## Productivity and Costs News Release

Internet address: http://www.bls.gov/lpc USDL 08-0293 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, MARCH 5, 2008 PRODUCTIVITY AND COSTS Fourth Quarter and Annual Averages, 2007 Revised The Bureau of Labor Statistics of the U.S. Department of Labor today reported revised fourth-quarter seasonally-adjusted annual rates of productivity change--as measured by output per hour of all persons--and revised changes for calendar year 2007. Percent changes in business and nonfarm business productivity were: Fourth Annual averages quarter 2006-2007 Business sector 1.0 1.9 Nonfarm business sector 1.9 1.8 Productivity growth for the fourth quarter of 2007 was revised up by 0.4 percentage points in the business sector from the estimates published February 6, due primarily to a downward revision to hours. Nonfarm business productivity was revised up by 0.1 percentage points, with small downward revisions to both output and hours. Unit labor costs also were revised up, to 2.7 percent in the business sector and 2.6 percent in nonfarm businesses, reflecting upward revisions in hourly compensation that more than offset the productivity increases. Productivity growth during calendar year 2007 also was higher than previously reported in both sectors. In the manufacturing sector, increases in productivity were: Fourth Annual averages quarter 2006-2007 Manufacturing 2.3 3.7 Durable goods manufacturing 4.2 4.9 Nondurable goods manufacturing -0.5 2.2 ============================================================================== Data in this release reflect the annual benchmark revision of BLS Current Employment Statistics program data on nonfarm employee hours, and revised seasonal adjustment of those data. Also, hours of other nonfarm and farm workers based on the BLS Current Population Survey incorporate new seasonal adjustment factors. Due to these revisions, hours measures for all major sectors were revised back to the first quarter of 2003. A conversion of nonfarm employee hours series to NAICS 2007 classification further revised all major sector series back to 1990. Revised seasonally-adjusted values of the BLS Consumer Price Index for all urban consumers are reflected in measures of consumer prices and real hourly compensation beginning with data for the first quarter of 2007. See Revised Measures. ============================================================================== ------------------------------------------------------------------------------ Table A. Productivity and costs: Revised fourth-quarter 2007 measures (Seasonally adjusted annual rates) ------------------------------------------------------------------------------ Real Hourly hourly Unit Produc- compen- compen- labor Sector tivity Output Hours sation sation costs ------------------------------------------------------------------------------ Percent change from preceding quarter Business 1.0 0.2 -0.7 3.6 -1.3 2.7 Nonfarm business 1.9 0.3 -1.6 4.6 -0.5 2.6 Manufacturing 2.3 -1.7 -3.9 4.4 -0.6 2.1 Durable 4.2 -0.7 -4.7 5.2 0.1 0.9 Nondurable -0.5 -2.9 -2.4 3.0 -1.9 3.5 Percent change from same quarter a year ago Business 3.0 2.6 -0.4 4.0 0.1 1.0 Nonfarm business 2.9 2.6 -0.3 3.9 0.0 0.9 Manufacturing 3.2 1.9 -1.3 3.7 -0.2 0.5 Durable 4.6 3.0 -1.5 3.5 -0.4 -1.0 Nondurable 1.5 0.5 -0.9 4.0 0.1 2.5 ------------------------------------------------------------------------------ Productivity in total manufacturing grew at a 2.3 percent annual rate in the fourth quarter of 2007, slightly less than the preliminary estimate of 2.5 percent. The fourth-quarter increase in productivity resulted when hours fell faster than output. When revised annual averages for 2006 and 2007 were compared, productivity increased more in each of the manufacturing sectors than reported Feb. 6. 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. Fourth-quarter productivity and related measures are summarized in table A and appear in detail in tables 1 through 5. Preliminary and revised fourth-quarter and annual data appear in table C. The data sources and methods used in the preparation of the manufacturing series differ from those used in preparing the business and nonfarm business series, and these measures are not directly comparable. Output measures for business and nonfarm business are based on measures of gross domestic product prepared by the Bureau of Economic Analysis of the U.S. Department of Commerce. Quarterly output measures for manufacturing reflect indexes of industrial production prepared by the Board of Governors of the Federal Reserve System. See Technical Notes for further information on data sources. THIRD-TO-FOURTH QUARTER CHANGES, 2007 Business Labor productivity in the business sector increased 1.0 percent in the fourth quarter of 2007, as output increased 0.2 percent and hours of all persons engaged in the sector decreased 0.7 percent (seasonally adjusted annual rates). When the fourth quarter of 2007 is compared to the fourth quarter of 2006 output per hour increased 3.0 percent (table 1). Hourly compensation grew at a 3.6-percent annual rate in the fourth quarter after rising 3.7 percent in the third quarter of 2007, as revised. 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 1.3 percent in the fourth quarter because consumer prices rose 5.0 percent (seasonally adjusted annual rates). Unit labor costs, which reflect changes in hourly compensation and productivity, increased 2.7 percent during the fourth quarter of 2007, after falling 2.8 percent in the third quarter. The implicit price deflator for business output, which reflects changes in unit labor costs and unit nonlabor payments, increased 2.3 percent in the fourth quarter and 0.3 percent in the third quarter. Nonfarm business In the nonfarm business sector, productivity increased at an annual rate of 1.9 percent in the fourth quarter of 2007, as output increased 0.3 percent and hours of all persons--employees, proprietors, and unpaid family workers-- decreased 1.6 percent. The decline in hours was the largest since the first quarter of 2003, when they fell 2.1 percent. From the fourth quarter of 2006 to the fourth quarter of 2007 productivity increased 2.9 percent (table 2). Hourly compensation grew 4.6 percent in the fourth quarter. When the increase in consumer prices was taken into account, real hourly compensation decreased 0.5 percent. Real hourly compensation had grown 0.6 percent during the third quarter of 2007. Unit labor costs increased at a 2.6 percent annual rate in the fourth quarter after falling 2.7 percent in the third quarter, as revised. The implicit price deflator for nonfarm business increased 2.0 percent in the fourth quarter and 0.1 percent in the third quarter of 2007. Manufacturing Manufacturing productivity increased 2.3 percent in the fourth quarter of 2007, as output decreased 1.7 percent and hours fell 3.9 percent (seasonally adjusted annual rates). In durable goods industries, productivity increased 4.2 percent as both output and hours decreased, 0.7 percent and 4.7 percent, respectively. The decline in durable goods hours was the largest since the third quarter of 2003, when hours fell 6.9 percent. In nondurable goods industries, output per hour fell 0.5 percent, reflecting decreases of 2.9 percent in output and 2.4 percent in hours. In the third quarter of 2007, productivity increased 4.1 percent in total manufacturing, 5.4 percent in durable goods industries, and 3.2 percent in nondurable goods industries, as revised (tables 3, 4, and 5). Manufacturing hourly compensation grew at a 4.4 percent annual rate during the fourth quarter of 2007. Durable goods manufacturing and nondurable goods manufacturing posted increases in hourly compensation of 5.2 percent and 3.0 percent, respectively. When the 5.0 percent fourth-quarter increase in consumer prices was taken into account, real hourly compensation declined 0.6 percent in total manufacturing, edged up 0.1 percent in durable manufacturing, and fell 1.9 percent in nondurable manufacturing (seasonally adjusted annual rates). Unit labor costs in manufacturing increased 2.1 percent in the fourth quarter of 2007 after falling 3.3 percent in the third quarter, as revised. These costs increased 0.9 percent in durable goods industries and 3.5 percent in nondurable goods industries during the fourth quarter of 2007. ANNUAL AVERAGE CHANGES, 2006-2007 Business and Nonfarm