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[Productivity Grew at Fastest Rate Since 1983 - AP 3dec03]
USDL 03-815 TRANSMISSION OF THIS MATERIAL IS EMBARGOED UNTIL 8:30 A.M. EST, WEDNESDAY, DECEMBER 3, 2003.
Internet address: http://www.bls.gov/lpc/ Historical, technical information: (202) 691-5606 Current data: (202) 691-5200 Media contact: (202) 691-5902
PRODUCTIVITY AND COSTS Third Quarter 2003
The Bureau of Labor Statistics of the U.S. Department of Labor today reported revised productivity data--as measured by output per hour of all persons--for the third quarter of 2003. The seasonally adjusted annual rates of productivity growth in the third quarter were:
8.6 percent in the business sector, and 9.4 percent in the nonfarm business sector.
In both sectors, upward revisions to productivity reflect much larger upward revisions to output than to hours.
In manufacturing, revised productivity increases in the third quarter were:
9.0 percent in manufacturing, 14.8 percent in durable goods manufacturing, and 3.1 percent in nondurable goods manufacturing.
Productivity in the manufacturing sector also rose more rapidly than was reported on Nov. 6. Output and hours both were revised up but the revisions to output were larger than those to hours in the sector. Output and hours in manufacturing, which includes about 15 percent of U.S. business sector employment, tend to vary more from quarter to quarter than data for the aggregate business and nonfarm business sectors. Third-quarter measures are summarized in table A and appear in detail in tables 1 through 5.
The data sources and methods used in the preparation of the manufacturing series differ from those used in preparing the business and nonfarm business series, and these measures are not directly comparable. Output measures for business and nonfarm business are based on measures of gross domestic product prepared by the Bureau of Economic Analysis of the U.S. Department of Commerce. Quarterly output measures for manufacturing reflect indexes of industrial production independently prepared by the Board of Governors of the Federal Reserve System. See Technical Notes for further information on data sources.
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Revised historical measures through 2002 will be available on the BLS web
site on Jan. 7, 2004, reflecting the release of revised source data. For
more information see "Upcoming changes."
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Table A. Productivity and costs: Revised third-quarter 2003 measures
(Seasonally adjusted annual rates)
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Real
Hourly hourly Unit
Produc- compen- compen- labor
Sector tivity Output Hours sation sation costs
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Percent change from preceding quarter
Business 8.6 10.2 1.4 2.3 0.0 -5.8
Nonfarm business 9.4 10.3 0.8 3.0 0.7 -5.8
Manufacturing 9.0 3.5 -5.0 4.1 1.7 -4.5
Durable 14.8 8.1 -5.9 3.5 1.1 -9.9
Nondurable 3.1 -0.8 -3.8 5.3 2.9 2.1
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Percent change from same quarter a year ago
Business 5.0 4.4 -0.6 2.8 0.6 -2.1
Nonfarm business 5.0 4.4 -0.5 2.7 0.5 -2.2
Manufacturing 4.4 -0.4 -4.7 4.4 2.2 0.0
Durable 6.9 1.4 -5.1 4.0 1.8 -2.7
Nondurable 1.8 -2.3 -4.0 5.2 2.9 3.4
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Business
From the second quarter to the third quarter of 2003, business sector productivity rose at an annual rate of 8.6 percent, as output increased 10.2 percent and hours of all persons engaged in the sector rose 1.4 percent (table 1). This is only the second increase in hours since they began falling in the second quarter of 2000. The output increase was the largest since an 11.2-percent rise in the first quarter of 1984.
Hourly compensation rose 2.3 percent during the third quarter of 2003, less than the 4.1-percent increase in the second quarter. Hourly compensation includes wages and salaries, supplements, employer contributions to employee benefit plans, and taxes. Real hourly compensation, which takes into account changes in consumer prices, was unchanged in the third quarter of 2003.
Unit labor costs decreased 5.8 percent last quarter, a bigger drop than the 3.1-percent decline in the previous quarter. Unit labor costs last rose in the first quarter of the year, when they increased 0.5 percent. The implicit price deflator for the business sector, which reflects changes both in unit labor costs and in unit nonlabor payments, increased at a 1.7 percent annual rate in the third quarter of 2003.
Nonfarm business
Output per hour of all persons in the nonfarm business sector increased 9.4 percent during the third quarter of 2003 (table 2). Output rose 10.3 percent while hours of all persons increased 0.8 percent. The output increase was the largest since the third quarter of 1983, when it rose 11.5 percent. In the nonfarm business sector, hours last increased in the first quarter of 2000, when they rose 1.6 percent.
Hourly compensation grew 3.0 percent in the third quarter of 2003, down somewhat from the 3.6-percent increase in the previous quarter. When the rise in consumer prices is taken into account, real hourly compensation rose 0.7 percent in the third quarter of 2003.
