Unit labor costs in the third quarter

Unit labor costs in nonfarm business fell at a seasonally adjusted annual rate of 0.2 percent in the third quarter of 1999. In the previous quarter, unit labor costs rose at an annual rate of 4.2 percent.

[Chart data—TXT]

In manufacturing, unit labor costs rose 2.3 percent in the third quarter of 1999. Unit labor costs in manufacturing increased by 0.3 percent in the second quarter. Note that, although the change in unit labor costs in manufacturing was greater than in nonfarm business in the third quarter, in 9 of the 10 previous quarters the reverse was true.

Unit labor costs—the cost of the labor input required to produce one unit of output—are computed by dividing labor costs in nominal terms by real output. Labor costs account for approximately 63 percent of all nonfarm business expenses.

These data are a product of the BLS Quarterly Labor Productivityprogram. Data are subject to revision. Additional information is available in "Productivity and Costs, Third Quarter, 1999," news release USDL 99-347. Unit labor costs also can be expressed as the ratio of hourly compensation to labor productivity.