business Business sector productivity increased 1.9 percent when the revised annual average for 2007 was compared with the revised annual average for 2006--the same as the average rate of productivity growth over the past four years, from 2003 to 2007. Nonfarm business sector productivity grew 1.8 percent in 2007 (table B). In both sectors, the modest productivity improvement reflected output growth of 2.3 percent combined with small increases in hours worked: business sector hours increased 0.4 percent, and hours increased 0.5 percent in the nonfarm business sector. ------------------------------------------------------------------------------ Table B. Productivity and costs: Revised 2007 annual averages (Seasonally adjusted annual rates) ------------------------------------------------------------------------------ Real Hourly hourly Unit Produc- compen- compen- labor Sector tivity Output Hours sation sation costs ------------------------------------------------------------------------------ Percent change from previous year Business 1.9 2.3 0.4 5.0 2.3 3.1 Nonfarm business 1.8 2.3 0.5 4.9 2.3 3.1 Manufacturing 3.7 2.0 -1.7 5.4 2.7 1.6 Durable 4.9 2.9 -1.9 5.5 2.9 0.6 Nondurable 2.2 0.9 -1.2 5.1 2.5 2.9 ------------------------------------------------------------------------------ Hourly compensation increased 5.0 percent in the business sector and 4.9 percent in the nonfarm business sector. Real hourly compensation increased 2.3 percent during 2007 in both the business and nonfarm business sectors. Unit labor costs increased 3.1 percent in the business and nonfarm business sectors in 2007, faster than in any year since 2000, when unit labor costs grew 4.1 percent in the business sector and 4.2 percent in the nonfarm business sector. Manufacturing Manufacturing productivity grew 3.7 percent in 2007, reflecting an increase in output of 2.0 percent and a decrease in hours of 1.7 percent. In 2006, output per hour had increased 4.3 percent, as output grew 4.9 percent and hours rose 0.6 percent. Productivity also grew at a 4.3 percent average annual rate from 2000 to 2005. Labor productivity increased 4.9 percent in durable goods manufacturing during 2007, as output rose 2.9 percent and hours fell 1.9 percent. Productivity in nondurable goods manufacturing increased 2.2 percent in 2007, reflecting a 0.9 percent increase in output and a 1.2 percent drop in hours (tables B, 3, 4, and 5). Hourly compensation of manufacturing workers increased 5.4 percent in 2007, compared to a 2.8 percent increase one year earlier. Hourly compensation increased 5.5 percent in durable manufacturing and 5.1 percent in nondurable goods industries. Real hourly compensation in the manufacturing sector increased 2.7 percent in 2007 after decreasing 0.5 percent in 2006. From 2006 to 2007, unit labor costs rose 1.6 percent in manufacturing-- the largest increase in this measure since 2000, when unit labor costs increased 4.9 percent. During 2007, unit labor costs increased 0.6 percent in durable manufacturing and 2.9 percent in nondurable manufacturing. ------------------------------------------------------------------------------ Table C. Previous and revised productivity and related measures: Fourth-quarter 2007, third-quarter 2007, and annual averages 2007 (Seasonally adjusted annual rates) ------------------------------------------------------------------------------ Real Hourly hourly Unit Produc- compen- compen- labor Sector tivity Output Hours sation sation costs ------------------------------------------------------------------------------ Percent change, fourth quarter 2007 Business: Previous 0.6 0.2 -0.5 2.8 -1.4 2.2 Revised 1.0 0.2 -0.7 3.6 -1.3 2.7 Nonfarm business: Previous 1.8 0.4 -1.5 3.9 -0.3 2.1 Revised 1.9 0.3 -1.6 4.6 -0.5 2.6 Manufacturing: Previous 2.5 -1.9 -4.3 4.2 -0.1 1.7 Revised 2.3 -1.7 -3.9 4.4 -0.6 2.1 ------------------------------------------------------------------------------ Percent change, third quarter 2007 Business: Previous 6.5 5.7 -0.7 4.4 2.4 -2.0 Revised 6.6 5.7 -0.9 3.7 0.8 -2.8 Nonfarm business: Previous 6.0 5.6 -0.3 4.0 2.0 -1.9 Revised 6.3 5.6 -0.6 3.4 0.6 -2.7 Manufacturing: Previous 4.0 3.9 -0.1 1.0 -0.8 -2.9 Revised 4.1 3.9 -0.2 0.7 -2.0 -3.3 ------------------------------------------------------------------------------ Percent change, 2006 - 2007 Business: Previous 1.6 2.3 0.7 4.8 1.9 3.1 Revised 1.9 2.3 0.4 5.0 2.3 3.1 Nonfarm business: Previous 1.6 2.3 0.7 4.8 1.8 3.1 Revised 1.8 2.3 0.5 4.9 2.3 3.1 Manufacturing: Previous 2.9 2.0 -1.0 4.6 1.7 1.6 Revised 3.7 2.0 -1.7 5.4 2.7 1.6 ------------------------------------------------------------------------------ REVISED MEASURES Quarterly and annual measures for all sectors were revised back to 2003 to incorporate the annual benchmark adjustment and updated information on seasonal trends from the BLS nonfarm payroll series, and were also revised back to 1990 to convert all employee-hours series to NAICS 2007 classification (appendix tables 1-5). Hours and related measures for the business and nonfarm business sectors were revised to incorporate updated information on seasonal trends in Current Population Survey data on hours worked. Quarterly measures of consumer prices and real hourly compensation during 2007 also reflect the recalculation of seasonal factors for the Consumer Price Index for All Urban Consumers (CPI-U). Full quarterly and annual historical series are available on the BLS website, http://www.bls.gov/data/home.htm or by contacting the BLS Division of Major Sector Productivity at (202) 691-5606. Previous and revised productivity and related data for the third quarter, fourth quarter, and full year 2007 for business, nonfarm business, and manufacturing are displayed in Table C. In the fourth quarter of 2007, productivity growth was revised up from 0.6 percent to 1.0 percent in the business sector, and from 1.8 percent to 1.9 percent in the nonfarm business sector. In both sectors the upward revisions resulted from downward revisions to hours, with output little changed. The upward revisions to productivity were less than the upward revisions to hourly compensation, so unit labor costs were revised up in both sectors, by 0.5 percentage points. In the manufacturing sector, fourth-quarter productivity growth was revised down from 2.5 percent to 2.3 percent; both output and hours were revised up slightly. The combination of the downward revision to productivity and a small upward revision to hourly compensation led to an upward revision in unit labor costs from 1.7 percent to 2.1 percent. Productivity growth was revised up in all major sectors for the third quarter, due solely to downward revisions to hours; output was not revised. Hourly compensation growth was revised down in all sectors, contributing to downward revisions in unit labor costs. After revisions to annual averages, productivity grew more in 2007 in all major sectors than previously reported. These upward revisions to productivity were offset by upward revisions to hourly compensation, and as a result unit labor costs grew at the same rates reported Feb. 6. Revised measures: Nonfinancial corporations Measures for the nonfinancial corporate sector also were revised today to incorporate new information regarding output and compensation in the third quarter of 2007. Productivity in nonfinancial corporations in third-quarter 2007 was revised down from the preliminary estimate as output was revised down more than hours worked. Hourly compensation was revised down by more than productivity, and so unit labor costs edged down, rather than increasing as reported Feb. 6. Unit profits posted a slightly smaller decrease than originally reported. ------------------------------------------------------------------------------ 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 ------------------------------------------------------------------------------ Third quarter 2007 Previous 3.7 4.6 0.8 4.1 2.2 0.4 -11.0 -1.6 Revised 2.9 3.7 0.7 2.8 0.1 -0.1 -10.2 -1.6 ------------------------------------------------------------------------------ Next release date The next release of Productivity and Costs is scheduled for 8:30 A.M. EDT, Wednesday, May 7, 2008, and will present preliminary first-quarter 2008 measures for business, nonfarm business, and manufacturing. Fourth-quarter 2007 and annual average data for 2007 for nonfinancial corporations will be released at that time.