Unit labor costs fell 5.8 percent in the third quarter, following a 3.2 percent decrease one quarter earlier. The implicit price deflator for nonfarm business rose 1.5 percent in the third quarter of 2003.
Manufacturing
Productivity increased 9.0 percent in manufacturing in the third quarter of 2003, as output increased 3.5 percent and hours of all persons dropped 5.0 percent (seasonally adjusted annual rates). Hours of all persons in manufacturing have fallen for thirteen consecutive quarters. In durable goods industries, productivity rose by 14.8 percent, reflecting an 8.1- percent rise in output and a decline of 5.9 percent in hours. Productivity grew much more slowly in the nondurable goods industries, 3.1 percent, as output fell 0.8 percent and hours fell more, 3.8 percent (tables 3, 4, and 5).
The hourly compensation of all manufacturing workers rose 4.1 percent during the third quarter of 2003. In durable goods manufacturing, hourly compensation increased 3.5 percent and in nondurable goods manufacturing it grew 5.3 percent. When the increase in consumer prices is taken into account, real hourly compensation for all manufacturing workers rose 1.7 percent in the third quarter.
Unit labor costs in manufacturing fell 4.5 percent in the third quarter after rising 2.2 percent in the previous quarter. Unit labor costs dropped 9.9 percent in durable goods manufacturing in the third quarter and they rose 2.1 percent in nondurable goods manufacturing.
Nonfinancial Corporations
Third-quarter 2003 measures of productivity and costs also were released for nonfinancial corporations (tables B and 6). Output per all-employee hour grew at a 9.2 percent annual rate, somewhat faster than the 8.4 percent increase in the previous quarter. Output increased 8.9 percent in the third quarter, and hours of all employees fell 0.2 percent (seasonally adjusted annual rates). The third quarter increase in output was the largest since a 9.5-percent rise in the first quarter of 2000 while the decrease in employee hours was the smallest since the third quarter of 2000, when they fell 0.1 percent. Employee hours have fallen in fourteen consecutive quarters. The nonfinancial corporate sector includes all corporations doing business in the United States, except those classified as depository institutions, nondepository institutions, security and commodity brokers, insurance carriers, regulated investment offices, small business investment offices, and real estate investment trusts.
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Table B. Nonfinancial corporations: Third-quarter 2003 productivity and
cost measures
(Seasonally adjusted annual rates)
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Real
Hourly hourly Unit Implicit
Produc- compen- compen- labor Unit price
Period tivity Output Hours sation sation costs profits deflator
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Percent change from preceding quarter
2003 III 9.2 8.9 -0.2 3.0 0.7 -5.6 60.9 0.6
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Percent change from same quarter a year ago
2003 III 6.2 4.9 -1.2 3.3 1.1 -2.7 36.4 0.4
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Hourly compensation in nonfinancial corporations increased 3.0 percent in the third quarter, down from the second quarter increase of 3.7 percent. When the rise in consumer prices is taken into account, real hourly compensation increased 0.7 percent in the third quarter.
Unit labor costs for the sector dropped 5.6 percent in third quarter 2003. Unit nonlabor costs also fell, 2.4 percent, while unit profits rose at a 60.9 percent annual rate in the third quarter. As a result of these movements, the implicit price deflator for the output of nonfinancial corporations--which reflects a weighted average of these three measures-- increased 0.6 percent.
Revised Measures
Current and previous measures for the third quarter of 2003 for the business, nonfarm business, and manufacturing sectors are compared in table C. In the business and nonfarm business sectors, increases in productivity and output are larger than those reported on Nov. 6, based on the information available at that time. Unit labor cost measures for these sectors showed correspondingly larger declines. Similarly, in manufacturing rates of growth in output and productivity were revised up in the third quarter and unit labor costs show a larger decline than was reported last month.
