Productivity and Costs News Release



Transmission of material in this release is embargoed until       USDL-09-1330
8:30 a.m. (EST) Thursday, November 5, 2009

Technical information: (202) 691-5606 •  dprweb@bls.gov • www.bls.gov/lpc
Media contact:         (202) 691-5902 •  PressOffice@bls.gov



                        PRODUCTIVITY AND COSTS
                    Third Quarter 2009, Preliminary

Nonfarm business sector labor productivity increased at a 9.5 percent 
annual rate during the third quarter of 2009, the U.S. Bureau of Labor 
Statistics reported today. This was the largest gain in productivity since 
the third quarter of 2003, when it rose 9.7 percent. Labor productivity, 
or output per hour, is calculated by dividing an index of real output by 
an index of hours of all persons, including employees, proprietors, and 
unpaid family workers. Output increased 4.0 percent and hours worked 
decreased 5.0 percent in the third quarter of 2009 (All quarterly percent 
changes in this release are seasonally adjusted annual rates). 

From the third quarter of 2008 to the third quarter of 2009, nonfarm 
business output fell 3.5 percent and hours worked fell faster, 7.5 
percent, resulting in a productivity increase of 4.3 percent (tables A and 2).
The four-quarter decline in hours was the largest in the series, which 
begins in 1948. Nonfarm business productivity rose 1.8 percent in 2008,
and 2.6 percent per year on average during the 2001-2007 period 
corresponding to the last complete business cycle.

Unit labor costs in nonfarm businesses fell 5.2 percent in the third 
quarter of 2009; the increase in productivity outpaced the increase in 
hourly compensation. Unit labor costs declined 3.6 percent over the last 
four quarters--the largest decrease since the series began in 1948 (tables A
and 2). BLS defines unit labor costs as the ratio of hourly 
compensation to labor productivity; increases in hourly compensation tend 
to increase unit labor costs and increases in output per hour tend to 
reduce them. 

Productivity increased 9.8 percent in the business sector in the third 
quarter of 2009. This was the largest increase in the series since the 
second quarter of 1972. Unit labor costs decreased 5.1 percent during the 
third quarter of 2009 (tables A and 1).

Manufacturing sector productivity grew 13.6 percent in the third quarter 
of 2009, as output increased 7.7 percent despite a 5.2 percent decrease in 
hours worked.  This was the largest increase in the quarterly productivity 
series, which begins in 1987. Over the last four quarters, manufacturing 
productivity increased 3.1 percent as output and hours declined 10.8 
percent and 13.5 percent respectively (tables A and 3). Manufacturing
sector productivity increased 0.8 percent in 2008, and at an average annual
rate of 4.0 percent from 2001 to 2007.

In the third quarter of 2009, changes in productivity, output, and hours 
were larger in durable goods producing industries than in nondurable goods 
industries (tables A, 4 and 5).

Manufacturing unit labor costs fell at a 7.1 percent annual rate in the 
third quarter of 2009, but increased 2.3 percent over the last four 
quarters (tables A and 3).  

The data sources and methods used in the preparation of the manufacturing 
output series differ from those used in preparing the business and nonfarm 
business output series, and these measures are not directly comparable. 
See Technical Notes for further information on data sources. 

Revised measures

In the second quarter of 2009, nonfarm business productivity growth was 
revised up to 6.9 percent, reflecting declines in output and hours of 1.1 
percent and 7.5 percent, respectively. Unit labor costs were revised down 
due to the upward revision in productivity. In the manufacturing sector, 
revised second quarter productivity growth was 6.8 percent, a 1.9 
percentage point upward revision. Manufacturing unit labor costs declined 
1.6 percent, rather than rising 0.2 percent as reported September 2.

In the nonfinancial corporate sector, revised data for the second quarter 
of 2009 show that productivity increased 6.6 percent, as output per hour 
was revised up along with output; hours were unrevised. After revision, 
unit labor costs fell 4.5 percent in the second quarter, but rose 1.4 
percent from the second quarter of 2008 to the second quarter of 2009.  
Unit profits grew at a 23.0 percent annual rate in the second quarter of 
2009.


