Nonfarm business
Productivity in the nonfarm business sector grew at a 1.9-percent annual rate during the third quarter of 2004. Output grew 4.1 percent in the third quarter and hours worked in the nonfarm business sector rose 2.1 percent, reflecting a 1.7-percent gain in employment and a 0.4-percent increase in average weekly hours at work. Nonfarm business productivity increased 3.9 percent in the second quarter of 2004 (revised), as output grew 4.2 percent and hours rose by 0.3 percent.Hourly compensation increased at a 3.6 percent annual rate in the third quarter of 2004. When the rise in consumer prices is taken into account, real hourly compensation rose 1.7 percent during the July-September period. During the second quarter of 2004, real hourly compensation had risen 0.2 percent.
Unit labor costs grew 1.6 percent during the third quarter of 2004. In the second quarter, unit labor costs in the nonfarm business sector had risen 1.0 percent. The implicit price deflator for nonfarm business output rose 1.6 percent in the third quarter of 2004.
Manufacturing
Productivity increased 4.3 percent in manufacturing in the third quarter of 2004, as output grew 4.0 percent and hours of all persons fell 0.3 percent (seasonally adjusted annual rates). In durable goods, productivity grew 5.0 percent in the third quarter as output increased 6.3 percent and hours of all persons rose 1.3 percent. Productivity increased 4.3 percent in nondurable goods, as a modest output increase of 1.3 percent was combined with a decline of 2.8 percent in hours of all persons.The hourly compensation of manufacturing workers increased an average of 4.4 percent during the third quarter of 2004, reflecting increases of 3.9 percent in durable goods and 5.1 percent in nondurable goods. When the increase in consumer prices is taken into account, real hourly compensation in total manufacturing rose 2.5 percent in the third quarter. Real hourly compensation had fallen in both of the previous quarters, 0.9 percent in the second quarter (as revised) and 7.4 percent in the first quarter.
Unit labor costs in manufacturing edged up by 0.1 percent in the third quarter of 2004, after falling in three of the previous four quarters. In the durable goods sector, unit labor costs in the third quarter fell 1.0 percent in the third quarter and in the nondurable goods sector, these costs rose 0.8 percent.
