USDL 00-319 TRANSMISSION OF THIS MATERIAL IS EMBARGOED UNTIL 8:30 A.M. EST, THURSDAY, NOVEMBER 2, 2000. Internet address: http://stats.bls.gov/lprhome.htm Historical, technical information: (202) 691-5606 Current data: (202) 691-5200 Media contact: (202) 691-5902 PRODUCTIVITY AND COSTS Third Quarter 2000 The Bureau of Labor Statistics of the U.S. Department of Labor today reported preliminary productivity data--as measured by output per hour of all persons--for the third quarter of 2000. The preliminary seasonally-adjusted annual rates of productivity growth in the third quarter were: 3.2 percent in the business sector and 3.8 percent in the nonfarm business sector. In both the business and the nonfarm business sectors, productivity increases in the third quarter were smaller than those recorded in the second quarter of 2000 (as revised). In manufacturing, productivity increases in the third quarter were: 6.4 percent in manufacturing, 9.6 percent in durable goods manufacturing, and 2.0 percent in nondurable goods manufacturing. The increase in manufacturing productivity was higher than the 5.7- percent rise reported for the previous quarter (as revised). Output and hours in manufacturing, which includes about 17 percent of U.S. business sector employment, tend to vary more from quarter to quarter than data for the more aggregate business and nonfarm business sectors. Third-quarter measures are summarized in table A and appear in detail in tables 1 through 5. The data sources and methods used in the preparation of the manufacturing series differ from those used in preparing the business and nonfarm business series, and these measures are not directly comparable. Output measures for business and nonfarm business are based on measures of gross domestic product prepared by the Bureau of Economic Analysis of the U.S. Department of Commerce. Quarterly output measures for manufacturing reflect indexes of industrial production independently prepared by the Board of Governors of the Federal Reserve System. See Technical Notes for further information on data sources. ------------------------------------------------------------------------- Table A. Productivity and costs: Preliminary third-quarter 2000 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 3.2 3.0 -0.2 5.8 2.7 2.5 Nonfarm business 3.8 3.0 -0.8 6.4 3.2 2.5 Manufacturing 6.4 3.1 -3.0 6.7 3.5 0.3 Durable 9.6 6.0 -3.3 5.9 2.8 -3.4 Nondurable 2.0 -0.6 -2.6 8.1 4.9 5.9 ------------------------------------------------------------------------- Percent change from same quarter a year ago Business 4.8 6.1 1.2 5.0 1.5 0.2 Nonfarm business 5.0 6.1 1.1 5.1 1.6 0.1 Manufacturing 7.5 6.3 -1.2 5.0 1.5 -2.4 Durable 10.9 9.9 -0.9 4.8 1.3 -5.5 Nondurable 3.2 1.5 -1.6 5.3 1.8 2.0 ------------------------------------------------------------------------- Business From the second quarter to the third quarter of 2000, business sector productivity increased at a 3.2 percent annual rate. Output rose 3.0 percent, while hours of all persons engaged in the sector declined 0.2 percent (seasonally adjusted annual rates). After revisions, second-quarter productivity in the business sector rose 6.9 percent, reflecting a 6.3- percent increase in output and a drop of 0.6 percent in hours (tables B and 1). Hourly compensation increased at an annual rate of 5.8 percent during the third quarter of 2000, after increasing 7.0 percent during the second quarter. 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, increased 2.7 percent in the third quarter, after rising 3.2 percent in the second quarter of 2000. Unit labor costs, which reflect changes in both hourly compensation and productivity, increased at a 2.5 percent annual rate during the third quarter. During the previous quarter, these costs were unchanged. The implicit price deflator for the business sector increased 1.7 percent in the third quarter and 2.4 percent in the second quarter. Nonfarm business Productivity rose 3.8 percent in the nonfarm business sector during the third quarter of 2000. The increase in labor productivity in the third quarter occurred