______________
The revised Productivity and Costs press release for third-quarter 2009 is 
scheduled to be released on Thursday, December 3, 2009 at 8:30 a.m. (EST)


======================================================================================================
Table A. Preliminary third-quarter 2009 measures, percent change from previous quarter, annual rate 
(Q to Q) and from same quarter a year ago (Y to Y)

Sector                   Nonfarm                                         Durable         Nondurable
                         Business         Business       Manufacturing   Manufacturing   Manufacturing
                       Q to Q   Y to Y  Q to Q  Y to Y  Q to Q  Y to Y  Q to Q  Y to Y  Q to Q  Y to Y
------------------------------------------------------------------------------------------------------
     
Productivity            9.5       4.3    9.8     4.3     13.6     3.1     21.2    -0.9    5.5     4.7
Output                  4.0      -3.5    4.1    -3.3      7.7   -10.8     12.4   -16.9    3.4    -4.6
Hours                  -5.0      -7.5   -5.1    -7.4     -5.2   -13.5     -7.2   -16.1   -2.0    -8.9
Hourly 
 compensation           3.8       0.5    4.2     0.5      5.5     5.5      6.0     6.2    5.2     4.8
Real hourly
 compensation           0.2       2.1    0.5     2.1      1.9     7.1      2.3     7.9    1.6     6.4
Unit labor
 costs                 -5.2      -3.6   -5.1    -3.7     -7.1     2.3    -12.5     7.2   -0.3     0.1
 
======================================================================================================
Table B. Revised and previous measures for: second quarter 2009

Sector            Nonfarm                                             Durable           Nondurable
                  Business         Business         Manufacturing     Manufacturing     Manufacturing
              Revised Previous  Revised Previous  Revised Previous  Revised Previous  Revised Previous
------------------------------------------------------------------------------------------------------
                                     Percent change, annual rate
                                   
Productivity    6.9     6.6       6.8       6.5       6.8      4.9      3.7     3.1      5.2      2.2
Output         -1.1    -1.5      -1.0      -1.4      -8.1     -9.8    -15.9   -16.4     -0.2     -3.2
Hours          -7.5    -7.6      -7.4      -7.5     -13.9    -14.0    -18.9   -18.9     -5.1     -5.3
Hourly
 compensation   0.3     0.3       0.2       0.2       5.1      5.1      7.9     7.9      1.3      1.5
Real hourly
 compensation  -1.0    -1.0      -1.1      -1.2       3.7      3.7      6.5     6.5      0.0      0.2
Unit labor
 costs         -6.1    -5.9      -6.2      -6.0      -1.6      0.2      4.1     4.6     -3.7     -0.7

======================================================================================================
Table C. Nonfinancial corporations: revised second quarter 2009 productivity and cost measures

                                                        Real 
                                           Hourly       hourly        Unit                    Implicit
             Produc-                       compen-      compen-       labor       Unit        price
             tivity    Output     Hours    sation       sation        costs       profits     deflator
------------------------------------------------------------------------------------------------------
                                     Percent change, annual rate
                                
Revised       6.6      -2.2       -8.3       1.8         0.5          -4.5         23.0         -1.3
Previous      6.2      -2.6       -8.3       1.8         0.4          -4.2         22.5         -1.1
======================================================================================================





