December 06, 2002 (The Editor’s Desk is updated each business day.)

Decline of manufacturing unit labor costs continues

Unit labor costs in the manufacturing sector fell at an annual rate of 1.0 percent (seasonally adjusted) in the third quarter of 2002. This decrease continued a series of quarterly declines in these costs that began in the third quarter of 2001.

[Chart data—TXT]

The third-quarter decrease in unit labor costs in the manufacturing sector resulted from a combination of a 4.4-percent increase in hourly compensation and a 5.5-percent rise in productivity. The change in unit labor costs is roughly equal to the change in hourly compensation less the change in productivity.

These data are from the BLS Productivity and Costs program. Unit labor costs—the cost of the labor input required to produce one unit of output—are computed by dividing labor costs in nominal terms by real output. Data are subject to revision. Additional information is available in "Productivity and Costs, Third Quarter 2002 (revised)" (PDF) (TXT), news release USDL 02-668.