as output rose 3.0 percent and hours of all persons fell 0.8 percent. This decline in hours was the largest since the first quarter of 1992, when hours fell 2.3 percent. In the previous quarter, productivity had risen 6.1 percent, as output grew 6.5 percent and hours increased 0.4 percent (table 2). Hourly compensation increased at a 6.4 percent annual rate in the third quarter of 2000. This was the largest increase in this measure since the first quarter of 1992, when it increased 8.8 percent. When the rise in consumer prices is taken into account, real hourly compensation rose at a 3.2- percent annual rate during the July-September period. During the second quarter of 2000, real hourly compensation had risen 2.2 percent. Unit labor costs increased 2.5 percent during the third quarter of 2000. In the second quarter, unit labor costs in the nonfarm business sector had declined 0.2 percent. The implicit price deflator for nonfarm business output rose 1.8 percent in the third quarter of 2000. Manufacturing Productivity increased 6.4 percent in manufacturing in the third quarter of 2000, as output grew 3.1 percent and hours of all persons dropped 3.0 percent (seasonally adjusted annual rates). A similar increase in labor productivity, 5.7 percent, was recorded in the previous quarter, reflecting increases in output and hours of 7.7 and 1.9 percent, respectively. In durable goods, productivity rose 9.6 percent in the third quarter, as output increased 6.0 percent and hours of all persons fell 3.3 percent. Productivity grew more slowly in nondurable goods, 2.0 percent, as hours fell faster than output. Output dropped 0.6 percent, and hours of all persons decreased 2.6 percent (tables 3, 4, and 5). Hourly compensation of manufacturing workers increased an average of 6.7 percent during the third quarter, a more rapid rise than the 4.0-percent increase recorded in the previous quarter (seasonally adjusted annual rates). In the third quarter, hourly compensation grew 5.9 percent in durable goods and 8.1 percent in nondurable goods. When the increase in consumer prices is taken into account, real hourly compensation in total manufacturing rose 3.5 percent in the third quarter. Unit labor costs increased 0.3 percent in the third quarter of 2000 after falling 1.6 percent in the second quarter of 2000. In the durable goods sector, unit labor costs in the third quarter fell 3.4 percent; these costs also had fallen in the previous three quarters. In contrast, unit labor costs in the nondurable goods sector rose 5.9 percent in the third quarter, following a 5.4-percent rise in the previous quarter. Revised Measures Current and previous measures for the second quarter of 2000 for the business, nonfarm business, and manufacturing sectors are compared in table B. In all these sectors, productivity, output, and hourly compensation increased faster than reported on Sept. 6, based on information then available. In all sectors, small revisions to real hourly compensation in the first and second quarters of 2000 were made as a result of incorporating the recalculated Consumer Price Index. In manufacturing, historical output has been revised for consistency with estimates published Sept. 21, 2000. (See Multifactor Productivity Trends, 1998, USDL 00-267.) Appendix tables 1-3 present annual indexes for the years 1949-99 for the manufacturing measures. ------------------------------------------------------------------------- Table B. Previous and revised productivity and related measures Quarterly percent change at seasonally adjusted annual rate ------------------------------------------------------------------------- Real Hourly hourly Unit Produc- compen- compen- labor Sector tivity Output Hours sation sation costs ------------------------------------------------------------------------- Second quarter 2000 Business: Previous 6.5 5.9 -0.6 6.4 2.7 -0.1 Current 6.9 6.3 -0.6 7.0 3.2 0.0 Nonfarm business: Previous 5.7 6.1 0.4 5.3 1.7 -0.4 Current 6.1 6.5 0.4 5.9 2.2 -0.2 Manufacturing: Previous 5.4 7.3 1.9 3.3 -0.3 -2.0 Current 5.7 7.7 1.9 4.0 0.4 -1.6 ------------------------------------------------------------------------- Revised measures: Nonfinancial Corporations Second-quarter 2000 productivity and cost measures for nonfinancial corporations also were revised to incorporate more recent information than was available on Sept. 6. Productivity, output, and hourly compensation were revised up, while hours growth was unchanged. Productivity grew at an annual rate of 5.4 percent, compared with the previously published growth of 5.0 percent (tables C and 6). ---------------------------------------------------------------------------- Table C. Nonfinancial corporations: Previous and revised productivity and cost measures Quarterly percent changes at seasonally adjusted annual rates ---------------------------------------------------------------------------- Real Hourly hourly Unit Implicit Produc- compen- compen- labor Unit price tivity Output Hours sation sation costs profits deflator ---------------------------------------------------------------------------- Second quarter 2000 Previous 5.0 5.9 0.9 5.6 1.9 0.6 13.5 2.4 Current 5.4 6.4 0.9 6.1 2.3 0.6 11.3 2.3 ---------------------------------------------------------------------------- Next release date The next release of Productivity and Costs is scheduled for 8:30 AM EST, Wednesday, Dec. 6, 2000. Third-quarter measures for nonfinancial corporations and revised third-quarter measures for business, nonfarm business, and manufacturing will be released at that time. TECHNICAL NOTES Labor Hours: Hours data for the labor productivity and cost measures include hours for all persons working in the sector-wage and salary workers, the self- employed, and unpaid family workers. The primary source of hours and employment data is the BLS Current Employment Statistics (CES) program, which provides monthly survey data on the number of jobs held by wage and salary workers in nonfarm establishments. The CES also provides average weekly paid hours of production and nonsupervisory workers in these establishments. Average weekly paid hours of nonproduction and supervisory workers are estimated by the Office of Productivity and Technology. Weekly paid hours are adjusted to hours at work using the BLS Hours at Work survey, conducted for this purpose. Data from the BLS Current Population Survey (CPS) are used for farm labor; in the nonfarm sector, the National Income and Product Accounts (NIPA) prepared by the Bureau of Economic Analysis (BEA) of the Department of Com merce and the CPS are used to measure labor input for government enterprises, proprietors, and unpaid family workers. Output: Business sector output is an annual-weighted index constructed after excluding from gross domestic product (GDP) the following outputs: General government, nonprofit institutions, paid employees of private households, and the rental value of owner-occupied dwellings. Corresponding exclusions also are made in labor inputs. Business output accounted for about 77 percent of the value of GDP in 1996. Nonfarm business, which also excludes farming, accounted for about 76 percent of GDP in 1996. 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 BEA. 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 2-digit SIC industries: Primary metal industries; fabricated metal products; nonelectrical machinery; industrial and commercial machinery and computer equipment; electronic and other electrical equipment; transportation equipment; instruments; lumber and lumber products; furniture and fixtures; stone, clay, and glass and concrete products; and miscellaneous manufactures. Nondurables include: Food and kindred products, tobacco products, textile mill products, apparel products, paper and allied products, printing and publishing, chemicals and chemical products, petroleum refining and related industries, rubber and plastic products, and leather and leather products. Nonfinancial corporate output is an annual-weighted index constructed by excluding from GDP the following outputs: General government; nonprofit institutions; employees of private households; the rental value of owner-oc cupied dwellings; unincorporated business; and those corporations which are depository institutions, nondepository institutions, security and commodity brokers, insurance carriers, regulated investment offices, small business investment offices, and real estate investment trusts. Nonfinancial corporations accounted for about 53 percent of the value of GDP in 1996. 