                              TECHNICAL NOTES

Labor Hours: Hours data for the labor productivity and cost measures 
include hours for all persons working in the sector—wage and salary 
workers, the self-employed and unpaid family workers.  The primary source 
of hours and employment data is the BLS Current Employment Statistics 
(CES) program, which provides monthly survey data on the number of jobs 
held by wage and salary workers in nonfarm establishments.  The CES also 
provides average weekly paid hours of production and nonsupervisory 
workers in these establishments.  Weekly paid hours are adjusted to hours 
at work using data from the National Compensation Survey (NCS).  The BLS 
Hours at Work survey, conducted for this purpose, was used for earlier 
years.  The Office of Productivity and Technology estimates average weekly 
hours at work for nonproduction and supervisory workers using information 
from the Current Population Survey (CPS), the CES, and the NCS.
     Data from the CPS are used for farm labor, nonfarm proprietors, and 
nonfarm unpaid family workers.  Estimates of labor input for government 
enterprises are derived from the CPS, the CES, and the National Income and 
Product Accounts (NIPA) prepared by the Bureau of Economic Analysis (BEA) 
of the Department of Commerce.
     The CES measures jobs, counting a person who is employed by two or 
more establishments at each place of employment. In contrast, the CPS 
features measures of employment that count each person only once and 
classify each person according to his or her primary job; hours worked at 
all jobs by that person accrue to his or her primary job.  However, the 
CPS also collects more detailed information on employment and hours worked 
at primary jobs and all other jobs, separately.  The BLS productivity 
measures use the more detailed information on employment and hours to 
assign all hours worked to the correct industrial sector and avoid 
duplicating hours data from the CES.

Output: Business sector output is a chain-type, current-weighted index 
constructed after excluding from gross domestic product (GDP) the 
following outputs: general government, nonprofit institutions, and private 
households (including owner-occupied housing). Corresponding exclusions 
also are made in labor inputs. Business output accounted for about 77 
percent of the value of GDP in 2005. Nonfarm business, which excludes 
farming, accounted for about 76 percent of GDP in 2005.

     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 50 percent of the value of GDP in 2005.
     
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

2007       I     139.0      168.4     121.2     175.2       122.7      126.0       136.7      130.0
          II     140.2      169.8     121.2     176.5       122.4      125.9       139.4      130.9
         III     142.1      171.4     120.6     177.8       122.6      125.1       141.9      131.4
          IV     142.6      172.3     120.8     179.6       122.1      125.9       141.9      131.9

      ANNUAL     141.0      170.5     120.9     177.3       122.4      125.7       140.0      131.0

2008       I     142.7      171.7     120.3     180.3       121.2      126.3       141.7      132.1
          II     143.8      172.2     119.8     181.0       120.4      125.9       143.8      132.5
         III     143.9      170.6     118.6     183.0       119.9      127.2       145.4      134.0
          IV     144.2      167.4     116.1     184.2       123.3      127.7       143.6      133.6

      ANNUAL     143.6      170.5     118.7     182.1       121.1      126.8       143.6      133.0

2009       I     144.3      163.6     113.4     182.0       122.6      126.1       148.1      134.3
          II    r146.7     r163.2    r111.3    r182.1      r122.2     r124.1      r151.2     r134.2
         III     150.1      164.9     109.8     183.9       122.4      122.5       154.5      134.4
---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

2007       I       0.9        0.8      -0.1       4.4         0.6        3.5         4.8        4.0
          II       3.5        3.5       0.0       3.1        -1.1       -0.4         8.0        2.8
         III       5.5        3.7      -1.7       3.0         0.6       -2.4         7.4        1.4
          IV       1.6        2.1       0.5       4.3        -1.4        2.6         0.2        1.6

      ANNUAL       1.8        2.2       0.4       4.2         1.3        2.4         3.0        2.6

2008       I       0.2       -1.3      -1.5       1.5        -3.0        1.3        -0.5        0.6
          II       3.1        1.1      -1.9       1.6        -2.8       -1.5         5.9        1.4
         III       0.3       -3.7      -4.0       4.5        -1.6        4.2         4.5        4.3
          IV       0.8       -7.2      -8.0       2.6        12.0        1.8        -4.9       -1.0

      ANNUAL       1.9        0.0      -1.9       2.7        -1.1        0.8         2.6        1.5

2009       I       0.2       -8.7      -8.9      -4.7        -2.4       -4.9        13.3        2.1
          II      r6.8      r-1.0     r-7.4       0.2       r-1.1      r-6.2        r8.7      r-0.3
         III       9.8        4.1      -5.1       4.2         0.5       -5.1         9.1        0.7
---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