TECHNICAL NOTES Labor Hours: Hours data for the labor productivity and cost measures include hours for all persons working in the sector--wage and salary workers, the self-employed and unpaid family workers. The primary source of hours and employment data is the BLS Current Employment Statistics (CES) program, which provides monthly survey data on the number of jobs held by wage and salary workers in nonfarm establishments. The CES also provides average weekly paid hours of production and nonsupervisory workers in these establishments. Weekly paid hours are adjusted to hours at work using data from the National Compensation Survey (NCS). The BLS Hours at Work survey, conducted for this purpose, was used for earlier years. The Office of Productivity and Technology estimates average weekly hours at work for nonproduction and supervisory workers using information from the Current Population Survey (CPS), the CES, and the NCS. Data from the CPS are used for farm labor, nonfarm proprietors, and nonfarm unpaid family workers. Estimates of labor input for government enterprises are derived from the CPS, the CES, and the National Income and Product Accounts (NIPA) prepared by the Bureau of Economic Analysis (BEA) of the Department of Commerce. The CES measures jobs, counting a person who is employed by two or more establishments at each place of employment. In contrast, the CPS features measures of employment that count each person only once and classify each person according to his or her primary job; hours worked at all jobs by that person accrue to his or her primary job. However, the CPS also collects more detailed information on employment and hours worked at primary jobs and all other jobs, separately. The BLS productivity measures use the more detailed information on employment and hours to assign all hours worked to the correct industrial sector and avoid duplicating hours data from the CES. Output: Business sector output is an annual-weighted index constructed after excluding from gross domestic product (GDP) the following outputs: general government, nonprofit institutions, and private households (including owner- occupied housing). Corresponding exclusions also are made in labor inputs. Business output accounted for about 78 percent of the value of GDP in 2000. Nonfarm business, which also excludes farming, accounted for about 77 percent of GDP in 2000. Annual indexes for manufacturing and its durable and nondurable goods components are constructed by deflating current-dollar industry value of production data from the U.S. Bureau of the Census with deflators from the BLS. These deflators are based on data from the BLS producer price program and other sources. The industry shipments are aggregated using annual weights, and intrasector transactions are removed. Quarterly manufacturing output measures are based on the index of industrial production prepared monthly by the Board of Governors of the Federal Reserve System, adjusted to be consistent with annual indexes of manufacturing sector output prepared by BLS. Durables include the following 3-digit NAICS industries: wood product manufacturing; nonmetallic mineral product manufacturing; primary metal manufacturing; fabricated metal product manufacturing; machinery manufacturing; computer and electronic product manufacturing; electrical equipment and appliance manufacturing; transportation equipment manu- facturing; furniture and related product manufacturing; and miscellaneous manufacturing. Nondurables include: food manufacturing; beverage and tobacco product manufacturing; textile mills; textile product mills; apparel manufacturing; leather and allied product manufacturing; paper manufacturing; printing and related support activities; petroleum and coal products manufacturing; chemical manufacturing; and plastics and rubber products manufacturing. Nonfinancial corporate output is an annual-weighted index calculated on the basis of the costs incurred and the incomes earned from production. The output measure excludes the following outputs from GDP: general government; nonprofit institutions; private households; unincorporated business; and those corporations classified as offices of bank holding companies, offices of other holding companies, or offices in the finance and insurance sector. Nonfinancial corporations accounted for about 54 percent of the value of GDP in 2000. Productivity: These productivity measures describe the relationship between real output and the labor time involved in its production. They show the changes from period to period in the amount of goods and services produced per hour. Although these measures relate output to hours at work of all persons engaged in a sector, they do not measure the specific contribution of labor, capital, or any other factor of production. Rather, they reflect the joint effects of many influences, including changes in technology; capital investment; level of output; utilization of capacity, energy, and materials; the organization of production; managerial skill; and the characteristics and effort of the work force. Labor Compensation: Estimates of labor compensation by major sector, required for measures of hourly compensation and unit labor costs, are based primarily on employee compensation data from the NIPA, prepared by the BEA. The compensation of employees in general government, nonprofit institutions and private