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 fourth-quarter seasonally-adjusted annual rates of productivity change--as measured by output per hour of all persons--and revised changes for calendar year 2008. Percent changes in business and nonfarm business productivity were:

Fourth Annual averages
quarter 2007-2008

Business sector -0.4 2.7
Nonfarm Business sector -0.4 2.8


Productivity growth for the fourth quarter of 2008 was revised down by 3.5 percentage points in the business sector and 3.6 percentage points in the nonfarm business sector from the estimates published February 5. In both sectors output was revised down by 3.2 percentage points and hours were revised up by 0.1 percentage point. Productivity growth during calendar year 2008 was not revised in either sector.

In the manufacturing sector, percent changes in productivity were:

Fourth Annual averages
quarter 2007-2008

Manufacturing sector -4.0 1.5
Durable goods manufacturing -14.8 1.6
Nondurable goods manufacturing 7.6 1.0

Business

Productivity in the business sector decreased 0.4 percent in the fourth quarter of 2008, as output decreased 8.4 percent and hours of all persons decreased 8.0 percent (seasonally adjusted annual rates). The decline in output was the largest since the first quarter of 1982 (-8.6 percent) and the decline in hours was the largest since the first quarter of 1975 (-12.1 percent). When the fourth quarter of 2008 is compared to the fourth quarter of 2007 output per hour increased 2.2 percent.

Hourly compensation grew at a 5.0 percent annual rate in the fourth quarter. This measure includes wages and salaries, supplements, employer contributions to employee-benefit plans, and taxes. Real hourly compensation increased 15.6 percent in the fourth quarter. This measure takes into account changes in consumer prices, which fell at a 9.2 percent annual rate in the fourth quarter.

Unit labor costs, which reflect changes in hourly compensation and productivity, increased 5.4 percent during the fourth quarter, after rising 3.3 percent in the third quarter. The implicit price deflator for business sector output edged down 0.1 percent in the fourth quarter of 2008, but increased 1.7 percent from the same quarter a year ago.

Nonfarm Business

In the nonfarm business sector, productivity decreased at an annual rate of 0.4 percent in the fourth quarter of 2008, as output decreased 8.7 percent and hours of all persons--employees, proprietors, and unpaid family workers--decreased 8.3 percent. As in the business sector, the decline in nonfarm business output was the largest since the first quarter of 1982 (-8.7 percent) and the decline in hours was the largest since the first quarter of 1975 (-12.0 percent). Productivity increased 2.2 percent during the last four quarters.

Hourly compensation grew 5.3 percent in the fourth quarter of 2008. Real hourly compensation rose steeply, 15.9 percent, when the 9.2 percent decrease in consumer prices was taken into account. This was the largest increase in the real hourly compensation series, which begins in the second quarter of 1947. As in the business sector, real hourly compensation rose 2.5 percent during the past four quarters.

Unit labor costs increased 5.7 percent in the fourth quarter and 1.8 percent over the last four quarters. The implicit price deflator for nonfarm business increased 0.5 percent in the fourth quarter after increasing 4.7 percent in the previous quarter.

Manufacturing

Manufacturing productivity, output, and hours all declined in the fourth quarter of 2008; output per hour fell 4.0 percent, output dropped 17.7 percent, and hours fell 14.2 percent. These were the largest declines for each of these series, which begin with data for the second quarter of 1987. From the fourth quarter of 2007 to the fourth quarter of 2008 manufacturing productivity decreased 1.1 percent, output fell 8.0 percent and hours fell 6.9 percent.

In the durable goods manufacturing sector, productivity dropped 14.8 percent in the fourth quarter of 2008, as output fell 26.9 percent and hours declined 14.2 percent. These were the largest decreases in output and output per hour for the entire series beginning in the second quarter of 1987. In the nondurable goods sector, productivity rose 7.6 percent in the fourth quarter as hours fell faster than output; output declined 7.7 percent and hours fell 14.2 percent.

Hourly compensation of all manufacturing workers increased 10.1 percent during the fourth quarter of 2008, and after taking into account the 9.2 percent decrease in consumer prices, real hourly compensation in manufacturing rose a series-high 21.2 percent. Hourly compensation also rose 10.1 percent in durable and nondurable manufacturing; real hourly compensation increased 21.2 percent and 21.3 percent, respectively.

Unit labor costs in manufacturing increased 14.7 percent in the fourth quarter of 2008. These cost increases were concentrated in durable goods manufacturing where unit labor costs rose 29.1 percent; unit labor costs rose 2.3 percent in nondurable goods industries. Over the last four quarters manufacturing unit labor costs increased 6.8 percent.

ANNUAL AVERAGE CHANGES, 2007-2008

Business and Nonfarm Business