2007       I       0.3        1.5       1.1       4.0         1.6        3.7         1.6        2.9
          II       1.0        2.0       0.9       4.4         1.7        3.3         1.9        2.8
         III       3.0        3.0       0.0       4.8         2.4        1.7         3.3        2.4
          IV       2.9        2.5      -0.3       3.7        -0.3        0.8         5.1        2.5

      ANNUAL       1.8        2.2       0.4       4.2         1.3        2.4         3.0        2.6

2008       I       2.7        2.0      -0.7       2.9        -1.2        0.2         3.7        1.6
          II       2.6        1.4      -1.2       2.6        -1.7        0.0         3.2        1.2
         III       1.3       -0.5      -1.7       2.9        -2.2        1.6         2.5        2.0
          IV       1.1       -2.8      -3.9       2.5         1.0        1.4         1.2        1.3

      ANNUAL       1.9        0.0      -1.9       2.7        -1.1        0.8         2.6        1.5

2009       I       1.1       -4.7      -5.7       0.9         1.1       -0.2         4.5        1.7
          II      r2.0      r-5.2      -7.1       0.6         1.5      r-1.4        r5.2        1.3
         III       4.3       -3.3      -7.4       0.5         2.1       -3.7         6.3        0.4
---------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                       November 5, 2009
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

2007       I     138.2      168.8     122.1     174.2       122.1      126.0       138.2      130.5
          II     139.2      170.3     122.4     175.1       121.4      125.8       140.9      131.4
         III     141.1      172.0     121.9     176.3       121.5      125.0       143.3      131.7
          IV     141.8      172.8     121.9     178.5       121.3      125.9       143.0      132.2

      ANNUAL     140.1      171.0     122.1     176.0       121.6      125.7       141.4      131.5

2008       I     141.7      172.0     121.4     179.2       120.5      126.4       142.5      132.3
          II     142.8      172.6     120.8     179.8       119.6      125.9       144.9      132.9
         III     142.8      170.8     119.6     181.8       119.1      127.3       146.6      134.4
          IV     143.1      167.5     117.0     183.1       122.6      128.0       145.3      134.3

      ANNUAL     142.6      170.7     119.7     181.0       120.4      126.9       144.8      133.5

2009       I     143.2      163.7     114.3     180.9       121.9      126.3       150.5      135.2
          II    r145.6     r163.2    r112.1    r181.1      r121.6     r124.3      r153.6     r135.1
         III     148.9      164.9     110.7     182.8       121.6      122.7       157.3      135.4
---------------------------------------------------------------------------------------------------------
                       Percent change from previous quarter at annual rate(5)

2007       I       1.2        0.9      -0.3       4.7         0.8        3.5         3.9        3.6
          II       2.8        3.7       0.9       2.0        -2.1       -0.7         8.1        2.7
         III       5.5        3.9      -1.5       2.7         0.3       -2.7         7.0        1.1
          IV       2.0        1.8      -0.2       5.0        -0.7        3.0        -0.9        1.4

      ANNUAL       1.8        2.3       0.5       4.2         1.3        2.3         2.4        2.3

2008       I      -0.1       -1.7      -1.6       1.7        -2.8        1.7        -1.5        0.5
          II       3.1        1.3      -1.7       1.3        -3.0       -1.8         6.9        1.6
         III      -0.1       -4.0      -3.9       4.5        -1.6        4.6         4.7        4.6
          IV       0.8       -7.6      -8.3       2.9        12.3        2.0        -3.5       -0.2

      ANNUAL       1.8       -0.1      -1.9       2.8        -1.0        1.0         2.4        1.5

2009       I       0.3       -8.8      -9.0      -4.7        -2.4       -5.0        15.2        2.7
          II      r6.9      r-1.1     r-7.5       0.3        -1.0      r-6.1        r8.5       -0.3
         III       9.5        4.0      -5.0       3.8         0.2       -5.2        10.0        0.9
---------------------------------------------------------------------------------------------------------
                      Percent change from corresponding quarter of previous year