households are subtracted from compensation of domestic employees to derive employee compensation for the business sector. The labor compensation of proprietors cannot be explicitly identified and must be estimated. This is done by assuming that proprietors have the same hourly compensation as employees in the same sector. The quarterly labor productivity and cost measures do not contain estimates of compensation for unpaid family workers. Unit Labor Costs: The measures of unit labor costs in this release describe the relationship between compensation per hour and productivity, or real output per hour, and can be used as an indicator of inflationary pressure on producers. Increases in hourly compensation increase unit labor costs; labor productivity increases offset compensation increases and lower unit labor costs. Presentation of the data: The quarterly data in this release are presented in three ways; as index number series where 1992=100, as percent changes from the corresponding quarter of the previous year, and as percent changes from the previous quarter presented at a compound annual rate. Annual data are presented both as index number series and percent changes from the previous year. The index numbers and rates of change reported in the productivity and costs news release are rounded to one decimal place. All percent changes in this release and on the BLS web site are calculated using index numbers to three decimal places. These index numbers are available at the BLS web site, http://www.bls.gov/data/home.htm, or by contacting the BLS Division of Major Sector Productivity. (Telephone 202-691-5606 or email DPRWEB@BLS.GOV) Information in this release will be made available to sensory-impaired individuals upon request. 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Table 1. Business sector: Productivity, hourly compensation, unit labor costs, and prices seasonally adjusted Real Year Output per Hours Compensa- compensa- Unit Unit non- Implicit and hour of of all tion per tion per labor labor pay- price quarter all persons Output persons hour (1) hour (2) costs ments (3) deflator (4) --------------------------------------------------------------------------------------------------------- Indexes 1992=100 2005 I r134.3 157.2 r117.0 r161.5 r120.4 r120.2 r128.1 123.1 II r134.3 158.5 r118.0 r161.7 r119.4 r120.4 r129.9 123.9 III r135.9 160.6 r118.2 r164.1 r119.5 r120.8 r132.0 125.0 IV r135.6 161.0 r118.8 r165.4 r119.5 r122.0 r133.0 126.1 ANNUAL r135.0 159.3 r118.0 r163.2 r119.7 r120.9 r130.8 124.5 2006 I r136.3 163.2 r119.7 r168.3 r121.0 r123.4 r132.9 127.0 II r136.7 164.2 r120.1 r168.1 r119.4 r123.0 r136.5 128.0 III r136.1 164.4 r120.8 r168.7 r118.9 r123.9 r136.7 128.7 IV r136.6 165.5 r121.1 r173.5 r122.9 r127.0 r132.1 128.9 ANNUAL r136.4 164.3 r120.4 r169.7 r120.5 r124.3 r134.6 128.2 2007 I r136.8 165.6 r121.0 r176.1 r123.7 r128.7 r132.7 130.2 II r138.1 167.3 r121.2 r177.2 r123.1 r128.3 r135.3 130.9 III r140.3 169.7 r120.9 r178.8 r123.4 r127.4 r137.2 131.0 IV r140.7 r169.8 r120.7 r180.4 r122.9 r128.2 r137.8 r131.8 ANNUAL r139.0 r168.1 r121.0 r178.1 r123.3 r128.2 r135.8 r131.0 --------------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2005 I r2.8 3.7 r0.9 3.0 r1.0 r0.2 r8.9 3.4 II r0.0 3.3 r3.3 r0.6 r-3.2 r0.6 r5.7 2.6 III r4.6 5.5 r0.9 r6.1 r0.5 r1.4 r6.8 3.5 IV r-0.9 1.0 r1.9 r3.2 r-0.2 r4.1 r2.9 3.7 ANNUAL 2.0 3.6 1.6 4.0 0.6 2.0 4.9 3.1 2006 I r2.3 5.5 r3.1 r7.1 5.1 r4.7 r-0.2 2.8 II r1.1 2.5 r1.5 r-0.5 r-5.2 r-1.5 r11.3 3.3 III r-1.6 0.6 r2.3 r1.5 r-1.7 3.1 0.5 2.1 IV r1.4 2.6 r1.2 r11.8 r14.2 r10.4 r-12.7 0.8 ANNUAL 1.0 3.1 2.1 r4.0 r0.7 2.9 2.9 2.9 2007 I r0.6 0.2 r-0.4 r6.1 r2.8 r5.5 r1.8 4.1 II r3.8 4.4 r0.5 r2.5 r-2.0 r-1.3 r8.1 2.2 III r6.6 5.7 r-0.9 r3.7 r0.8 r-2.8 r5.5 0.3 IV r1.0 0.2 r-0.7 r3.6 r-1.3 r2.7 r1.9 r2.3 ANNUAL r1.9 2.3 r0.4 r5.0 r2.3 3.1 r0.9 2.2 --------------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2005 I 2.5 3.8 r1.3 r4.9 1.9 2.4 4.1 3.1 II 1.5 3.5 2.0 3.8 0.9 2.3 3.6 2.8 III 2.4 3.9 1.5 4.0 r0.2 1.6 r5.9 3.2 IV 1.6 3.4 1.7 3.2 -0.5 1.6 6.1 3.3 ANNUAL 2.0 3.6 1.6 4.0 0.6 2.0 4.9 3.1 2006 I 1.5 3.8 2.3 4.2 0.5 2.7 3.8 3.1 II r1.8 3.6 1.8 r4.0 0.0 2.2 5.1 3.3 III 0.2 2.4 2.2 2.8 -0.6 2.6 3.5 3.0 IV r0.8 2.8 r2.0 r4.9 r2.9 4.1 -0.6 2.2 ANNUAL 1.0 3.1 2.1 r4.0 r0.7 2.9 2.9 2.9 2007 I r0.3 1.5 r1.1 r4.6 r2.3 4.3 -0.1 2.6 II r1.0 1.9 r0.9 r5.4 r3.1 4.3 r-0.9 2.3 III r3.1 3.2 r0.1 r6.0 r3.8 r2.8 r0.4 1.8 IV r3.0 2.6 r-0.4 r4.0 r0.1 r1.0 r4.3 2.2 ANNUAL r1.9 2.3 r0.4 r5.0 r2.3 3.1 r0.9 2.2 --------------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 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 2005 I r133.3 157.4 r118.0 r160.3 r119.5 r120.2 r129.6 123.6 II r133.6 158.6 r118.7 r160.9 r118.8 r120.4 r131.3 124.5 III r135.0 160.8 r119.1 r163.2 r118.9 r120.9 r133.8 125.6 IV r134.5 161.2 r119.8 r164.3 r118.6 r122.1 r134.8 126.8 ANNUAL r134.1 159.5 r118.9 r162.2 r118.9 r120.9 r132.4 125.1 2006 I r135.2 163.4 r120.8 r167.0 r120.0 r123.5 r134.9 127.7 II r135.7 164.4 r121.2 r167.0 r118.6 r123.1 r138.8 128.9 III r135.2 164.7 r121.8 r167.6 r118.1 r124.0 r138.6 129.4 IV r135.7 165.7 r122.1 r172.5 r122.2 r127.2 r133.5 129.5 ANNUAL r135.4 164.5 r121.5 r168.6 r119.7 r124.5 r136.4 128.9 2007 I r136.0 165.9 r121.9 r175.2 r123.1 r128.8 r133.8 130.6 II r136.9 167.6 r122.4 r175.8 r122.1 r128.4 r136.3 131.3 III r139.0 169.9 r122.2 r177.3 r122.3 r127.5 r137.9 131.3 IV r139.7 r170.0 