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Table C. Previous and revised productivity and related measures
Quarterly percent change at seasonally adjusted annual rate
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Real
Hourly hourly Unit
Produc- compen- compen- labor
Sector tivity Output Hours sation sation costs
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Third quarter 2003
Business:
Previous 7.4 8.8 1.3 2.4 0.1 -4.6
Current 8.6 10.2 1.4 2.3 0.0 -5.8
Nonfarm business:
Previous 8.1 8.8 0.7 3.1 0.8 -4.6
Current 9.4 10.3 0.8 3.0 0.7 -5.8
Manufacturing:
Previous 8.6 2.9 -5.2 4.3 1.9 -4.0
Current 9.0 3.5 -5.0 4.1 1.7 -4.5
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Third quarter 2003
Business: Previous 7.4 8.8 1.3 2.4 0.1 -4.6 Current 8.6 10.2 1.4 2.3 0.0 -5.8
Nonfarm business: Previous 8.1 8.8 0.7 3.1 0.8 -4.6 Current 9.4 10.3 0.8 3.0 0.7 -5.8
Manufacturing: Previous 8.6 2.9 -5.2 4.3 1.9 -4.0 Current 9.0 3.5 -5.0 4.1 1.7 -4.5 -----------------------------------------------------------------------------
In addition, quarterly measures of productivity, output, and unit labor costs for manufacturing were revised back to first quarter 2001 due to the incorporation of revised indexes of industrial production. The annual measures for 2001 and 2002 also were affected. In both years, output shows less of a decline than it had previously. Productivity was revised up by a corresponding amount in both years. The same revisions affected unit labor costs; they fall more in 2002 and increase less in 2001 than previously published. The output measures for more recent quarters, based on those published by the Board of Governors of the Federal Reserve System, were changed to incorporate additional and revised source data and updated information on seasonal trends. (See Federal Reserve statistical release G.17 (419), "Industrial Production and Capacity Utilization: the 2003 Annual Revision," Nov. 10, 2003.)
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Table D. Manufacturing industries: Previous and revised productivity
and related measures
Annual percent changes
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Real
Hourly hourly Unit
Produc- compen- compen- labor
Sector tivity Output Hours sation sation costs
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Annual average 2002
Previous 6.1 -1.1 -6.8 4.7 3.1 -1.3
Current 6.5 -0.7 -6.8 4.7 3.1 -1.7
Annual average 2001
Previous 1.6 -4.9 -6.4 2.4 -0.4 0.8
Current 1.8 -4.7 -6.4 2.4 -0.4 0.6
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Although the Federal Reserve revised and reclassified its indexes of industrial production (IIP) back to 1972 when they released their historical revisions in December 2002, the Bureau of Labor Statistics has not yet incorporated these changes into its historical quarterly measures for years before 2001. When revised historical productivity data are released on Jan. 7, 2004, the updated information from the IIP will be incorporated into the quarterly measures.
NEXT RELEASE DATE
The next release of Productivity and Costs is scheduled for 8:30 AM EST, Thursday, February 5, 2004. Preliminary fourth-quarter and annual 2003 measures will be released at that time.
Scheduled release dates for productivity and costs measures for major sectors of the U.S. economy in 2004 are:
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Reference period 2004 release date
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2003:
Fourth quarter, Annual February 5
Fourth quarter, Annual March 4
(revised)
2004:
First quarter May 6
First quarter (revised) June 3
Second quarter August 10
Second quarter (revised) September 2
Third quarter November 4
Third quarter (revised) December 7
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These dates are based on presently available schedules for the release of underlying source data in 2004. Each issue of Productivity and Costs contains a "Next release date" paragraph that readers should use to confirm the dates above.
Upcoming changes
In order to provide users with information on long-term productivity and cost trends reflecting the release of the revised national income and product accounts by the Bureau of Economic Analysis, U.S. Department of Commerce, on Dec. 10, 2003, revised historical measures of productivity and costs for all sectors will be prepared by the BLS. Revised data for the manufacturing and nonfinancial corporate sectors also will reflect conversion from the 1987 Standard Industrial Classification to the 2002 North American Industry Classification System. On Jan. 7, 2004, the BLS will post revised historical measures through the fourth quarter of 2002 on its web site http://www.bls.gov/lpc/, but will not incorporate these data into the LABSTAT database at that time. In keeping with usual practices, revised data for the second and third quarters of 2003 will be reported in the "Productivity and Costs" release of Feb. 5, 2004, which also will include revised first-quarter 2003 data. All revised historical data will be incorporated into the LABSTAT database at the time of that release.
Technical note
Table 1. Business sector: Productivity, hourly compensation, unit labor
costs, and prices, seasonally adjusted
Table 2. Nonfarm business sector: Productivity, hourly compensation, unit labor
costs, and prices, seasonally adjusted
Table 3. Manufacturing sector: Productivity, hourly compensation, and unit labor
costs, seasonally adjusted
Table 4. Durable manufacturing sector: Productivity, hourly compensation, and
unit labor costs, seasonally adjusted
Table 5. Nondurable manufacturing sector: Productivity, hourly compensation, and
unit labor costs, seasonally adjusted
Table 6. Nonfinancial corporations: Productivity, hourly compensation, unit
labor costs, unit profits, and prices, seasonally adjusted
Sources and footnotes for tables
Text version of entire news release
Table of Contents
Last Modified Date: December 03, 2003
Text version of entire news release Table of Contents Last Modified Date: December 03, 2003
source: http://www.bls.gov/news.release/prod2.nr0.htm 3dec03
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