The following is the unedited transcript of the news release from the Bureau of Labor Statistics of the U.S. Department of Labor.


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 second quarter of 2008. The seasonally adjusted annual rates of productivity change in the second quarter were:

4.3 percent in the business sector and
4.3 percent in the nonfarm business sector.

In both sectors, the second-quarter productivity gains were larger than the preliminary estimates reported on August 8.

In manufacturing, the revised productivity changes in the second quarter were:

-2.2 percent in manufacturing,
-4.5 percent in durable goods manufacturing, and
0.2 percent in nondurable goods manufacturing.

Manufacturing productivity decreased faster in the second quarter of 2008 than was reported on August 8, reflecting downward revisions to output per hour in both durable and nondurable manufacturing. Output and hours in manufacturing, which includes about 12 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.

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.

Business

Labor productivity in the business sector grew 4.3 percent from the first quarter to the second quarter of 2008, as output increased 3.2 percent and hours worked by all persons engaged in the sector--employees, proprietors, and unpaid family workers--fell 1.0 percent (seasonally adjusted annual rates). Output per hour increased 3.2 percent over the past four quarters, reflecting a 2.2 percent increase in output and a 1.0 percent decrease in hours. The four-quarter decline in hours was the largest since a 1.3 percent decline for the period ending with the second quarter of 2003.

Hourly compensation in the business sector grew at a 4.0 percent annual rate in the second quarter of 2008. 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, declined 1.0 percent in the second quarter of 2008 after falling 0.6 percent in the first quarter of the year.

Unit labor costs, which reflect changes in hourly compensation and productivity, decreased 0.4 percent in the second quarter of 2008. From the second quarter of 2007 to the second quarter of 2008 these costs increased 0.7 percent. The implicit price deflator for business output, which exhibits changes in unit labor costs and unit nonlabor payments, rose 0.9 percent in the second quarter of 2008.

Nonfarm business

Productivity in the nonfarm business sector grew at a 4.3 percent annual rate in the second quarter of 2008, reflecting an increase of 3.4 percent in output and a decrease of 0.8 percent in hours of all persons. From the second quarter of 2007 to the second quarter of 2008, nonfarm business productivity grew 3.4 percent, faster than the 2.5 percent average rate from 2000 to 2007. Hours decreased 1.1 percent over the past four quarters--the largest four-quarter decline since a 2.1 percent decline for the period ending in the third quarter of 2002.

Hourly compensation increased 3.7 percent in the second quarter of 2008, but when the 5.0 percent increase in consumer prices was taken into account, real hourly compensation declined 1.3 percent.

Unit labor costs declined 0.5 percent in the second quarter of 2008, but rose 0.6 percent over the last four quarters. The implicit price deflator for nonfarm business output rose 0.9 percent in the second quarter.

Manufacturing

Productivity decreased 2.2 percent in manufacturing in the second quarter of 2008, as output fell 3.7 percent and hours of all persons fell 1.5 percent (seasonally adjusted annual rates). This was the largest quarterly decline in manufacturing productivity since a 2.5 percent decrease in the second quarter of 1989; it was concentrated in the durable goods sector, where productivity declined 4.5 percent. In nondurable goods, productivity edged up 0.2 percent as output and hours fell 1.3 percent and 1.6 percent, respectively.

The hourly compensation of all manufacturing workers increased 3.9 percent during the second quarter of 2008, reflecting increases in hourly compensation of 4.1 percent in durable goods industries and 3.3 percent in the nondurable goods sector. Real hourly compensation in the total manufacturing sector fell 1.1 percent in the second quarter after consumer prices were taken into account.