Economic News Release

TECHNICAL NOTES 

The comparisons in this release are based on data available to the Bureau of
Labor Statistics as of September 1 from national statistical offices of the
19 countries compared. Below is a summary of the concepts used in this release.
For more detailed information, see www.bls.gov/ilc/#productivity. 

Definitions. Labor productivity is defined as real output per hour worked. Unit
labor costs are defined as the cost of labor input required to produce one unit
of output, and are computed as compensation in nominal terms divided by real output. 

Methodology. In general, the measures relate to total manufacturing as defined by
the International Standard Industrial Classification (ISIC). Data for the United
States and Canada are in accordance with the North American Industry Classification
System (NAICS), except for compensation data for the United States before 1987. For
most countries, the measures are prepared according to the United Nations System
of National Accounts 1993 (SNA 93) for the most recent years. For earlier years,
data were compiled according to other systems of national accounts. 

BLS constructs the trends in this release from three basic measures: output,
total labor hours, and total compensation. In general, the output measures are
real value added. Total labor hours refer to hours worked by all employed persons.
Total compensation includes employer expenditures for direct pay, employer social
insurance expenditures, and labor-related taxes and subsidies. 

Output for the United States. The U.S. manufacturing output series used in this
release differs from the manufacturing output series that BLS publishes as part
of its major sector productivity and costs measures for the United States.(1)  The 
international labor comparisons program uses a value added output concept, while
the major sector series is on a sectoral output basis, which is gross output less
intra-sector sales and transfers. Even though BLS has determined that sectoral
output is the correct concept for U.S. measures of productivity, there are other
considerations that make value added the better concept for international 
comparisons of labor productivity, such as differences among countries in the
extent of vertical integration of industries and the availability of value added data. 
	
Level Comparisons. The BLS measures are limited to trend comparisons. BLS does
not prepare level comparisons of manufacturing productivity because of data
limitations and technical problems in comparing the levels of manufacturing
output among countries.


1.  For more information about sectoral output, see www.bls.gov/lpc/.