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. Information in this release will be made available to sensory-impaired individuals upon request. Voice phone: 202-691-5200; 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 1998 I 109.7 126.8 115.6 117.1 102.9 106.7 116.4 110.3 II 110.0 127.7 116.1 118.5 103.8 107.7 115.1 110.5 III 110.6 128.9 116.6 120.0 104.7 108.5 114.6 110.7 IV 111.6 131.0 117.4 121.4 105.5 108.8 114.6 110.9 ANNUAL 110.5 128.6 116.4 119.3 104.3 107.9 115.2 110.6 1999 I 112.6 132.3 117.5 123.0 106.4 109.3 115.1 111.4 II 112.8 133.1 118.0 124.5 106.9 110.4 114.1 111.8 III 114.2 135.3 118.5 126.1 107.6 110.5 114.3 111.9 IV 116.3 138.5 119.1 127.3 107.8 109.5 116.8 112.2 ANNUAL 114.0 134.8 118.3 125.2 107.3 109.9 115.1 111.8 2000 I 116.7 140.3 120.2 128.4 107.7 110.0 118.2 113.0 II r118.7 r142.4 120.0 r130.6 108.5 110.0 r120.0 113.7 III 119.7 143.5 119.9 132.4 109.2 110.7 120.1 114.2 --------------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 1998 I 4.7 7.9 3.1 6.2 5.5 1.5 -1.5 0.3 II 1.1 2.9 1.7 5.1 3.5 3.9 -4.2 0.7 III 2.1 3.7 1.5 5.1 3.6 3.0 -1.9 1.1 IV 3.9 6.8 2.8 4.8 3.2 0.9 0.2 0.6 ANNUAL 2.7 5.0 2.3 5.3 3.9 2.5 -1.7 0.8 1999 I 3.3 3.8 0.5 5.2 3.6 1.9 1.8 1.9 II 0.9 2.6 1.7 5.0 1.7 4.1 -3.5 1.2 III 4.9 6.6 1.7 5.3 2.6 0.4 0.7 0.5 IV 7.7 9.9 2.1 3.8 0.9 -3.6 9.0 1.0 ANNUAL 3.1 4.8 1.6 5.0 2.9 1.8 0.0 1.1 2000 I 1.6 5.3 3.7 3.5 r-0.6 1.9 4.8 3.0 II r6.9 r6.3 -0.6 r7.0 r3.2 r0.0 r6.2 r2.4 III 3.2 3.0 -0.2 5.8 2.7 2.5 0.5 1.7 --------------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 1998 I 3.2 5.8 2.5 4.5 3.1 1.2 0.9 1.1 II 2.5 4.7 2.1 5.5 4.0 2.9 -2.4 0.8 III 2.1 4.4 2.2 5.7 4.3 3.5 -3.3 0.8 IV 2.9 5.3 2.3 5.3 4.0 2.3 -1.9 0.7 ANNUAL 2.7 5.0 2.3 5.3 3.9 2.5 -1.7 0.8 1999 I 2.6 4.3 1.6 5.1 3.5 2.4 -1.0 1.1 II 2.5 4.2 1.6 5.0 3.0 2.4 -0.9 1.2 III 3.2 4.9 1.7 5.1 2.8 1.8 -0.2 1.0 IV 4.1 5.7 1.5 4.8 2.2 0.7 1.9 1.1 ANNUAL 3.1 4.8 1.6 5.0 2.9 1.8 0.0 1.1 2000 I 3.7 6.1 2.3 4.4 1.2 0.7 2.7 1.4 II r5.2 r7.0 1.7 r4.9 1.5 r-0.3 r5.1 r1.7 III 4.8 6.1 1.2 5.0 1.5 0.2 5.1 2.0 --------------------------------------------------------------------------------------------------------- See footnotes following Table 6. November 2, 2000 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 1998 I 109.3 127.1 116.3 116.4 102.3 106.5 117.4 110.5 II 109.8 128.1 116.7 117.9 103.2 107.5 116.3 110.7 III 110.3 129.2 117.2 119.4 104.2 108.3 115.8 111.0 IV 111.2 131.4 118.1 120.8 104.9 108.5 115.8 111.2 ANNUAL 110.2 129.0 117.1 118.6 103.8 107.7 116.3 110.8 1999 I 112.0 132.6 118.4 122.1 105.7 109.0 116.7 111.8 II 112.1 133.4 118.9 123.6 106.1 110.2 115.7 112.2 III 113.6 135.6 119.4 125.2 106.8 110.3 116.1 112.4 IV 115.8 138.9 120.0 126.5 107.2 109.3 118.6 112.7 ANNUAL 113.4 135.1 119.2 124.4 106.5 109.7 116.8 112.3 2000 I 116.3 140.7 120.9 127.8 r107.1 109.8 120.1 113.6 II r118.1 r142.9 121.0 r129.6 107.7 109.7 r121.8 r114.1 III 119.2 144.0 120.8 131.6 108.6 110.4 122.0 114.6 --------------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 1998 I 4.5 8.2 3.5 6.1 5.3 1.5 -1.4 0.4 II 1.6 3.1 1.5 5.3 3.8 3.6 -3.8 0.7 III 1.8 3.7 1.8 5.2 3.7 3.3 -1.8 1.3 IV 3.6 6.8 3.1 4.5 2.8 0.8 0.2 0.6 ANNUAL 2.6 5.1 2.4 5.1 3.7 2.4 -1.4 0.9 1999 I 2.6 3.6 1.0 4.5 2.8 1.8 2.9 2.2 II 0.6 2.4 1.8 5.0 1.7 4.3 -3.1 1.5 III 5.2 7.0 1.7 5.5 2.8 0.3 1.3 0.6 IV 8.0 10.0 1.8 4.2 1.3 -3.5 8.9 1.0 ANNUAL 2.9 4.8 1.8 4.8 2.7 1.8 0.4 1.3 2000 I 1.9 5.2 3.2 3.9 r-0.2 1.9 5.2 3.2 II r6.1 r6.5 0.4 r5.9 r2.2 r-0.2 r5.7 r2.0 III 3.8 3.0 -0.8 6.4 3.2 2.5 0.8 1.8 --------------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 1998 I 3.0 5.8 2.7 4.3 2.9 1.2 1.3 1.2 II 2.5 4.8 2.3 5.3 3.8 2.8 -2.1 0.9 III 2.1 4.6 2.4 5.7 4.2 3.5 -3.1 0.9 IV 2.9 5.4 2.5 5.3 3.9 2.3 -1.7 0.8 ANNUAL 2.6 