r121.8 r179.2 r122.2 r128.3 r138.3 r132.0 ANNUAL r137.9 r168.4 r122.1 r176.9 r122.4 r128.3 r136.6 r131.3 --------------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2005 I r3.4 3.9 r0.5 r3.4 r1.4 r0.0 r10.2 3.8 II r0.7 3.2 r2.5 r1.6 r-2.3 r0.8 r5.7 2.7 III r4.3 5.6 r1.2 r5.8 r0.3 r1.4 r7.5 3.8 IV -1.4 0.9 2.4 r2.7 r-0.7 r4.2 r3.0 3.7 ANNUAL 1.9 3.6 r1.7 4.0 r0.6 2.0 5.5 3.4 2006 I r2.1 5.7 r3.5 r6.9 r4.8 r4.7 r0.3 3.0 II r1.3 2.4 r1.1 r0.0 r-4.8 r-1.3 r12.1 3.7 III r-1.5 0.8 r2.3 r1.5 r-1.7 r3.0 -0.4 1.6 IV r1.6 2.6 r1.0 r12.3 r14.7 r10.5 r-13.9 0.3 ANNUAL 1.0 3.2 2.2 3.9 0.6 2.9 3.1 3.0 2007 I r1.0 0.3 r-0.6 r6.4 r3.1 r5.4 r0.7 3.6 II r2.6 4.2 r1.6 r1.3 r-3.1 r-1.3 r7.8 2.1 III r6.3 5.6 r-0.6 r3.4 r0.6 r-2.7 r4.8 0.1 IV r1.9 r0.3 r-1.6 r4.6 r-0.5 r2.6 1.0 r2.0 ANNUAL r1.8 2.3 r0.5 r4.9 r2.3 3.1 r0.1 1.9 --------------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2005 I r2.4 3.8 1.4 r4.8 1.8 r2.4 r4.7 3.3 II 1.4 3.4 2.0 3.9 r1.0 2.5 4.3 3.2 III 2.2 3.8 r1.6 4.0 r0.2 1.7 6.4 3.5 IV 1.7 3.4 r1.6 r3.4 r-0.3 1.6 6.6 3.5 ANNUAL 1.9 3.6 r1.7 4.0 r0.6 2.0 5.5 3.4 2006 I 1.4 3.8 2.4 4.2 0.5 2.8 4.1 3.3 II r1.6 3.6 2.0 3.8 -0.2 2.2 5.7 3.5 III 0.1 2.4 r2.3 2.7 r-0.6 2.6 3.6 3.0 IV 0.9 2.8 r1.9 5.0 3.0 4.1 -0.9 2.2 ANNUAL 1.0 3.2 2.2 3.9 0.6 2.9 3.1 3.0 2007 I r0.6 1.5 r0.9 r4.9 r2.6 4.3 -0.8 2.3 II r0.9 2.0 r1.0 r5.3 r3.0 r4.3 r-1.8 1.9 III r2.9 3.2 r0.3 r5.8 r3.6 r2.8 r-0.5 1.5 IV r2.9 2.6 r-0.3 r3.9 r0.0 r0.9 r3.5 r1.9 ANNUAL r1.8 2.3 r0.5 r4.9 r2.3 3.1 r0.1 1.9 --------------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 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 2005 I r168.3 142.7 r84.8 r166.2 r123.9 98.7 II r171.1 143.8 r84.0 r168.0 r124.1 r98.2 III r172.7 144.5 r83.7 r170.4 r124.1 r98.7 IV r173.6 147.3 r84.8 r168.7 r121.9 r97.2 ANNUAL r171.4 144.6 r84.3 r168.3 r123.5 r98.2 2006 I r175.2 149.5 r85.3 r172.4 r123.9 r98.4 II r177.4 151.6 r85.4 r170.5 r121.1 r96.1 III r180.8 153.4 r84.8 r171.6 r120.9 r94.9 IV r181.7 152.6 r84.0 r177.4 r125.6 r97.6 ANNUAL r178.7 151.7 r84.9 r173.0 r122.8 r96.8 2007 I r183.0 152.9 r83.6 r181.8 r127.7 r99.3 II r184.5 154.6 r83.8 r181.6 r126.2 r98.4 III r186.4 156.1 r83.7 r181.9 r125.5 r97.6 IV r187.5 r155.4 r82.9 r183.9 r125.3 r98.1 ANNUAL r185.3 r154.7 r83.5 r182.3 r126.2 r98.3 -------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2005 I r4.7 4.6 r-0.1 r1.1 -0.9 r-3.5 II r6.8 3.1 r-3.5 r4.5 r0.5 -2.2 III r3.6 2.1 r-1.5 r5.8 r0.3 2.1 IV r2.3 7.9 r5.5 r-3.9 r-7.1 -6.0 ANNUAL r4.7 3.5 r-1.1 4.2 r0.9 r-0.4 2006 I r3.7 6.0 r2.2 r9.1 r6.9 5.1 II r5.1 5.7 r0.6 r-4.4 r-8.9 -9.1 III r7.9 4.8 r-2.8 r2.7 r-0.5 -4.8 IV r1.9 -2.1 r-3.9 r14.1 r16.5 12.0 ANNUAL r4.3 4.9 r0.6 r2.8 r-0.5 -1.5 2007 I r3.0 0.9 r-2.0 r10.3 r6.8 r7.1 II r3.4 4.4 r1.0 r-0.4 r-4.7 r-3.6 III r4.1 3.9 r-0.2 r0.7 r-2.0 r-3.3 IV r2.3 r-1.7 r-3.9 r4.4 r-0.6 r2.1 ANNUAL r3.7 2.0 r-1.7 r5.4 r2.7 1.6 -------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2005 I r4.2 3.1 r-1.0 6.0 2.9 r1.7 II r4.9 3.4 r-1.5 r5.1 r2.2 r0.2 III 5.2 3.3 r-1.8 r4.2 r0.4 r-1.0 IV 4.4 4.4 0.0 1.8 -1.8 r-2.4 ANNUAL r4.7 3.5 r-1.1 4.2 r0.9 r-0.4 2006 I r4.1 4.7 r0.6 r3.8 r0.0 -0.3 II r3.7 5.4 r1.6 r1.5 r-2.4 -2.1 III r4.7 6.1 r1.3 r0.7 r-2.6 -3.8 IV r4.6 3.6 r-1.0 r5.1 r3.1 0.5 ANNUAL r4.3 4.9 r0.6 r2.8 r-0.5 -1.5 2007 I r4.4 2.3 r-2.1 r5.4 r3.0 0.9 II r4.0 2.0 r-1.9 r6.5 r4.2 2.4 III r3.1 1.8 r-1.3 r6.0 r3.8 r2.8 IV r3.2 r1.9 r-1.3 r3.7 r-0.2 0.5 ANNUAL r3.7 2.0 r-1.7 r5.4 r2.7 1.6 -------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 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 2005 I r189.7 169.7 r89.4 r161.3 r120.3 r85.0 II r193.6 171.6 r88.6 r162.7 r120.1 r84.0 III r196.8 174.5 r88.7 r165.5 r120.6 r84.1 IV r200.6 180.5 r90.0 r163.5 r118.1 r81.5 ANNUAL r195.2 174.1 r89.2 r163.3 r119.7 r83.6 2006 I r202.3 182.9 r90.4 r168.1 r120.8 r83.1 II r205.9 187.1 r90.9 r166.1 r117.9 r80.7 III r211.1 189.6 r89.8 r167.3 r117.8 r79.2 IV r212.3 188.9 r89.0 r173.6 r123.0 r81.8 ANNUAL r207.9 187.2 r90.0 r168.7 r119.8 r81.2 2007 I r213.6 188.7 r88.3 r177.6 r124.8 r83.2 II r216.9 192.1 r88.6 r177.5 r123.3 r81.8 III r219.8 195.0 r88.7 r177.5 r122.5 r80.8 IV r222.1 r194.7 r87.7 r179.8 r122.5 r80.9 ANNUAL r218.1 r192.6 r88.3 r178.1 r123.3 r81.7 -------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2005 I r3.8 5.5 r1.7 r0.3 r-1.6 r-3.3 II r8.5 4.7 r-3.5 r3.4 r-0.5 -4.7 III r6.8 6.8 r0.1 r7.2 r1.5 0.4 IV r8.0 14.5 r6.1 r-4.7 r-7.9 -11.7 ANNUAL r5.1 5.0 r-0.1 3.8 0.5 r-1.1 2006 I r3.5 5.5 r2.0 r11.6 r9.4 7.9 II r7.2 9.4 r2.1 r-4.7 r-9.2 r-11.1 III r10.5 5.5 r-4.6 r2.9 r-0.3 -6.9 IV r2.3 -1.4 r-3.6 r16.1 r18.5 13.5 ANNUAL r6.5 7.5 r1.0 r3.4 r0.1 -2.9 2007 I r2.5 -0.5 r-2.9 r9.6 r6.1 6.9 II r6.2 7.3 r1.0 r-0.4 r-4.7 -6.2 III r5.4 6.3 r0.8 r0.1 r-2.6 r-5.1 IV r4.2 r-0.7 r-4.7 5.2 r0.1 r0.9 ANNUAL r4.9 2.9 r-1.9 r5.5 r2.9 0.6 -------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2005 I r2.8 3.0 r0.1 r5.9 r2.8 r3.0 II r4.6 4.0 r-0.5 r4.5 r1.6 r-0.1 III r6.0 5.1 r-0.9 r3.6 r-0.1 r-2.2 IV r6.7 7.8 r1.0 1.5 r-2.2 r-4.9 ANNUAL r5.1 5.0 r-0.1 3.8 0.5 r-1.1 2006 I r6.6 7.8 r1.1 r4.2 r0.5 -2.3 II 6.3 9.0 r2.5 r2.1 r-1.8 -4.0 III r7.3 8.7 r1.3 r1.1 r-2.3 -5.8 IV r5.8 4.7 r-1.1 r6.2 r4.1 0.3 ANNUAL r6.5 7.5 r1.0 r3.4 r0.1 -2.9 2007 I r5.6 3.2 r-2.3 r5.7 r3.3 0.1 II r5.3 2.6 r-2.6 r6.9 r4.6 1.4 III r4.1 2.8 r-1.2 r6.1 r3.9 r1.9 IV r4.6 r3.0 r-1.5 r3.5 r-0.4 -1.0 ANNUAL r4.9 2.9 r-1.9 r5.5 r2.9 0.6 -------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 