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.
Fourth Quarter and Annual Averages, 2002
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 annual changes for the full year 2002. Percent changes in business and nonfarm business productivity were:
Business sector 0.3 4.8 Nonfarm business sector 0.8 4.8
In both sectors, fourth-quarter productivity increased rather than declining as originally reported. Fourth-quarter productivity and related measures are summarized in table A and appear in detail in tables 1 through 5; the preliminary and revised fourth-quarter and annual data appear in table C.
In the manufacturing sector, increases in productivity were:
Manufacturing 0.1 4.5 Durable goods manufacturing 2.9 5.6 Nondurable goods manufacturing -3.4 2.8
Manufacturing productivity rose 0.1 percent (seasonally adjusted annual rate) in the fourth quarter. This increase was lower than originally reported, reflecting downward revisions to output per hour in both the durable and nondurable goods manufacturing subsectors. (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.)
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 data 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.
THIRD-TO-FOURTH QUARTER 2002 CHANGES
Business
Labor productivity in the business sector rose at a 0.3 percent annual rate in the fourth quarter of 2002, as output increased 1.8 percent and hours of all persons engaged in the sector increased 1.5 percent (table 1). The fourth-quarter increase in business sector hours followed six consecutive quarterly declines. During third quarter 2002, productivity had increased 5.8 percent as output grew 5.3 percent and hours declined 0.5 percent.
Hourly compensation grew at a 4.2-percent annual rate in the fourth quarter, compared with a 5.7-percent rise in the third 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, rose 2.2 percent in the fourth quarter of 2002 after increasing 3.5 percent one quarter earlier.
Unit labor costs, which reflect changes in both hourly compensation and productivity, increased 3.9 percent during the fourth quarter of 2002, after being unchanged in the third quarter. The implicit price deflator for business output, which reflects changes in unit labor costs and unit nonlabor payments, increased 1.3 percent in the fourth quarter and 0.5 percent in the third quarter.
Nonfarm business
In the nonfarm business sector, productivity rose at an annual rate of 0.8 percent in the fourth quarter of 2002, as output grew 1.7 percent and hours of all persons--employees, proprietors, and unpaid family workers--rose 0.9 percent (seasonally adjusted annual rates). During the third quarter, productivity had increased 5.5 percent, output had increased 5.2 percent, and hours had declined 0.2 percent (table 2).
Hourly compensation rose 4.6 percent in the fourth quarter, after rising 5.4 percent in the third quarter. When the increase in consumer prices was taken into account, real hourly compensation rose 2.5 percent in the fourth quarter and 3.1 percent in the third quarter.
Unit labor costs grew 3.8 percent in the fourth quarter, after edging down 0.1 percent in the third quarter. The implicit price deflator for nonfarm business increased 1.2 percent in the fourth quarter, as a 2.8 percent decline in unit nonlabor payments offset much of the increase in unit labor costs.
Manufacturing
Manufacturing productivity rose 0.1 percent in the fourth quarter of 2002, as both output and hours dropped by 3.2 percent (seasonally adjusted annual rates). In durable goods industries, productivity increased 2.9 percent when output fell 2.3 percent but hours fell faster, 5.0 percent. In nondurable goods industries, output per hour fell 3.4 percent, reflecting declines in output and hours of 3.9 percent and 0.5 percent, respectively. During the third quarter, productivity had increased 5.5 percent in total manufacturing, 7.9 percent in durable goods manufacturing, and 2.4 percent in nondurable goods manufacturing (tables 3, 4, and 5).
Hourly compensation of all manufacturing workers increased 5.5 percent during the fourth quarter, rising in both of the manufacturing subsectors-- 6.4 percent in durable goods and 4.4 percent in nondurable goods. When the increase in consumer prices was taken into account, real hourly compensation for all manufacturing workers rose 3.4 percent in the fourth quarter.
Unit labor costs in manufacturing grew 5.4 percent in the fourth quarter of 2002, the largest increase in this measure since the third quarter of 2000 (7.8 percent). Unit labor costs rose 3.4 percent in durable goods manufacturing and 8.1 percent in nondurable goods industries. Manufacturing unit labor costs had increased only 0.1 percent in the third quarter.