5.1 2.4 5.1 3.7 2.4 -1.4 0.9 1999 I 2.4 4.3 1.8 4.9 3.3 2.4 -0.7 1.2 II 2.2 4.1 1.9 4.8 2.8 2.6 -0.5 1.4 III 3.0 4.9 1.9 4.8 2.6 1.8 0.3 1.2 IV 4.1 5.7 1.6 4.8 2.2 0.7 2.4 1.3 ANNUAL 2.9 4.8 1.8 4.8 2.7 1.8 0.4 1.3 2000 I 3.9 6.1 2.1 4.6 r1.4 0.7 3.0 1.6 II r5.3 r7.2 1.8 r4.9 1.5 -0.4 r5.2 r1.7 III 5.0 6.1 1.1 5.1 1.6 0.1 5.1 2.0 --------------------------------------------------------------------------------------------------------- See footnotes following Table 6. November 2, 2000 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 1998 I 121.3 r128.6 106.0 115.2 101.2 95.0 II r123.0 r129.9 105.6 116.6 102.1 r94.8 III r125.6 r131.3 104.5 118.1 103.0 r94.0 IV r127.4 r133.2 104.5 119.4 103.7 r93.7 ANNUAL r124.3 r130.7 105.2 117.3 102.6 r94.4 1999 I r129.5 r134.0 103.5 120.7 104.4 r93.2 II r131.1 r135.6 103.5 122.4 105.1 r93.4 III r132.5 r137.2 103.5 124.1 105.9 r93.7 IV r135.8 r139.6 102.8 125.5 106.4 r92.5 ANNUAL r132.2 r136.6 103.3 123.2 105.5 r93.2 2000 I r138.4 r142.0 102.6 127.0 106.5 r91.8 II r140.3 r144.6 103.1 r128.2 r106.6 r91.4 III 142.5 145.8 102.3 130.3 107.5 91.5 -------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 1998 I r5.1 r5.2 0.1 6.8 6.0 r1.6 II r5.7 r4.0 -1.6 5.0 3.4 r-0.7 III r8.7 r4.3 -4.1 5.0 3.5 r-3.4 IV r5.9 r6.0 0.1 4.6 2.9 r-1.3 ANNUAL r6.2 r5.9 -0.3 5.3 3.9 r-0.8 1999 I 6.8 2.5 -4.0 4.5 2.8 -2.2 II 4.8 4.9 0.1 5.7 2.5 0.9 III 4.5 4.6 0.1 5.9 3.2 1.4 IV 10.2 7.1 -2.8 4.6 1.7 -5.1 ANNUAL r6.3 r4.5 -1.7 5.0 2.9 r-1.3 2000 I 7.9 7.1 -0.7 4.6 r0.5 -3.0 II r5.7 r7.7 1.9 r4.0 r0.4 r-1.6 III 6.4 3.1 -3.0 6.7 3.5 0.3 -------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 1998 I r5.9 r6.9 0.9 4.4 3.0 r-1.4 II r6.3 r6.3 0.0 5.6 4.0 r-0.7 III r6.2 r5.5 -0.7 5.9 4.4 r-0.3 IV r6.4 r4.9 -1.4 5.3 4.0 r-1.0 ANNUAL r6.2 r5.9 -0.3 5.3 3.9 r-0.8 1999 I r6.8 r4.2 -2.4 4.8 3.2 r-1.9 II r6.6 r4.4 -2.0 4.9 2.9 r-1.5 III r5.5 r4.5 -0.9 5.2 2.9 r-0.3 IV 6.5 4.8 -1.7 5.2 2.5 -1.3 ANNUAL r6.3 r4.5 -1.7 5.0 2.9 r-1.3 2000 I 6.8 5.9 -0.8 5.2 2.0 -1.5 II 7.0 r6.6 -0.4 r4.8 r1.4 r-2.1 III 7.5 6.3 -1.2 5.0 1.5 -2.4 -------------------------------------------------------------------------------------------------- See footnotes following Table 6. November 2, 2000 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 1998 I 129.6 r144.6 111.5 112.6 99.0 86.9 II r132.4 r147.1 111.2 113.8 99.6 r86.0 III r136.8 r150.7 110.2 115.1 100.4 r84.1 IV r139.7 r154.5 110.5 116.6 101.3 r83.4 ANNUAL r134.6 r149.2 110.8 114.5 100.1 r85.0 1999 I r142.8 r155.6 109.0 118.1 102.2 r82.7 II r146.0 r159.1 109.0 120.1 103.1 r82.2 III r148.0 r162.5 109.8 121.9 104.0 r82.3 IV r151.6 r165.3 109.0 123.6 104.7 r81.5 ANNUAL r147.1 r160.6 109.2 120.9 103.6 r82.2 2000 I r156.2 r170.0 108.8 124.8 r104.6 r79.9 II r160.4 r176.0 109.7 r125.9 r104.6 r78.5 III 164.1 178.6 108.8 127.7 105.3 77.8 -------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 1998 I r7.1 r8.8 1.6 6.2 5.4 r-0.8 II r8.7 r7.3 -1.2 4.2 2.6 r-4.1 III r14.2 r10.1 -3.5 4.6 3.1 r-8.4 IV r8.8 r10.2 1.3 5.3 3.7 r-3.2 ANNUAL r9.0 r9.6 0.5 5.2 3.8 r-3.5 1999 I 8.9 3.1 -5.4 5.4 3.7 -3.3 II 9.4 9.3 -0.1 6.8 3.5 -2.4 III 5.6 8.7 2.9 6.2 3.5 0.6 IV 10.0 7.1 -2.7 5.7 2.8 -3.9 ANNUAL r9.3 r7.6 -1.5 5.6 3.4 r-3.4 2000 I 12.7 11.8 -0.8 3.9 r-0.3 -7.9 II r11.1 r14.9 3.4 r3.5 r-0.1 r-6.8 III 9.6 6.0 -3.3 5.9 2.8 -3.4 -------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 1998 I r8.2 r10.3 1.9 4.5 3.1 r-3.5 II r8.7 r9.5 0.8 5.5 4.0 r-2.9 III r9.5 r9.4 -0.1 5.7 4.2 r-3.5 IV r9.7 r9.1 -0.5 5.1 3.7 r-4.2 ANNUAL r9.0 r9.6 0.5 5.2 3.8 r-3.5 1999 I r10.1 r7.6 -2.2 4.9 3.3 r-4.8 II r10.3 r8.1 -2.0 5.5 3.5 r-4.3 III r8.2 r7.8 -0.4 5.9 3.6 r-2.1 IV 8.5 7.0 -1.4 6.0 3.4 -2.3 ANNUAL r9.3 r7.6 -1.5 5.6 3.4 r-3.4 2000 I 9.4 9.2 -0.2 5.7 r2.4 -3.4 II r9.8 r10.6 0.7 r4.8 r1.5 -4.6 III 10.9 9.9 -0.9 4.8 1.3 -5.5 -------------------------------------------------------------------------------------------------- See footnotes following Table 6. November 2, 2000 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 1998 I r115.4 r113.9 98.7 118.3 104.0 r102.5 II 116.0 113.9 98.2 120.1 105.1 r103.6 III r116.6 113.1 97.0 