial corporations--which reflects a 
weighted average of these three measures--rose 4.0 percent.


Revised Measures 

        Current and previous measures for second and third quarters of 2008 for 
the business, nonfarm business, and manufacturing sectors are compared in 
table C.  In the third quarter, revised estimates of productivity growth in 
the business and nonfarm business sectors are higher than those reported 
November 6, as downward revisions to hours were larger than downward 
revisions to output.  Manufacturing productivity had a large downward 
revision in the third quarter as the downward revision to output outweighed 
the downward revision to hours.

        Hourly compensation was revised down in all three sectors.  In the 
business and nonfarm business sectors unit labor costs rose 2.6 percent and 
2.8 percent, respectively, in the third quarter.  This is 0.8 percent lower 
than previously reported, reflecting both the downward revision to hourly 
compensation and the upward revision to productivity.  Hourly compensation 
was also revised down in manufacturing, but the large downward revision in 
manufacturing productivity resulted in an upward revision to unit labor 
costs.  
                                                

------------------------------------------------------------------------------
Table C. Previous and revised productivity and related measures:
Quarterly percent change at seasonally adjusted annual rate 
------------------------------------------------------------------------------
                                                               Real
                                                     Hourly    hourly    Unit
                        Produc-                      compen-   compen-   labor
Sector                  tivity    Output   Hours     sation    sation    costs
------------------------------------------------------------------------------                                          
                                Third quarter 2008

Business:                                               
  Previous               1.3       -1.5    -2.8       4.7       -1.9      3.4
  Revised                1.5       -1.7    -3.2       4.2       -2.4      2.6
Nonfarm business:                                               
  Previous               1.1       -1.7    -2.7       4.7       -1.9      3.6
  Revised                1.3       -1.9    -3.1       4.1       -2.4      2.8
Manufacturing:                                          
  Previous              -1.0       -5.8    -4.9       5.0       -1.6      6.1
  Revised               -2.7       -7.8    -5.3       4.7       -1.9      7.6
------------------------------------------------------------------------------  
                                Second quarter 2008

Business:                                               
  Previous               3.7        2.6    -1.0       3.8       -1.2      0.1
  Revised                3.7        2.6    -1.0       1.2       -3.7     -2.4
Nonfarm business:                                               
  Previous               3.6        2.8    -0.8       3.5       -1.4     -0.1
  Revised                3.6        2.8    -0.8       0.9       -3.9     -2.6
Manufacturing:                                          
  Previous              -1.9       -3.4    -1.5       3.8       -1.2      5.8
  Revised               -2.2       -3.7    -1.5       2.2       -2.7      4.5
------------------------------------------------------------------------------  

        There were also revisions to second quarter data for the business, 
nonfarm business, and manufacturing sectors.  Hourly compensation, real 
hourly compensation, and unit labor costs were revised in all three of these 
sectors to reflect new information on employee compensation published by the 
Bureau of Economic Analysis of the U.S. Department of Commerce on November 
25.  Hourly compensation growth was revised down 2.6 percent in the business 
and nonfarm business sectors, leading to similar downward revisions to real 
hourly compensation and unit labor costs.  Second-quarter increases in 
manufacturing hourly compensation and unit labor costs were revised down to 
2.2 percent and 4.5 percent, respectively.

        Manufacturing output in the second quarter was revised due to revised 
indexes of industrial production from the Board of Governors of the Federal 
Reserve.  The downward revision of 0.3 percentage point led to a similar 
downward revision to manufacturing productivity.


Revised measures: Nonfinancial corporations
       
        Measures for the nonfinancial corporate sector also were revised to 
reflect updated information on output and employee compensation during 
second-quarter 2008 (table D).  Output and productivity were revised down by 
0.9 percentage point, and hours declined at the same rate reported November 
6.  Hourly compensation growth was revised down by 1.4 percentage points, and 
because hourly compensation was revised downward more than productivity, unit 
labor costs fell faster than previously reported, at a rate of 5.0 percent.

                                                                
------------------------------------------------------------------------------
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
------------------------------------------------------------------------------
                                Second quarter 2008
                                
        
Previous   8.6     6.9    -1.6     3.7     -1.3     -4.6     -8.4       -3.9
Revised    7.7     6.0    -1.6     2.3     -2.6     -5.0     -7.7       -3.8
------------------------------------------------------------------------------

                                Next release date


        The next release of Productivity and Costs is scheduled for 8:30 AM EST, 
Thursday, February 5, 2009.  Preliminary fourth-quarter and annual 2008 
measures for the business, nonfarm business, and manufacturing sectors will 
be released at that time.


        Scheduled release dates for productivity and costs measures for major 
sectors of the U.S. economy in 2009 are:

==============================================================================
Reference period                        2009 release date
2008:   
Fourth quarter, Annual                  February 5
Fourth quarter, Annual (revised)        March 5
2009:   
First quarter                           May 7
First quarter (revised)                 June 4
Second quarter                          August 11
Second quarter (revised)                September 2
Third quarter                           November 5
Third quarter (revised)                 December 3
==============================================================================


        These dates are based on presently available schedules for the release 
of underlying source data in 2009.  Each issue of Productivity and Costs 
contains a "Next release date" paragraph that readers should use to confirm 
the dates above.