2007       I       0.5        1.5       0.9       4.3         1.8        3.7         1.0        2.7
          II       1.1        2.1       1.1       4.3         1.6        3.1         1.3        2.4
         III       2.9        3.2       0.2       4.6         2.2        1.6         2.8        2.1
          IV       2.8        2.6      -0.3       3.6        -0.4        0.7         4.5        2.2

      ANNUAL       1.8        2.3       0.5       4.2         1.3        2.3         2.4        2.3

2008       I       2.5        1.9      -0.6       2.9        -1.3        0.3         3.1        1.4
          II       2.6        1.3      -1.3       2.7        -1.5        0.1         2.8        1.1
         III       1.2       -0.7      -1.9       3.1        -2.0        1.9         2.3        2.0
          IV       0.9       -3.0      -4.0       2.6         1.0        1.6         1.6        1.6

      ANNUAL       1.8       -0.1      -1.9       2.8        -1.0        1.0         2.4        1.5

2009       I       1.0       -4.8      -5.8       0.9         1.1       -0.1         5.6        2.2
          II       1.9      r-5.4      -7.2       0.7        r1.7       -1.2        r6.0        1.7
         III       4.3       -3.5      -7.5       0.5         2.1       -3.6         7.3        0.8
---------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                       November 5, 2009
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

2007       I            176.9        148.0         83.7        172.9          121.1          97.7
          II            178.2        149.3         83.8        172.9          119.9          97.0
         III            180.1        150.3         83.4        172.9          119.2          96.0
          IV            181.6        150.4         82.8        175.6          119.4          96.7

      ANNUAL            179.2        149.5         83.4        173.6          119.9          96.9

2008       I            182.8        149.9         82.0        175.7          118.1          96.1
          II            181.6        148.0         81.5        176.9          117.6          97.4
         III            180.3        144.4         80.1        178.8          117.1          99.2
          IV            178.1        137.2         77.0        183.9          123.1         103.2

      ANNUAL            180.7        144.9         80.2        178.7          118.9          98.9

2009       I           r177.0       r129.1         72.9        183.7          123.7        r103.8
          II           r179.9       r126.4        r70.2       r186.0         r124.9        r103.4
         III            185.8        128.8         69.3        188.5          125.4         101.5
--------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

2007       I              3.7          1.8         -1.9          8.2            4.2           4.3
          II              3.0          3.4          0.4          0.0           -4.1          -3.0
         III              4.4          2.7         -1.6          0.1           -2.2          -4.1
          IV              3.3          0.3         -2.9          6.5            0.7           3.1

      ANNUAL              3.2          1.3         -1.8          4.3            1.4           1.1

2008       I              2.6         -1.2         -3.7          0.1           -4.3          -2.5
          II             -2.5         -5.2         -2.7          2.8           -1.6           5.4
         III             -2.9         -9.3         -6.5          4.3           -1.7           7.5
          IV             -4.7        -18.4        -14.4         12.0           22.2          17.5

      ANNUAL              0.8         -3.1         -3.9          3.0           -0.8           2.1

2009       I            r-2.5       r-21.7        -19.8         -0.4            2.0          r2.2
          II             r6.8        r-8.1       r-13.9          5.1            3.7         r-1.6
         III             13.6          7.7         -5.2          5.5            1.9          -7.1
--------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

2007       I              2.5          0.4         -2.0          4.3            1.9           1.8
          II              3.3          1.3         -2.0          4.9            2.1           1.5
         III              3.3          1.6         -1.6          4.5            2.1           1.2
          IV              3.6          2.0         -1.5          3.6           -0.4           0.0

      ANNUAL              3.2          1.3         -1.8          4.3            1.4           1.1

2008       I              3.3          1.3         -2.0          1.6           -2.5          -1.7
          II              1.9         -0.9         -2.7          2.3           -1.9           0.4
         III              0.1         -3.9         -4.0          3.4           -1.8           3.3
          IV             -1.9         -8.7         -7.0          4.7            3.1           6.7