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 2005 I r147.4 114.7 r77.8 r173.4 r129.3 r117.6 II r149.2 115.1 r77.1 r176.2 r130.1 r118.1 III r149.7 114.2 r76.3 r177.6 r129.3 r118.6 IV r148.4 114.4 r77.1 r176.4 r127.4 r118.9 ANNUAL r148.7 114.6 r77.1 r175.9 r129.0 r118.3 2006 I r149.8 116.3 r77.6 r178.3 r128.2 119.0 II r151.2 116.8 r77.2 r176.4 r125.3 r116.7 III r152.6 117.9 r77.3 r177.6 r125.1 r116.4 IV r153.1 117.1 r76.4 r181.9 r128.9 r118.8 ANNUAL r151.6 117.0 r77.2 r178.6 r126.8 r117.8 2007 I r154.3 117.8 r76.4 r187.1 r131.5 r121.3 II r154.4 118.2 r76.6 r187.0 r129.9 r121.1 III r155.6 118.6 r76.2 r187.7 r129.5 r120.7 IV r155.4 r117.7 r75.7 r189.1 r128.9 r121.7 ANNUAL r154.9 r118.1 r76.2 r187.7 r130.0 r121.2 -------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2005 I r6.8 3.3 r-3.3 r2.2 r0.2 -4.3 II 4.9 1.3 r-3.5 r6.6 2.5 1.6 III r1.3 -3.0 r-4.3 r3.1 r-2.3 1.7 IV r-3.5 0.8 r4.5 r-2.5 r-5.8 1.0 ANNUAL 4.8 1.9 r-2.8 4.8 1.4 0.0 2006 I 3.9 6.6 r2.6 r4.4 2.3 0.4 II r3.7 1.7 r-1.9 r-4.2 r-8.7 -7.6 III r3.8 4.1 r0.3 r2.7 r-0.5 r-1.1 IV r1.4 -2.9 r-4.3 r10.2 r12.5 8.6 ANNUAL r2.0 2.1 r0.1 r1.5 r-1.7 -0.5 2007 I r3.1 2.6 r-0.5 r11.9 r8.4 r8.6 II r0.2 1.2 r1.1 r-0.4 r-4.8 -0.6 III r3.2 1.3 -1.9 r1.7 r-1.0 r-1.4 IV r-0.5 r-2.9 r-2.4 r3.0 r-1.9 3.5 ANNUAL r2.2 0.9 r-1.2 r5.1 r2.5 r2.9 -------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2005 I r6.4 3.3 r-2.9 r6.0 r2.9 -0.4 II r5.9 2.5 r-3.2 6.1 r3.1 0.2 III r4.8 1.2 r-3.4 r5.0 r1.2 0.1 IV 2.3 0.6 -1.7 2.3 -1.4 0.0 ANNUAL 4.8 1.9 r-2.8 4.8 1.4 0.0 2006 I r1.6 1.4 r-0.2 r2.8 r-0.9 1.2 II r1.3 1.5 r0.1 r0.1 r-3.7 -1.2 III r1.9 3.3 r1.3 r0.0 r-3.3 -1.9 IV r3.2 2.3 r-0.9 r3.1 r1.1 -0.1 ANNUAL r2.0 2.1 r0.1 r1.5 r-1.7 -0.5 2007 I r3.0 1.3 r-1.6 r5.0 r2.6 1.9 II r2.1 1.2 r-0.9 r6.0 r3.7 r3.8 III r2.0 0.5 r-1.4 r5.7 r3.5 r3.7 IV r1.5 r0.5 r-0.9 r4.0 r0.1 r2.5 ANNUAL r2.2 0.9 r-1.2 r5.1 r2.5 r2.9 -------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 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 2005 I 140.3 164.6 117.3 158.0 117.8 112.6 111.5 112.3 151.9 115.9 II r141.1 166.8 r118.2 r158.5 r117.0 112.3 111.7 112.1 161.7 116.6 III r140.5 166.9 r118.8 r160.8 r117.2 114.4 115.1 114.6 147.5 117.6 IV r141.4 169.2 r119.7 r161.8 r116.9 114.5 112.8 114.0 159.5 118.1 ANNUAL r140.8 166.9 r118.5 r159.8 r117.2 113.5 112.8 113.3 155.2 117.0 2006 I r142.4 171.5 r120.4 r163.8 r117.8 115.0 112.5 114.4 164.4 118.8 II r141.8 171.5 r120.9 r163.9 r116.4 115.6 114.3 115.2 164.8 119.7 III r142.9 173.6 r121.5 r164.6 r115.9 115.2 113.8 114.8 172.6 120.0 IV r143.4 174.6 r121.8 r169.3 r119.9 118.1 114.5 117.1 150.0 120.1 ANNUAL r142.6 172.8 r121.1 r165.4 r117.5 116.0 113.8 115.4 162.9 119.6 2007 I r143.8 175.0 r121.7 r171.4 r120.4 119.2 114.6 118.0 154.3 121.2 II r144.6 176.3 r121.9 r172.4 r119.8 119.3 114.8 118.0 158.2 121.6 III r145.6 r177.9 r122.2 r173.6 r119.8 r119.2 r114.4 r117.9 r153.9 121.2 ---------------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2005 I r0.2 0.3 r0.2 r2.6 r0.6 2.4 6.8 3.6 9.8 4.3 II r2.3 5.4 r3.0 1.2 -2.6 -1.0 0.5 -0.6 28.4 2.5 III -1.6 0.4 r2.1 r6.0 0.5 7.8 12.7 9.1 -30.8 3.4 IV r2.5 5.6 r3.0 r2.6 r-0.9 0.0 -7.6 -2.1 36.9 1.8 ANNUAL 1.1 2.7 r1.7 3.8 r0.4 2.7 3.0 2.8 7.0 3.3 2006 I r2.9 5.5 r2.5 r5.0 r3.0 2.0 -1.0 1.2 12.7 2.6 II r-1.7 -0.1 1.7 0.2 r-4.5 2.0 6.4 3.1 1.2 2.9 III 3.1 5.0 1.9 1.6 r-1.6 -1.4 -1.5 -1.5 20.1 1.0 IV r1.4 2.4 r1.0 r12.1 r14.4 10.5 2.2 8.3 -42.9 0.3 ANNUAL 1.3 3.5 2.2 3.5 0.2 2.2 0.9 1.9 5.0 2.2 2007 I r1.2 0.9 r-0.3 r5.1 r1.7 3.8 0.5 2.9 11.8 3.9 II 2.1 2.9 0.8 2.3 r-2.2 0.2 0.5 0.3 10.4 1.4 III r2.9 r3.7 r0.7 r2.8 r0.1 r-0.1 r-1.2 r-0.4 r-10.2 -1.6 ---------------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2005 I r2.1 3.3 1.1 r4.7 1.7 2.5 1.8 2.3 12.4 3.4 II 1.6 3.3 1.7 3.7 0.7 2.1 2.1 2.1 10.9 3.1 III r-0.2 1.5 1.7 3.8 r0.0 4.0 5.4 4.3 -2.1 3.6 IV 0.8 2.9 2.1 3.1 -0.6 2.3 2.8 2.4 7.5 3.0 ANNUAL 1.1 2.7 r1.7 3.8 r0.4 2.7 3.0 2.8 7.0 3.3 2006 I 1.5 4.2 2.6 3.7 0.0 2.2 0.9 1.8 8.2 2.6 II 0.5 2.8 2.3 3.4 -0.5 2.9 2.3 2.8 1.9 2.7 III 1.7 4.0 2.3 2.3 -1.0 0.6 -1.1 0.2 17.0 2.1 IV 1.4 3.2 1.8 4.6 2.6 3.2 1.5 2.7 -5.9 1.7 ANNUAL 1.3 3.5 2.2 3.5 0.2 2.2 0.9 1.9 5.0 2.2 2007 I r1.0 2.1 r1.1 r4.6 r2.3 3.6 1.8 3.2 -6.1 2.0 II r1.9 2.8 r0.9 r5.2 r2.9 3.2 0.4 2.4 -4.1 1.6 III 1.9 r2.5 r0.6 r5.5 r3.3 r3.5 r0.5 2.7 r-10.8 1.0 ---------------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 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 third quarter of 2007. Footnotes, Tables 1-6 (1) Wages and salaries of employees plus employers' contributions for social insurance and private benefit plans. Except for nonfinancial corporations, where there are no self-employed, data also include an estimate of wages, salaries, and supplemental payments for the self- employed. (2) The change for recent quarters is based on the Consumer Price Index for all urban consumers (CPI-U). The trend from 1978-2006 is based on the Consumer Price Index research series (CPI-U-RS). (3) Unit nonlabor payments include profits, consumption of fixed capital, taxes on production and imports less subsidies, net interest and miscellaneous payments, business current transfer payments, rental income of persons, and the current surplus of government enterprises. (4) Current dollar output divided by the output index. (5) Quarterly changes: Percent change compounded at annual rate 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.