				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     141.8      170.2     120.0    r181.1      r120.4     r127.7      r142.3      133.2
         III    r142.3     r169.4    r119.1    r182.9      r119.7     r128.6      r144.9     r134.7
---------------------------------------------------------------------------------------------------------
                       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       3.7        2.6      -1.0      r1.2       r-3.7      r-2.4        r6.1        0.9
         III      r1.5      r-1.7     r-3.2      r4.2       r-2.4       r2.6        r7.4        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       3.0        2.0      -1.0      r3.2       r-1.0       r0.2        r3.6        1.5
         III      r1.9       r0.2     r-1.6      r3.3       r-1.8       r1.4        r3.7        2.3
---------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                       December 3, 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     140.8      170.5     121.1    r179.9      r119.6     r127.8      r143.3      133.5
         III    r141.2     r169.7    r120.2    r181.7      r118.9     r128.7      r146.2     r135.1
---------------------------------------------------------------------------------------------------------
                       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       3.6        2.8      -0.8      r0.9       r-3.9      r-2.6        r6.6        0.9
         III      r1.3      r-1.9     r-3.1      r4.1       r-2.4       r2.8        r8.3       r4.9
---------------------------------------------------------------------------------------------------------
                      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       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       3.2        2.1      -1.1      r3.3       r-0.9       r0.1        r3.7        1.5
         III      r2.1        0.3     r-1.8      r3.5       r-1.6       r1.4        r4.2        2.5
---------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                       December 3, 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            184.0        150.7         81.9        181.4          122.1          98.6
          II           r183.0       r149.3         81.6       r182.4         r121.3         r99.7
         III           r181.7       r146.3        r80.5       r184.5         r120.7        r101.5
--------------------------------------------------------------------------------------------------
                         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         -0.8         -4.0          3.8           -0.5           0.5
          II            r-2.2        r-3.7         -1.5         r2.2          r-2.7          r4.5
         III            r-2.7        r-7.8        r-5.3         r4.7          r-1.9          r7.6
--------------------------------------------------------------------------------------------------
                     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              4.0          2.0         -1.9          2.5           -1.6          -1.4
          II             r2.4        r-0.2         -2.5         r3.4          r-0.8          r0.9
         III             r0.6        r-3.2        r-3.8         r4.6          r-0.6          r4.0
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                December 3, 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            215.5        186.9         86.7        176.6          118.9          82.0
          II           r213.1       r184.2         86.4       r178.1         r118.4         r83.6
         III           r214.7       r181.5        r84.5       r180.8         r118.3         r84.2
--------------------------------------------------------------------------------------------------
                         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              2.1         -0.4         -2.5          2.5           -1.7           0.4
          II            r-4.3         -5.6         -1.4         r3.5          r-1.5          r8.1
         III             r2.9        r-5.8        r-8.4         r6.1          r-0.6          r3.1
--------------------------------------------------------------------------------------------------
                     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          3.7         -1.7          2.1           -2.0          -3.2
          II              2.5          0.2         -2.3         r3.3          r-1.0          r0.7
         III             r1.8        r-2.9        r-4.6         r5.0          r-0.3          r3.2
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                December 3, 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            155.0        115.7         74.6        188.0          126.5         121.3
          II           r155.0       r115.2         74.3       r187.9         r124.9        r121.2
         III           r150.9       r112.3        r74.4       r189.1         r123.7        r125.3
--------------------------------------------------------------------------------------------------
                         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              5.8         -1.3         -6.7          6.0            1.7           0.3
          II             r0.0        r-1.7         -1.7        r-0.3          r-5.0         r-0.3
         III           r-10.2        r-9.8          0.4         r2.6          r-3.8         r14.3
--------------------------------------------------------------------------------------------------
                     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             r2.4        r-0.7         -3.0         r3.6          r-0.7          r1.1
         III            r-1.2        r-3.6        r-2.4         r4.0          r-1.2          r5.3
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                December 3, 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   r151.5   r183.8     121.3   r177.2    r117.8    r117.0   r119.4   r117.6   r147.3   r120.3
         III    153.3    184.6     120.4    179.4     117.4     117.0    121.1    118.1    155.7    121.5
----------------------------------------------------------------------------------------------------------
                             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     r7.7     r6.0      -1.6     r2.3     r-2.6     r-5.0     r1.2    r-3.4    r-7.7    r-3.8
         III      4.9      1.8      -3.0      5.0      -1.6       0.1      5.8      1.7     24.6      4.0
----------------------------------------------------------------------------------------------------------
                          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     r2.8     r2.3      -0.5     r3.5     r-0.7      r0.7     r1.7      1.0   r-14.6     -1.0
         III      3.5      2.0      -1.4      4.0      -1.2       0.5      2.8      1.1     -6.7      0.2
----------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                        December 3, 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: December 03, 2008