      ANNUAL              0.8         -3.1         -3.9          3.0           -0.8           2.1

2009       I            r-3.1        -13.9        -11.1          4.6            4.8           8.0
          II            r-0.9       r-14.6        -13.8          5.2            6.2          r6.1
         III              3.1        -10.8        -13.5          5.5            7.1           2.3
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                November 5, 2009
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

2007       I            204.1        180.4         88.4        168.0          117.7          82.3
          II            206.9        183.0         88.5        167.3          116.0          80.9
         III            209.7        185.0         88.2        167.5          115.5          79.9
          IV            212.9        185.7         87.2        170.1          115.6          79.9

      ANNUAL            208.4        183.5         88.1        168.2          116.2          80.7

2008       I            213.6        185.3         86.8        169.5          113.9          79.4
          II            211.1        181.8         86.1        171.2          113.8          81.1
         III            212.2        178.1         83.9        173.7          113.8          81.8
          IV            204.3        165.1         80.8        178.1          119.2          87.2

      ANNUAL            210.4        177.6         84.4        173.0          115.1          82.2

2009       I           r198.7       r150.1         75.6        178.4          120.1         r89.8
          II           r200.5       r143.7         71.7       r181.8         r122.1         r90.7
         III            210.4        148.0         70.4        184.5          122.8          87.7
--------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

2007       I              4.2          1.2         -2.9         10.1            6.0           5.6
          II              5.6          6.0          0.4         -1.7           -5.7          -6.9
         III              5.6          4.4         -1.1          0.4           -1.9          -4.9
          IV              6.3          1.4         -4.5          6.3            0.5           0.1

      ANNUAL              4.0          1.8         -2.1          4.7            1.8           0.7

2008       I              1.2         -0.9         -2.0         -1.4           -5.7          -2.5
          II             -4.6         -7.3         -2.9          4.1           -0.4           9.1
         III              2.2         -7.9         -9.9          5.9           -0.2           3.6
          IV            -14.2        -26.2        -14.1         10.5           20.6          28.8

      ANNUAL              0.9         -3.3         -4.2          2.8           -1.0           1.9

2009       I           r-10.5       r-31.6        -23.5          0.7            3.1         r12.6
          II             r3.7       r-15.9        -18.9          7.9            6.5          r4.1
         III             21.2         12.4         -7.2          6.0            2.3         -12.5
--------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

2007       I              2.6          0.3         -2.3          4.9            2.4           2.2
          II              4.1          1.4         -2.6          5.3            2.6           1.2
         III              4.0          2.3         -1.6          5.0            2.7           1.0
          IV              5.4          3.2         -2.1          3.7           -0.3          -1.6

      ANNUAL              4.0          1.8         -2.1          4.7            1.8           0.7

2008       I              4.6          2.7         -1.8          0.9           -3.2          -3.6
          II              2.0         -0.7         -2.6          2.3           -1.9           0.3
         III              1.2         -3.7         -4.9          3.7           -1.5           2.5
          IV             -4.1        -11.1         -7.3          4.7            3.1           9.1

      ANNUAL              0.9         -3.3         -4.2          2.8           -1.0           1.9

2009       I             -7.0        -19.0        -12.9          5.3            5.5         r13.1
          II            r-5.0       r-20.9        -16.8          6.2            7.2         r11.8
         III             -0.9        -16.9        -16.1          6.2            7.9           7.2
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                November 5, 2009
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

2007       I            151.3        115.9         76.6        179.7          125.9         118.8
          II            151.4        116.0         76.7        181.2          125.6         119.7
         III            152.6        116.3         76.2        180.9          124.7         118.5
          IV            152.3        116.0         76.2        184.1          125.1         120.8

      ANNUAL            151.9        116.1         76.4        181.5          125.3         119.5

2008       I            154.3        115.6         74.9        185.2          124.5         120.0
          II            154.2        114.8         74.4        185.3          123.2         120.2
         III            150.1        111.6         74.4        186.3          122.1         124.1
          IV            152.3        108.7         71.4        192.8          129.1         126.6