121.8 106.2 104.4 IV 117.4 r113.3 96.6 122.7 106.6 104.6 ANNUAL r116.3 113.6 97.6 120.7 105.6 r103.8 1999 I 118.5 r113.8 96.1 123.7 107.1 104.4 II r118.1 113.6 96.2 124.9 107.2 105.7 III 119.2 113.5 95.2 126.4 107.8 106.0 IV r122.2 115.5 94.5 127.2 107.8 r104.1 ANNUAL 119.5 114.1 95.5 125.5 107.5 105.0 2000 I r122.6 115.7 94.4 129.0 r108.2 105.2 II 122.4 115.4 r94.3 r130.5 r108.5 r106.6 III 123.0 115.2 93.6 133.1 109.8 108.2 -------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 1998 I r2.9 r0.7 -2.1 7.6 6.8 r4.5 II r1.9 r-0.2 -2.0 6.2 4.7 r4.2 III r2.3 r-2.6 -4.9 5.7 4.2 r3.3 IV 2.5 0.8 -1.7 3.1 1.5 0.6 ANNUAL r3.0 r1.5 -1.5 5.3 3.9 r2.3 1999 I 3.7 1.8 -1.8 3.2 1.6 -0.5 II -1.0 -0.8 0.3 3.9 0.7 r5.0 III 3.7 -0.5 -4.0 4.9 2.2 1.2 IV 10.5 7.3 -2.9 2.6 -0.2 -7.2 ANNUAL 2.7 0.5 -2.1 4.0 1.9 r1.2 2000 I 1.3 0.7 -0.6 5.9 r1.7 4.5 II r-0.7 r-1.2 r-0.4 r4.6 r1.0 r5.4 III 2.0 -0.6 -2.6 8.1 4.9 5.9 -------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 1998 I 3.5 3.1 -0.4 4.0 2.6 r0.4 II r3.7 r2.5 -1.2 5.5 4.0 r1.8 III r2.3 r0.6 -1.6 6.1 4.6 r3.7 IV r2.4 r-0.3 -2.7 5.7 4.3 r3.2 ANNUAL r3.0 r1.5 -1.5 5.3 3.9 r2.3 1999 I r2.6 r-0.1 -2.6 4.6 3.0 r1.9 II r1.9 r-0.2 -2.0 4.0 2.0 2.1 III 2.2 0.3 -1.8 3.8 1.5 1.5 IV 4.1 1.9 -2.1 3.6 1.1 -0.5 ANNUAL 2.7 0.5 -2.1 4.0 1.9 r1.2 2000 I 3.5 1.6 -1.8 4.3 r1.1 r0.8 II 3.6 1.5 -2.0 r4.5 r1.2 r0.9 III 3.2 1.5 -1.6 5.3 1.8 2.0 -------------------------------------------------------------------------------------------------- See footnotes following Table 6. November 2, 2000 r=revised Source: Bureau of Labor Statistics Table 6. Nonfinancial corporations: 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 1998 I 112.3 132.4 117.9 115.2 101.2 102.6 100.5 102.0 150.4 106.1 II 113.4 134.2 118.3 116.6 102.1 102.8 100.9 102.3 147.2 106.1 III 114.9 136.6 118.9 118.0 103.0 102.7 100.2 102.1 151.4 106.2 IV 115.8 138.6 119.6 119.3 103.7 103.0 101.6 102.6 144.5 106.2 ANNUAL 114.2 135.5 118.6 117.4 102.7 102.8 100.8 102.2 148.3 106.1 1999 I 117.1 140.6 120.0 120.9 104.6 103.2 100.7 102.5 149.7 106.5 II 118.2 142.5 120.5 122.4 105.1 103.5 101.4 103.0 147.5 106.7 III 119.7 145.0 121.1 124.0 105.8 103.6 102.1 103.2 143.3 106.6 IV 121.5 148.1 122.0 125.3 106.1 103.1 102.5 103.0 145.7 106.6 ANNUAL 119.2 144.0 120.9 123.2 105.5 103.4 101.7 102.9 146.5 106.6 2000 I 122.3 150.4 122.9 126.1 105.8 103.1 103.3 103.1 150.9 107.2 II r124.0 r152.7 123.2 r128.0 r106.4 r103.3 r104.0 103.4 r155.0 107.8 ---------------------------------------------------------------------------------------------------------- Percent change from previous quarter at annual rate(5) 1998 I 2.6 6.1 3.4 5.4 4.6 2.7 0.3 2.1 -14.7 -0.1 II 4.0 5.6 1.6 5.0 3.4 1.0 1.6 1.1 -8.3 0.0 III 5.2 7.4 2.0 5.0 3.5 -0.2 -2.5 -0.8 11.9 0.6 IV 3.4 5.9 2.5 4.4 2.8 1.0 5.5 2.2 -17.0 -0.3 ANNUAL 3.6 6.5 2.8 4.8 3.4 1.2 0.0 0.8 -5.3 0.1 1999 I 4.4 5.7 1.3 5.3 3.6 0.9 -3.5 -0.3 15.1 1.4 II 3.8 5.5 1.7 5.0 1.8 1.2 3.0 1.7 -5.6 0.8 III 5.1 7.2 2.0 5.4 2.7 0.3 2.6 0.9 -11.1 -0.6 IV 6.1 9.0 2.8 4.1 1.2 -1.8 1.9 -0.9 7.1 0.0 ANNUAL 4.3 6.3 1.9 4.9 2.8 0.6 0.9 0.7 -1.2 0.4 2000 I 2.9 6.2 3.2 2.7 r-1.4 -0.2 3.0 0.7 14.9 2.3 II r5.4 r6.4 0.9 r6.1 r2.3 0.6 r2.6 r1.2 r11.3 r2.3 ---------------------------------------------------------------------------------------------------------- Percent change from corresponding quarter of previous year 1998 I 3.2 6.8 3.5 4.0 2.6 0.8 -0.1 0.5 -2.7 0.1 II 3.8 6.7 2.8 5.0 3.5 1.1 -0.5 0.7 -5.2 0.0 III 3.6 6.4 2.7 5.3 3.8 1.6 -0.6 1.0 -5.6 0.1 IV 3.8 6.2 2.4 4.9 3.6 1.1 1.2 1.1 -7.7 0.0 ANNUAL 3.6 6.5 2.8 4.8 3.4 1.2 0.0 0.8 -5.3 0.1 1999 I 4.2 6.1 1.8 4.9 3.3 0.7 0.2 0.5 -0.5 0.4 II 4.2 6.1 1.9 4.9 2.9 0.7 0.5 0.7 0.2 0.6 III 4.2 6.1 1.9 5.0 2.7 0.8 1.8 1.1 -5.4 0.3 IV 4.8 6.9 1.9 5.0 2.4 0.1 0.9 0.3 0.9 0.4 ANNUAL 4.3 6.3 1.9 4.9 2.8 0.6 0.9 0.7 -1.2 0.4 2000 I 4.5 7.0 2.4 4.3 r1.1 -0.1 2.6 0.6 0.8 0.6 II r4.9 r7.2 2.2 r4.6 1.2 -0.3 r2.5 r0.5 r5.1 1.0 ---------------------------------------------------------------------------------------------------------- See footnotes following Table 6. November 2, 2000 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 -1.7 and +2.3 index points approximately 95 percent of the time. This interval is based on the performance of this measure between the fourth quarter of 1995 and the second quarter of 2000. 