Productivity and Costs, Third Quarter, 2000
USDL 00-319
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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.
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Table A. Productivity and costs: Preliminary third-quarter 2000 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 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
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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
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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.
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Table B. 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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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
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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).
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Table C. Nonfinancial corporations: Previous and revised productivity and
cost measures
Quarterly percent changes at seasonally adjusted annual rates
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Real
Hourly hourly Unit Implicit
Produc- compen- compen- labor Unit price
tivity Output Hours sation sation costs profits deflator
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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
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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 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
- Appendix table
1. Manufacturing sector: Productivity, hourly compensation, and unit labor
costs, indexes 1992=100
- Appendix table
2. Durable manufacturing sector: Productivity, hourly compensation, and unit
labor costs, indexes 1992=100
- Appendix table
3. Nondurable manufacturing sector: Productivity, hourly compensation, and
unit labor costs, indexes 1992=100
- Text version of
entire news release
Bureau of Labor Statistics
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Last modified:
Thursday, November 02, 2000
URL: /news.release/prod2.nr0.htm
Table of Contents 
Quarterly Labor Productivity