      ANNUAL            152.7        112.7         73.8        187.4          124.6         122.7

2009       I           r153.2       r105.6         69.0        192.1          129.4        r125.4
          II           r155.1       r105.6        r68.1       r192.8         r129.4        r124.3
         III            157.2        106.5         67.7        195.2          129.9         124.2
--------------------------------------------------------------------------------------------------
                         Percent change from previous quarter at annual rate(5)

2007       I              2.4          2.4          0.0          4.9            1.1           2.4
          II              0.3          0.7          0.4          3.3           -0.9           3.0
         III              3.4          0.8         -2.5         -0.6           -2.9          -3.9
          IV             -0.9         -0.9          0.0          7.1            1.3           8.0

      ANNUAL              2.0          0.9         -1.1          3.6            0.8           1.6

2008       I              5.4         -1.4         -6.5          2.6           -1.9          -2.7
          II             -0.4         -2.8         -2.5          0.2           -4.0           0.6
         III            -10.2        -10.6         -0.5          2.1           -3.8          13.7
          IV              6.0         -9.9        -15.0         14.7           25.2           8.2

      ANNUAL              0.6         -2.9         -3.4          3.3           -0.6           2.7

2009       I             r2.2       r-11.1        -13.0         -1.5            0.9         r-3.6
          II             r5.2        r-0.2        r-5.1         r1.3           r0.0         r-3.7
         III              5.5          3.4         -2.0          5.2            1.6          -0.3
--------------------------------------------------------------------------------------------------
                     Percent change from corresponding quarter of previous year

2007       I              2.3          0.7         -1.6          3.4            0.9           1.1
          II              2.1          1.2         -0.9          4.1            1.4           2.0
         III              2.5          0.9         -1.6          3.4            1.1           0.9
          IV              1.3          0.8         -0.5          3.7           -0.4           2.3

      ANNUAL              2.0          0.9         -1.1          3.6            0.8           1.6

2008       I              2.0         -0.2         -2.2          3.1           -1.1           1.0
          II              1.9         -1.1         -2.9          2.3           -1.9           0.4
         III             -1.7         -4.0         -2.4          3.0           -2.1           4.7
          IV              0.0         -6.3         -6.3          4.8            3.2           4.8

      ANNUAL              0.6         -2.9         -3.4          3.3           -0.6           2.7

2009       I             -0.8         -8.7         -8.0          3.7            3.9          r4.5
          II             r0.6        r-8.1         -8.6         r4.0           r5.0          r3.4
         III              4.7         -4.6         -8.9          4.8            6.4           0.1
--------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                November 5, 2009
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

2007       I    143.5    175.1     122.0    164.2     115.0     114.4    123.1    116.8    171.2    121.8
          II    144.5    176.5     122.1    165.2     114.6     114.4    124.9    117.2    171.8    122.2
         III    144.1    175.8     122.0    166.2     114.5     115.3    127.4    118.6    155.6    122.0
          IV    145.9    178.5     122.3    168.3     114.4     115.3    127.9    118.7    149.9    121.6

      ANNUAL    144.5    176.5     122.1    166.0     114.6     114.9    125.8    117.8    162.1    121.9

2008       I    145.0    176.9     122.0    168.6     113.4     116.3    129.1    119.8    133.0    121.0
          II    147.4    178.8     121.3    169.7     112.9     115.1    129.2    118.9    134.7    120.4
         III    148.6    178.4     120.1    171.8     112.5     115.6    129.8    119.4    145.3    121.8
          IV    148.0    174.6     117.9    173.7     116.3     117.3    134.1    121.8    129.5    122.5

      ANNUAL    147.2    177.2     120.3    170.9     113.7     116.1    130.5    120.0    135.7    121.4

2009       I    145.3    166.6     114.7    171.6     115.6     118.1    139.1    123.8    127.5    124.1
          II   r147.6   r165.7    r112.3   r172.4    r115.7    r116.8   r138.5   r122.6   r134.3   r123.7
----------------------------------------------------------------------------------------------------------
                             Percent change from previous quarter at annual rate(5)