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 1978-1999 is based on the Consumer Price Index research series (CPI-U-RS). (3) Unit nonlabor payments include profits, capital consumption allowances, interest, rental income of persons, and indirect taxes. (4) Current dollar output divided by the output index. (5) Quarterly changes: Percent change compounded at annual rate from the original data rather than index numbers. Annual changes: Percent change between annual average levels. (6) Unit nonlabor costs include capital consumption allowances, interest, rental income of persons, and indirect taxes. For nonfinancial corporations, rental income of persons is zero by definition. (7) Total unit costs are the sum of unit labor and nonlabor costs. (8) Unit profits include corporate profits with inventory valuation and capital consumption adjustments. Appendix table 1. Manufacturing sector: Productivity, hourly compensation, and unit labor costs, Indexes 1992=100 Real Output per Hours Compensa- compensa- Unit hour of of all tion per tion per labor Year all persons Output persons hour (1) hour (2) costs ----------------------------------------------------------------------------------------------- 1949 33.5 26.5 79.1 8.3 45.1 24.7 1950 34.0 29.1 85.5 8.7 46.8 25.5 1951 33.8 31.1 92.1 9.5 47.7 28.3 1952 35.2 32.9 93.3 10.2 49.9 28.9 1953 36.3 35.6 98.1 10.7 52.3 29.5 1954 37.3 33.4 89.6 11.2 54.2 30.1 1955 38.8 36.7 94.6 11.7 56.6 30.1 1956 38.6 37.1 96.0 12.4 59.3 32.1 1957 39.4 37.2 94.5 13.2 60.8 33.4 1958 40.0 34.7 86.6 13.8 61.9 34.4 1959 40.9 37.8 92.5 14.3 63.7 34.9 1960 41.8 38.5 92.1 14.9 65.2 35.6 1961 42.8 38.4 89.7 15.3 66.5 35.8 1962 44.2 41.2 93.4 15.9 68.3 36.0 1963 45.7 43.1 94.4 16.4 69.5 35.8 1964 47.4 45.7 96.4 17.0 71.5 36.0 1965 48.5 49.5 102.0 17.4 71.8 35.9 1966 49.1 53.3 108.6 18.2 73.0 37.1 1967 50.9 54.9 108.0 19.2 74.7 37.7 1968 52.7 57.7 109.6 20.7 77.2 39.2 1969 53.5 59.4 110.9 22.2 78.5 41.4 1970 54.2 56.5 104.4 23.7 79.5 43.8 1971 57.8 58.1 100.5 25.2 80.8 43.5 1972 60.3 63.3 105.1 26.5 82.3 43.9 1973 61.4 67.8 110.4 28.5 83.4 46.4 1974 61.2 66.1 107.9 31.6 83.4 51.7 1975 64.3 62.5 97.2 35.5 85.6 55.2 1976 67.0 68.2 101.9 38.4 87.8 57.4 1977 69.7 73.9 106.1 41.8 89.6 60.0 1978 70.4 77.8 110.6 45.2 90.6 64.2 1979 69.8 78.7 112.7 49.6 90.9 71.1 1980 70.1 75.3 107.5 55.6 91.7 79.3 1981 70.7 75.6 107.0 61.1 92.1 86.3 1982 74.2 72.7 97.9 67.0 95.4 90.2 1983 76.7 75.9 98.9 68.8 94.2 89.7 1984 79.4 83.7 105.3 71.2 93.6 89.6 1985 82.3 86.0 104.6 75.1 95.6 91.3 1986 85.9 88.5 103.0 78.5 98.1 91.4 1987 88.3 91.6 103.8 80.7 97.5 91.4 1988 90.2 96.1 106.6 84.0 97.9 93.1 1989 90.3 96.6 107.1 86.6 96.8 96.0 1990 92.8 97.3 104.8 90.8 96.6 97.8 1991 95.0 95.4 100.4 95.6 98.1 100.6 1992 100.0 100.0 100.0 100.0 100.0 100.0 1993 101.9 103.3 101.4 102.7 100.2 100.8 1994 105.0 108.7 103.6 105.6 100.8 100.7 1995 109.0 113.4 104.0 107.9 100.4 99.0 1996 112.8 116.9 103.7 109.3 99.0 96.9 1997 117.1 123.5 105.5 111.4 98.8 95.1 1998 124.3 130.7 105.2 117.3 102.6 94.4 1999 132.2 136.6 103.3 123.2 105.5 93.2 ----------------------------------------------------------------------------------------------- See footnotes following Table 6. November 2, 2000 Source: Bureau of Labor Statistics Appendix table 2. Durable manufacturing sector: Productivity, hourly compensation, and unit labor costs, Indexes 1992=100 Real Output per Hours Compensa- compensa- Unit hour of of all tion per tion per labor Year all persons Output persons hour (1) hour (2) costs ----------------------------------------------------------------------------------------------- 1949 31.5 22.7 72.0 8.1 44.1 25.6 1950 33.3 26.7 80.3 8.5 45.9 25.6 1951 32.0 29.0 90.6 9.4 47.1 29.4 1952 33.9 31.5 92.9 10.1 49.7 29.9 1953 35.8 35.8 99.9 10.7 52.0 29.8 1954 35.8 31.7 88.4 11.2 54.0 31.2 1955 37.4 35.3 94.4 11.7 56.6 31.2 1956 35.8 34.6 96.6 12.4 59.3 34.7 1957 36.3 34.6 95.4 13.2 