ANNUAL AVERAGE CHANGES, 2001-2002
Business
Business sector productivity increased 4.8 percent when the annual index for 2002 was compared with the annual index for 2001 (table B). This was the largest annual productivity gain since 1950, when business sector output per hour increased 8.5 percent. The 2001-2002 increase reflected a 2.7-percent increase in output combined with a 2.0-percent decline in hours. In 2001, output per hour had increased 1.1 percent, when output declined 0.2 percent and hours worked fell 1.3 percent.
Percent change from previous year
Hourly compensation in the business sector increased 2.9 percent in both 2001 and 2002. Real hourly compensation increased more in 2002, 1.3 percent, than it had in 2001, 0.2 percent, because consumer prices rose less in 2002 than they had in 2001.
Business sector unit labor costs decreased 1.7 percent in 2002. This was the largest annual decrease to date in this measure, which begins with data for 1948. Unit labor costs rose 1.8 percent in 2001. The implicit price deflator rose 0.4 percent in 2002, compared with a 2.0-percent increase in 2001.
Nonfarm business
Productivity increased 4.8 percent in the nonfarm business sector during 2002, more than in any year since 1950, when output per hour grew 6.9 percent. Output grew 2.7 percent and hours of all persons fell 2.0 percent in 2002. The decline in hours was the largest since they fell 2.4 percent in 1991. Nonfarm business productivity had increased 1.1 percent in 2001, when output edged down 0.1 percent and hours fell 1.2 percent.
Hourly compensation grew 2.8 percent in 2002, about the same as the 2.7- percent increase in 2001. Real hourly compensation increased 1.2 percent in 2002, following a 0.1-percent decline in the previous year.
Unit labor costs in the nonfarm business sector dropped 1.9 percent in 2002, the largest annual decline in this measure ever recorded. These costs had increased 1.6 percent during 2001. The implicit price deflator, which reflects nonlabor payments as well as labor costs, rose 0.5 percent in 2002, following a 1.9-percent rise in 2001.
Manufacturing
Manufacturing productivity grew 4.5 percent in 2002, rebounding from a small increase in 2001 of 0.8 percent. Output fell 1.1 percent in 2002, and hours of all persons working in the sector dropped 5.4 percent. Labor productivity increased 5.6 percent in durable goods manufacturing, reflecting declines of 1.4 percent in output and 6.7 percent in hours. In nondurable goods manufacturing, productivity rose 2.8 percent in 2002, output fell 0.7 percent, and hours declined 3.4 percent (tables B, 3, 4, and 5).
Hourly compensation of manufacturing workers increased 3.8 percent in 2002, compared to a 1.5 percent increase one year earlier. Real hourly compensation rose 2.1 percent in 2002, after having declined 1.2 percent in 2001. Hourly compensation increased 4.1 percent in durable goods industries and 3.5 percent in nondurable goods industries in 2002.
Unit labor costs declined 0.7 percent in manufacturing. In durable manufacturing, unit labor costs fell 1.4 percent in 2002. By contrast, unit labor costs in nondurable manufacturing rose last year, by 0.7 percent.
REVISED MEASURES
Productivity and cost data for the fourth quarter and full year 2002 for business, nonfarm business, and manufacturing were revised to incorporate the most recent information (table C). Quarterly measures of real hourly compensation in the business, nonfarm business, nonfinancial corporate, and manufacturing sectors for 2002 were revised to incorporate the annual recalculation of seasonal factors for the Consumer Price Index.
In the business and nonfarm business sectors, changes in productivity and output are greater--and increases in unit labor costs are smaller--than those reported on Feb. 6, based on information available at that time. Fourth-quarter measures of manufacturing productivity were revised down from those reported on Feb. 6, reflecting a larger decline in output than originally reported. As a result, unit labor costs in manufacturing showed a larger increase than previously reported. Annual measures of productivity and costs are similar to those reported on Feb. 6.
Percent change, third to fourth quarter 2002
Source: U.S. Bureau of Labor Statistics · Original release Mar 6, 2003.
Archived Nov 11, 2026. Source reuse policy. Formatting has been adapted for reading; the source’s conclusions remain attributed to its publisher.