2007       I     -0.2      0.2       0.4      4.3       0.4       4.5      7.5      5.3    -10.2      3.2
          II      2.8      3.2       0.4      2.5      -1.6      -0.3      5.8      1.4      1.5      1.4
         III     -1.1     -1.5      -0.4      2.3      -0.1       3.4      8.2      4.8    -32.7     -0.7
          IV      5.3      6.2       0.9      5.3      -0.4       0.0      1.5      0.5    -13.8     -1.3

      ANNUAL      1.0      1.7       0.7      3.6       0.8       2.6      5.8      3.5     -9.9      1.7

2008       I     -2.7     -3.6      -1.0      0.7      -3.7       3.5      3.9      3.6    -38.0     -1.9
          II      6.9      4.4      -2.4      2.6      -1.8      -4.0      0.5     -2.7      5.0     -2.0
         III      3.2     -0.8      -3.9      4.9      -1.2       1.6      1.8      1.6     35.5      4.8
          IV     -1.4     -8.3      -6.9      4.6      14.1       6.1     13.9      8.3    -37.0      2.4

      ANNUAL      1.9      0.4      -1.5      3.0      -0.8       1.1      3.7      1.8    -16.3     -0.4

2009       I     -7.3    -17.1     -10.5     -4.7      -2.4       2.9     15.8      6.6     -5.8      5.3
          II     r6.6    r-2.2      -8.3      1.8      r0.5     r-4.5    r-1.6    r-3.6    r23.0    r-1.3
----------------------------------------------------------------------------------------------------------
                          Percent change from corresponding quarter of previous year

2007       I      0.3      1.4       1.1      3.3       0.8       2.9      5.5      3.7     -3.0      2.8
          II      1.7      2.6       0.9      3.7       1.0       2.0      5.0      2.8     -2.2      2.1
         III      0.5      0.9       0.4      4.0       1.6       3.5      7.0      4.5    -18.7      1.1
          IV      1.6      2.0       0.3      3.6      -0.4       1.9      5.7      3.0    -14.7      0.6

      ANNUAL      1.0      1.7       0.7      3.6       0.8       2.6      5.8      3.5     -9.9      1.7

2008       I      1.0      1.0       0.0      2.7      -1.5       1.7      4.8      2.6    -22.3     -0.6
          II      2.0      1.3      -0.7      2.7      -1.5       0.7      3.5      1.5    -21.6     -1.5
         III      3.1      1.5      -1.6      3.4      -1.8       0.2      1.9      0.7     -6.6     -0.1
          IV      1.4     -2.2      -3.6      3.2       1.6       1.7      4.9      2.6    -13.6      0.8

      ANNUAL      1.9      0.4      -1.5      3.0      -0.8       1.1      3.7      1.8    -16.3     -0.4

2009       I      0.2     -5.8      -6.0      1.8       2.0       1.6      7.7      3.4     -4.1      2.6
          II     r0.1    r-7.3      -7.4      1.6       2.5      r1.4     r7.2     r3.1    r-0.3      2.8
----------------------------------------------------------------------------------------------------------
See footnotes following Table 6.                                        November 5, 2009
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 
2009.

                         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 1978-2008 is based on 
the Consumer Price Index research series (CPI-U-RS).

(3)  Unit nonlabor payments include profits, consumption of fixed 
capital, taxes on production and imports less subsidies, net interest and 
miscellaneous payments, business current transfer payments, rental income 
of persons, and the current surplus of government enterprises.

(4)  Current dollar output divided by the output index.

(5)  Quarterly changes:  Percent change compounded at annual rate is 
calculated using index numbers to three decimal places.  Indexes 
published in the news release are rounded to one decimal place for 
convenience.  Annual changes:  Percent change is calculated using annual 
average indexes to three decimal places.

(6)  Unit nonlabor costs include consumption of fixed capital, taxes on 
production and imports less subsidies, net interest and miscellaneous 
payments, and business current transfer payments.

(7)  Total unit costs are the sum of unit labor and nonlabor costs.

(8)  Unit profits include corporate profits before tax with inventory 
valuation and capital consumption adjustments.


Last Modified Date: November 05, 2009