60.8 36.3 1958 36.0 30.3 84.2 13.9 62.5 38.6 1959 37.3 34.1 91.4 14.4 64.3 38.6 1960 37.7 34.4 91.3 15.0 65.7 39.7 1961 38.3 33.6 87.8 15.4 66.9 40.2 1962 40.2 37.2 92.7 16.0 68.9 39.9 1963 41.9 39.6 94.3 16.5 69.9 39.3 1964 43.4 42.1 97.0 17.1 71.8 39.5 1965 45.6 47.5 104.1 17.4 72.0 38.3 1966 46.3 52.4 113.1 18.2 73.0 39.3 1967 47.2 53.1 112.3 19.2 74.5 40.5 1968 49.4 56.3 113.9 20.6 77.1 41.8 1969 50.1 58.0 115.6 22.1 78.4 44.1 1970 49.8 53.1 106.5 23.8 79.6 47.7 1971 54.0 54.6 101.1 25.4 81.4 46.9 1972 56.6 60.5 107.0 26.6 82.8 47.1 1973 58.9 67.8 115.2 28.6 83.6 48.5 1974 57.2 64.8 113.3 31.6 83.3 55.3 1975 59.1 59.0 99.7 35.7 86.2 60.4 1976 62.5 65.2 104.3 38.8 88.6 62.0 1977 65.7 72.3 110.0 42.1 90.3 64.1 1978 66.6 77.7 116.5 45.3 90.8 67.9 1979 66.7 80.2 120.1 49.7 91.1 74.4 1980 66.7 75.4 113.1 55.9 92.2 83.8 1981 67.5 75.8 112.3 61.5 92.8 91.2 1982 70.1 70.5 100.6 67.5 96.2 96.3 1983 74.0 74.8 101.2 69.1 94.5 93.4 1984 78.5 86.5 110.2 71.0 93.4 90.5 1985 80.5 88.7 110.2 74.8 95.1 92.8 1986 84.7 90.9 107.3 78.5 98.1 92.6 1987 87.8 94.0 107.1 80.9 97.7 92.1 1988 90.0 99.8 110.8 83.7 97.6 93.0 1989 90.1 99.9 110.9 86.3 96.4 95.7 1990 92.5 99.3 107.3 90.3 96.1 97.7 1991 93.9 95.1 101.3 95.3 97.8 101.4 1992 100.0 100.0 100.0 100.0 100.0 100.0 1993 103.3 104.9 101.5 102.9 100.3 99.6 1994 108.0 113.0 104.7 105.6 100.8 97.8 1995 113.1 120.2 106.2 107.5 100.1 95.1 1996 118.1 126.6 107.2 107.3 97.2 90.9 1997 123.5 136.2 110.3 108.9 96.5 88.1 1998 134.6 149.2 110.8 114.5 100.1 85.0 1999 147.1 160.6 109.2 120.9 103.6 82.2 ----------------------------------------------------------------------------------------------- See footnotes following Table 6. November 2, 2000 Source: Bureau of Labor Statistics Appendix table 3. Nondurable manufacturing sector: Productivity, hourly compensation, and unit labor costs, Indexes 1992=100 Real Output per Hours Compensa- compensa- Unit hour of of all tion per tion per labor Year all persons Output persons hour (1) hour (2) costs ----------------------------------------------------------------------------------------------- 1949 34.9 30.9 88.5 8.6 47.1 24.7 1950 35.2 32.5 92.5 9.0 48.6 25.6 1951 36.2 34.0 94.0 9.8 48.8 27.0 1952 37.2 35.0 93.9 10.3 50.4 27.6 1953 37.8 36.2 95.6 10.8 52.5 28.5 1954 39.4 36.0 91.3 11.3 54.8 28.8 1955 41.0 38.9 94.8 11.7 56.5 28.4 1956 42.6 40.6 95.1 12.4 59.2 29.1 1957 43.8 40.8 93.2 13.1 60.7 30.0 1958 45.1 40.5 89.8 13.6 61.3 30.2 1959 46.2 43.4 93.9 14.1 63.0 30.5 1960 47.5 44.3 93.2 14.7 64.7 31.0 1961 48.8 45.0 92.3 15.2 66.1 31.2 1962 49.8 47.0 94.4 15.7 67.6 31.5 1963 51.5 48.6 94.4 16.2 68.8 31.5 1964 53.7 51.3 95.5 16.9 70.8 31.5 1965 53.7 53.2 99.1 17.3 71.3 32.2 1966 54.2 55.6 102.7 18.0 72.3 33.3 1967 57.0 58.3 102.3 19.1 74.3 33.5 1968 58.6 60.8 103.8 20.5 76.5 35.0 1969 60.0 62.8 104.6 22.0 77.9 36.6 1970 61.7 62.6 101.5 23.6 79.0 38.2 1971 64.6 64.5 99.8 24.9 79.7 38.5 1972 67.6 69.3 102.5 26.1 81.0 38.5 1973 67.9 70.6 104.0 28.1 82.3 41.4 1974 69.8 70.4 100.9 31.3 82.6 44.9 1975 72.4 68.0 93.9 34.9 84.2 48.1 1976 74.2 73.2 98.7 37.7 86.0 50.7 1977 76.9 77.6 100.9 40.9 87.7 53.2 1978 77.8 79.8 102.6 44.4 89.1 57.1 1979 76.7 78.9 102.8 48.7 89.2 63.5 1980 76.5 76.6 100.1 54.3 89.5 70.9 1981 76.9 76.8 99.9 59.5 89.8 77.4 1982 80.3 75.8 94.4 65.6 93.4 81.6 1983 81.4 78.1 95.9 68.0 93.1 83.6 1984 82.9 81.9 98.8 70.7 92.9 85.2 1985 86.5 84.0 97.1 74.7 95.0 86.3 1986 89.1 86.7 97.3 77.7 97.1 87.2 1987 90.8 90.3 99.4 79.8 96.5 87.9 1988 92.2 93.0 100.9 83.7 97.6 90.7 1989 91.8 93.5 101.9 86.5 96.7 94.3 1990 94.0 95.4 101.4 91.0 96.9 96.8 1991 96.0 95.3 99.3 95.8 98.4 99.9 1992 100.0 100.0 100.0 100.0 100.0 100.0 1993 100.6 101.8 101.2 102.5 99.9 101.9 1994 102.5 104.7 102.1 105.4 100.5 102.8 1995 105.6 106.7 101.1 107.9 100.4 102.3 1996 108.6 107.6 99.0 111.8 101.2 102.9 1997 113.0 111.9 99.1 114.6 101.6 101.5 1998 116.3 113.6 97.6 120.7 105.6 103.8 1999 119.5 114.1 95.5 125.5 107.5 105.0 ----------------------------------------------------------------------------------------------- See footnotes following Table 6. November 2, 2000 Source: Bureau of Labor Statistics 1