Appendix table 1. Business sector: Revised 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 2003 I r125.8 144.4 r114.8 r148.1 r115.8 r117.7 r116.5 117.3 II r128.0 146.0 r114.1 r150.8 r117.8 r117.8 r116.8 117.4 III r130.7 149.7 r114.5 r152.4 r118.4 r116.6 r120.2 118.0 IV r130.3 150.1 r115.1 r153.7 r119.0 r117.9 r119.5 118.5 ANNUAL r128.7 147.5 r114.6 r151.2 r117.7 r117.5 118.3 117.8 2004 I r131.1 151.4 r115.5 r153.9 r118.2 r117.4 r123.0 119.5 II r132.4 153.1 r115.6 r155.7 r118.4 r117.6 r125.4 120.5 III r132.7 154.6 r116.5 r157.8 r119.3 r118.9 r124.7 121.1 IV r133.4 155.7 r116.7 r160.3 r120.1 r120.1 r125.4 122.1 ANNUAL r132.4 153.7 r116.1 r156.9 r119.0 r118.5 r124.6 120.8 --------------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2003 I r3.4 1.1 -2.2 r5.6 r1.9 r2.2 r1.5 1.9 II r7.2 4.6 r-2.4 7.5 7.2 r0.3 r1.0 0.6 III r8.8 10.4 r1.5 r4.5 r2.0 r-3.9 r12.1 1.8 IV r-1.1 1.1 r2.2 r3.2 r2.2 r4.4 r-2.2 1.8 ANNUAL 3.8 3.1 -0.7 4.1 1.7 0.2 3.6 1.5 2004 I 2.4 3.7 1.2 0.6 r-2.8 r-1.7 r12.3 3.4 II 3.9 4.4 r0.4 r4.9 r0.7 r0.9 r8.1 3.6 III r1.1 4.0 r2.9 r5.4 r3.1 r4.3 r-2.2 1.8 IV 2.0 3.0 1.0 r6.4 r2.7 r4.3 r2.1 3.5 ANNUAL 2.9 4.2 1.3 r3.8 1.1 0.9 5.4 2.6 --------------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2003 I 2.4 1.8 -0.6 3.0 0.1 0.6 2.9 1.4 II 3.7 2.4 -1.3 3.7 1.5 0.0 r3.7 1.3 III 4.7 4.0 r-0.6 r4.3 r2.0 -0.4 4.7 1.5 IV r4.5 4.2 r-0.3 r5.2 r3.3 0.7 3.0 1.5 ANNUAL 3.8 3.1 -0.7 4.1 1.7 0.2 3.6 1.5 2004 I 4.2 4.9 r0.6 3.9 r2.1 -0.3 5.6 1.9 II 3.4 4.8 r1.3 3.3 0.5 -0.1 7.4 2.6 III r1.6 3.3 1.7 3.5 r0.8 1.9 3.8 2.6 IV 2.4 3.8 1.4 4.3 0.9 1.9 4.9 3.0 ANNUAL 2.9 4.2 1.3 r3.8 1.1 0.9 5.4 2.6 -------------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 2008 r=revised Source: Bureau of Labor Statistics

Appendix table 2. Nonfarm business sector: Revised 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 2003 I r125.1 144.6 r115.5 147.3 115.2 r117.7 r118.2 117.9 II r127.0 146.1 r115.1 r149.7 r116.9 r117.9 r118.2 118.0 III r130.1 150.0 r115.3 r151.7 r117.8 r116.6 r121.5 118.4 IV r130.0 150.6 r115.9 r153.0 r118.5 r117.7 r120.4 118.7 ANNUAL r128.0 147.8 r115.4 r150.4 r117.1 r117.5 r119.6 118.3 2004 I r130.2 151.5 r116.4 r152.9 r117.4 r117.4 r123.7 119.7 II r131.8 153.4 r116.4 r154.8 r117.7 r117.5 r126.0 120.6 III r132.1 154.9 r117.3 r156.9 r118.6 r118.8 r125.7 121.4 IV r132.2 155.9 r117.9 r158.9 r119.1 r120.2 r126.5 122.5 ANNUAL r131.6 153.9 r117.0 r155.9 r118.2 r118.5 r125.5 121.1 --------------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2003 I 3.4 1.2 -2.1 r5.6 r1.8 r2.1 r1.6 2.0 II r5.9 4.3 r-1.5 6.7 r6.3 r0.7 r-0.1 0.4 III r10.2 11.0 r0.8 5.4 r2.8 r-4.4 r11.6 1.3 IV r-0.4 1.6 r2.0 r3.5 r2.5 r3.9 r-3.3 1.1 ANNUAL 3.7 3.1 -0.6 4.0 1.7 0.3 3.1 1.3 2004 I r0.8 2.6 r1.8 -0.2 -3.6 -1.0 r11.2 3.4 II r4.8 5.0 r0.2 r5.1 r0.9 r0.2 r7.7 3.0 III 0.9 3.8 r2.9 r5.5 r3.1 r4.5 r-0.8 2.4 IV r0.5 2.6 r2.1 r5.3 r1.6 4.7 r2.3 3.8 ANNUAL r2.8 4.1 r1.3 3.6 0.9 0.9 4.9 2.4 --------------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2003 I 2.0 1.5 r-0.5 3.0 0.1 0.9 2.8 1.6 II 3.3 2.2 r-1.1 3.5 1.3 0.2 r3.0 1.2 III r4.7 4.1 -0.6 4.4 2.1 -0.4 4.2 1.3 IV 4.7 4.5 -0.2 r5.3 r3.4 0.5 2.3 1.2 ANNUAL 3.7 3.1 -0.6 4.0 1.7 0.3 3.1 1.3 2004 I r4.1 4.8 0.8 3.8 1.9 r-0.2 4.6 1.6 II 3.8 5.0 1.2 3.4 0.6 r-0.4 6.6 2.2 III 1.5 3.3 r1.7 3.4 r0.7 1.9 3.5 2.5 IV r1.7 3.5 1.7 3.9 0.5 2.1 5.0 3.2 ANNUAL r2.8 4.1 r1.3 3.6 0.9 0.9 4.9 2.4 -------------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 2008 r=revised Source: Bureau of Labor Statistics

Appendix table 3. Manufacturing sector: Revised 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 2003 I r157.4 137.3 r87.3 r154.6 r120.8 r98.2 II r159.2 136.5 r85.8 r157.3 r122.8 r98.8 III r162.5 137.2 r84.4 r159.5 r123.8 r98.1 IV r161.7 138.0 r85.4 r161.7 r125.2 r100.0 ANNUAL r160.2 137.3 r85.7 r158.2 r123.2 98.8 2004 I r161.6 138.4 r85.7 r156.8 r120.4 r97.0 II r163.1 139.1 r85.3 r159.8 r121.4 r98.0 III r164.1 140.0 r85.3 r163.6 r123.7 r99.7 IV r166.4 141.1 r84.8 r165.7 r124.2 r99.6 ANNUAL r163.8 139.7 r85.3 r161.5 r122.4 r98.6 -------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2003 I r8.8 2.1 r-6.2 r12.4 r8.4 3.3 II 4.7 -2.3 r-6.6 7.2 6.9 2.4 III r8.7 1.9 r-6.3 r5.8 r3.2 -2.7 IV r-2.1 2.6 r4.7 r5.7 r4.7 8.0 ANNUAL 6.2 1.0 -4.9 7.0 4.7 0.8 2004 I r-0.2 1.1 r1.3 r-11.6 r-14.6 r-11.4 II r3.7 2.1 r-1.5 r7.9 r3.6 r4.0 III r2.7 2.4 r-0.3 r9.9 r7.5 r7.0 IV r5.6 3.3 r-2.1 r5.3 r1.6 r-0.3 ANNUAL r2.3 1.8 r-0.5 2.0 -0.6 r-0.2 -------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2003 I r7.1 2.4 r-4.4 r7.0 r4.0 -0.1 II 6.1 0.4 -5.4 6.5 4.3 0.4 III 6.6 0.2 -6.0 r6.8 r4.5 0.3 IV r4.9 1.0 r-3.7 r7.7 5.8 2.7 ANNUAL 6.2 1.0 -4.9 7.0 4.7 0.8 2004 I r2.7 0.8 r-1.8 1.5 -0.4 r-1.2 II r2.4 1.9 r-0.5 1.6 -1.1 r-0.8 III r1.0 2.0 r1.0 2.6 -0.1 r1.6 IV r2.9 2.2 r-0.7 r2.5 -0.9 -0.4 ANNUAL r2.3 1.8 r-0.5 2.0 -0.6 r-0.2 ------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 2008 r=revised Source: Bureau of Labor Statistics

