THE PRIMARY SOURCE
Read the release
Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.
First Quarter 2002
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 first quarter of 2002. The seasonally adjusted annual rates of productivity change in the first quarter were:
8.5 percent in the business sector and 8.6 percent in the nonfarm business sector.
These large productivity increases resulted from output growth of 6.5 percent in both the business and nonfarm business sectors in combination with declines in hours worked. Hours of all persons decreased 1.8 percent in the business sector and 1.9 percent in the nonfarm business sector. First- quarter measures are summarized in table A and appear in detail in tables 1 through 5.
In manufacturing, productivity changes in the first quarter were:
9.7 percent in manufacturing, 13.3 percent in durable goods manufacturing, and 5.1 percent in nondurable goods manufacturing.
Productivity growth in manufacturing in the first quarter of 2002 reflected an increase of 3.2 percent in output and a drop of 5.9 percent in hours of all persons (seasonally adjusted annual rates). Output and hours in manufacturing, which includes about 16 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.
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.
Business
Productivity in the business sector increased at an 8.5 percent annual rate from the fourth quarter of 2001 to the first quarter of 2002, as output increased 6.5 percent and hours of all persons engaged in the sector declined 1.8 percent (seasonally adjusted annual rates). This was the largest increase in business sector output per hour since the second quarter of 1972, when it rose 9.1 percent. Revised data for the fourth quarter of 2001 show that output per hour increased 5.4 percent, as output increased 1.6 percent and hours of all persons fell 3.6 percent (table 1).
Hourly compensation increased 2.8 percent during the first quarter of 2002. 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, rose at a 1.3 percent annual rate in the first quarter of 2002, following a 2.5 percent increase during fourth- quarter 2001.
Unit labor costs, which reflect changes in hourly compensation and productivity, fell at a 5.3 percent rate during first-quarter 2002, after falling 3.0 percent in the fourth quarter of 2001. The first-quarter drop in unit labor costs was the largest in this sector since the first quarter of 1955, when they dropped 7.5 percent.
The implicit price deflator for the business sector, which reflects changes in both unit labor costs and unit nonlabor payments, fell at a 0.2 percent annual rate in the first quarter.
Nonfarm business
Productivity increased 8.6 percent in the nonfarm business sector in first-quarter 2002, as output increased 6.5 percent and hours of all persons decreased 1.9 percent (seasonally adjusted annual rates). This was the largest increase in nonfarm business sector output per hour since the second quarter of 1983, when it rose 9.9 percent. During the fourth quarter of 2001, productivity had increased 5.5 percent, as output rose 1.5 percent and hours fell 3.8 percent (table 2).
Hourly compensation increased at a 2.7 percent annual rate in the first quarter of 2002. When the rise in consumer prices was taken into account, real hourly compensation rose 1.2 percent in the first quarter; it had increased 2.6 percent in the fourth quarter of 2001.
Unit labor costs fell 5.4 percent in the first quarter of 2002 and 3.1 percent in the fourth quarter of 2001. The first-quarter decrease was the largest since the second quarter of 1983, when unit labor costs fell 6.5 percent. The implicit price deflator for nonfarm business output declined 0.8 percent in the first quarter and 0.4 percent one quarter earlier.
Manufacturing
Productivity increased 9.7 percent in manufacturing in the first quarter of 2002, as output increased 3.2 percent and hours of all persons declined 5.9 percent (seasonally adjusted annual rates). Both output and hours had fallen in fourth-quarter 2001--by 6.3 and 10.4 percent, respectively--and productivity grew 4.7 percent. In the first quarter of 2002, productivity grew 13.3 percent in durable goods manufacturing, where output rose 5.0 percent and hours fell 7.3 percent. Nondurable goods manufacturing productivity rose 5.1 percent, reflecting a 1.2 percent rise in output and a 3.7 percent drop in hours of all persons.
Hourly compensation of all manufacturing workers rose 2.5 percent during the first quarter, and real hourly compensation increased 1.1 percent. The hourly compensation of workers in durable goods manufacturing rose 2.0 percent, while that of employees in nondurable goods manufacturing grew 3.9 percent.
Unit labor costs in manufacturing fell 6.5 percent in the first quarter of 2002, as unit labor costs of durable goods producers fell 9.9 percent and those of nondurable goods producers declined at a 1.1 percent annual rate. The decrease for total manufacturing was the largest since a 6.9 percent decrease in the second quarter of 1961.
Fourth-quarter and annual measures for nonfinancial corporations
Fourth-quarter and annual 2001 measures of productivity and costs also were announced today for the nonfinancial corporate sector (tables B, C, and 6). Output per all-employee hour grew 11.2 percent from the third to the fourth quarter of 2001, as output grew 6.2 percent and employee hours fell 4.5 percent. This was the largest productivity increase in this sector since the second quarter of 1975, when productivity grew 11.4 percent, output grew 6.8 percent, and hours worked fell 4.2 percent. 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.
Hourly compensation increased 3.6 percent in the fourth quarter, and real hourly compensation rose 3.9 percent. Unit labor costs fell 6.8 percent in the fourth quarter of 2001--the largest decrease in the series, which begins with data for 1958. In the fourth quarter, unit profits increased at a 58.0 percent annual rate after falling in the five previous quarters. The implicit price deflator for nonfinancial corporate output fell 3.2 percent during the fourth quarter of 2001, compared with a 2.8 percent increase in the third quarter.
Productivity grew 2.3 percent in 2001 for nonfinancial corporations, following increases of 3.1 percent in each of the 3 previous years (table C). Nonfinancial corporate output grew 1.1 percent in 2001, and employee hours decreased 1.2 percent. This was the first decrease in employee hours since a 3.1-percent decline in 1991.
Hourly compensation grew 6.5 percent in 2001, and real hourly compensation increased 3.6 percent. Total unit costs rose 4.2 percent, reflecting increases of 4.1 percent in unit labor costs and 4.4 percent in unit nonlabor costs. Unit profits fell 19.0 percent in 2001, continuing a series of annual declines that began in 1998. The implicit price deflator, which reflects both the unit costs and unit profits measures, rose 1.8 percent in 2001.
REVISED MEASURES
Current and previous measures for the fourth quarter of 2001 for the business, nonfarm business, and manufacturing sectors are compared in table D. Some of the quarterly movements differ from those reported on March 7, based on information then available. In all three sectors, productivity and output were revised up and unit labor costs were revised down.
The Consumer Price Index Research Series has been updated. This affected indexes of real hourly compensation for all years.
Source: U.S. Bureau of Labor Statistics · Original release May 7, 2002.
Archived Nov 11, 2026. Source reuse policy. Formatting has been adapted for reading; the source’s conclusions remain attributed to its publisher.