Appendix table 4. Durable manufacturing sector: Revised 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 2003 I r179.1 161.7 r90.3 r153.1 r119.7 r85.5 II r180.9 160.5 r88.7 r155.7 r121.7 86.1 III r186.1 162.2 r87.1 r158.2 r122.8 r85.0 IV r184.8 163.7 r88.6 r160.3 r124.2 r86.8 ANNUAL r182.7 162.0 r88.7 r156.8 r122.1 85.8 2004 I r184.5 164.8 r89.3 r152.4 r117.0 r82.6 II r185.1 165.0 r89.1 r155.6 r118.2 r84.1 III r185.7 166.1 r89.5 r159.7 r120.7 r86.0 IV r188.0 167.4 r89.1 r161.2 r120.7 r85.7 ANNUAL r185.8 165.8 r89.2 r157.2 r119.2 r84.6 -------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2003 I r7.7 1.0 r-6.1 r17.0 r12.8 8.7 II r4.2 -3.0 r-6.9 r7.1 r6.7 2.7 III r11.9 4.2 r-6.9 r6.4 r3.9 -4.9 IV r-2.8 3.9 r6.8 r5.6 r4.5 8.6 ANNUAL 7.1 1.4 -5.3 8.1 5.7 0.9 2004 I r-0.6 2.7 r3.4 r-18.5 r-21.3 r-18.0 II r1.4 0.4 r-1.0 8.8 4.5 r7.3 III r1.2 2.7 r1.5 r10.9 r8.5 r9.6 IV r5.1 3.2 r-1.8 r3.8 r0.2 r-1.2 ANNUAL r1.7 2.3 r0.6 0.2 -2.4 r-1.4 -------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2003 I r8.6 3.2 r-4.9 r8.0 r5.0 -0.5 II r7.0 0.5 -6.1 7.4 r5.1 0.3 III 7.8 0.5 -6.7 r8.2 5.8 0.4 IV r5.1 1.5 -3.5 r8.9 r6.9 3.6 ANNUAL 7.1 1.4 -5.3 8.1 5.7 0.9 2004 I r3.0 1.9 r-1.1 -0.5 -2.3 r-3.4 II r2.3 2.8 r0.5 -0.1 -2.8 r-2.4 III r-0.2 2.4 r2.7 1.0 -1.7 r1.2 IV r1.7 2.3 r0.5 0.5 -2.8 r-1.2 ANNUAL r1.7 2.3 r0.6 0.2 -2.4 r-1.4 ------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 2008 r=revised Source: Bureau of Labor Statistics

Appendix table 5. Nondurable manufacturing sector: Revised 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 2003 I r134.9 111.5 r82.7 r155.8 r121.8 115.5 II r136.6 111.1 r81.3 r158.6 r123.9 r116.2 III r138.1 110.9 r80.3 r160.5 r124.6 116.2 IV r138.0 111.2 r80.5 r162.6 r126.0 r117.8 ANNUAL r136.9 111.1 r81.2 r159.4 r124.0 116.4 2004 I r138.5 111.0 r80.1 r163.7 r125.6 r118.1 II r140.9 112.2 r79.6 r166.1 r126.2 117.9 III r142.8 112.8 r79.0 r169.2 r127.8 118.4 IV r145.0 113.8 r78.5 r172.5 r129.2 r119.0 ANNUAL r141.8 112.4 r79.3 r167.8 r127.2 118.3 -------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2003 I r9.9 3.1 r-6.2 r4.2 r0.4 -5.2 II r5.1 -1.5 r-6.2 r7.5 r7.2 2.3 III r4.6 -0.8 r-5.2 r4.8 r2.3 0.1 IV r-0.2 1.2 r1.3 r5.5 r4.4 r5.6 ANNUAL 4.8 0.4 -4.2 5.1 2.8 0.3 2004 I r1.4 -0.6 r-2.0 r2.5 r-1.0 1.0 II r7.0 4.4 r-2.4 r6.0 r1.8 -0.9 III r5.5 2.1 -3.2 r7.7 r5.3 2.0 IV r6.3 3.5 r-2.6 r8.1 r4.4 1.7 ANNUAL 3.6 1.2 r-2.4 5.3 r2.6 1.6 -------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2003 I 5.0 1.3 r-3.6 5.2 2.3 0.2 II r4.6 0.1 r-4.4 r5.2 2.9 0.5 III r4.6 -0.3 r-4.7 r4.6 r2.3 0.0 IV r4.8 0.5 r-4.1 r5.5 r3.5 0.6 ANNUAL 4.8 0.4 -4.2 5.1 2.8 0.3 2004 I 2.7 -0.4 r-3.1 r5.1 r3.2 2.3 II 3.2 1.0 -2.1 4.7 r1.8 1.4 III 3.4 1.8 -1.6 5.4 2.6 1.9 IV 5.0 2.3 r-2.6 r6.1 r2.6 1.0 ANNUAL 3.6 1.2 r-2.4 5.3 r2.6 1.6 ------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 2008 r=revised Source: Bureau of Labor Statistics

Appendix table 6. Nonfinancial corporate sector: Revised 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 2003 I r132.1 152.3 r115.3 r146.3 r114.3 110.7 112.6 111.2 102.9 110.5 II r133.8 153.6 r114.8 r148.8 r116.3 111.2 111.0 111.2 105.7 110.7 III r135.8 155.9 r114.8 r150.8 r117.1 111.0 110.7 110.9 112.8 111.1 IV r136.7 157.5 r115.3 r152.0 r117.7 111.2 110.0 110.9 117.8 111.5 ANNUAL r134.6 154.8 r115.0 r149.5 r116.3 111.0 111.1 111.0 109.9 110.9 2004 I r137.5 159.4 r116.0 r150.9 r115.9 109.8 109.6 109.7 135.2 112.0 II r138.9 161.5 r116.2 r152.8 r116.1 110.0 109.4 109.8 145.8 113.1 III r140.8 164.4 r116.8 r155.0 r117.1 110.1 109.2 109.8 150.6 113.5 IV r140.3 164.5 r117.3 r157.0 r117.6 111.9 109.7 111.3 148.4 114.6 ANNUAL r139.4 162.4 r116.6 r153.9 r116.7 110.5 109.5 110.2 145.1 113.3 ---------------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 2003 I r1.7 -1.8 r-3.5 r4.1 r0.3 2.3 11.4 4.7 -26.5 1.5 II r5.2 3.6 -1.6 r7.2 6.9 1.9 -5.6 -0.2 11.3 0.7 III r6.2 6.1 r-0.1 r5.3 r2.8 -0.8 -1.2 -0.9 29.4 1.4 IV r2.5 4.3 r1.8 r3.4 r2.3 0.9 -2.5 -0.1 18.9 1.6 ANNUAL 3.8 2.2 -1.5 4.1 1.8 0.3 0.2 0.3 12.1 1.2 2004 I r2.3 4.8 r2.5 r-2.9 r-6.2 -5.0 -1.5 -4.1 73.6 1.8 II r4.4 5.3 r0.8 r5.2 r1.0 0.8 -0.6 0.4 35.4 3.8 III r5.5 7.5 r2.0 r5.7 r3.4 0.3 -0.8 0.0 13.8 1.5 IV r-1.5 0.1 r1.6 5.3 r1.6 6.9 2.0 5.5 -5.7 4.1 ANNUAL 3.5 4.9 r1.3 3.0 0.3 -0.5 -1.4 -0.8 32.0 2.1 ---------------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 2003 I 3.8 2.0 -1.7 3.3 0.4 -0.5 -0.4 -0.4 20.0 1.0 II 3.5 1.5 -1.9 3.7 1.5 0.2 0.3 0.2 11.9 1.1 III r4.0 2.4 r-1.5 4.4 2.1 0.3 0.6 0.4 12.4 1.4 IV r3.9 3.0 r-0.9 r5.0 r3.1 1.0 0.3 0.8 5.9 1.3 ANNUAL 3.8 2.2 -1.5 4.1 1.8 0.3 0.2 0.3 12.1 1.2 2004 I 4.0 4.7 r0.6 r3.2 1.3 -0.8 -2.7 -1.3 31.3 1.4 II 3.8 5.1 1.2 2.7 -0.1 -1.1 -1.4 -1.2 37.9 2.2 III 3.6 5.5 1.8 r2.8 r0.1 -0.8 -1.4 -1.0 33.5 2.2 IV 2.6 4.4 1.7 3.3 -0.1 0.6 -0.2 0.4 26.0 2.8 ANNUAL 3.5 4.9 r1.3 3.0 0.3 -0.5 -1.4 -0.8 32.0 2.1 --------------------------------------------------------------------------------------------------------- See footnotes following Table 6. March 5, 2008 r=revised Source: Bureau of Labor Statistics.

**Last Modified Date:**March 05, 2008