U.S. economic performance relative to other group of seven (G-7) members.
The real gross domestic product (GDP GDP (guanosine diphosphate): see guanine. ) of the United States-the output of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. produced in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. measured in 1996 prices-increased at an annual rate of 3.7 percent in the third quarter of 2004, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. advance estimates by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA BEA - Basic programming Environment for interactive-graphical Applications, from Siemens-Nixdorf. ). (2) In the second quarter real GDP Real GDP
This inflation-adjusted measure that reflects the value of all goods and services produced in a given year, expressed in base-year prices. Often referred to as "constant-price", "inflation-corrected" GDP or "constant dollar GDP". increased by 3.3 percent, down from the 4.5 percent increase in the first quarter. The major contributors to the increase in real GDP in the third quarter of 2004 were personal consumption expenditure, equipment and software, exports, government spending Government spending or government expenditure consists of government purchases, which can be financed by seigniorage, taxes, or government borrowing. It is considered to be one of the major components of gross domestic product. , and residential fixed investment. The contributions of these components were partly offset by a decline in private inventory investment. Imports increased (accounted for as a subtraction subtraction, fundamental operation of arithmetic; the inverse of addition. If a and b are real numbers (see number), then the number a−b is that number (called the difference) which when added to b (the subtractor) equals from GDP).
Real personal consumption expenditure increased by 4.6 percent in the third quarter, up from an increase of 1.6 percent in the second. Durable goods durable goods
Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. purchases increased 16.8 percent in the third quarter compared with a decrease of 0.3 percent in the second. Nondurable non·du·ra·ble
Not enduring; being in a state of constant consumption: nondurable items such as paper products.
A consumable item: nondurables such as food. goods increased by 3.9 percent, compared with an increase of 0.1 percent in the second; and services expenditures increased by 2.7 percent, the same as in the second quarter. Real nonresidential Adj. 1. nonresidential - not residential; "the commercial or nonresidential areas of a town"; "community colleges are typically nonresidential"
residential - used or designed for residence or limited to residences; "a residential hotel"; "a residential quarter"; "a fixed investment increased by 11.7 percent in the third quarter, compared with an increase of 12.5 percent in the second. Nonresidential structures increased by 1.4 percent, compared with an increase of 6.9 percent. Equipment and software increased by 14.9 percent in the third quarter compared with an increase of 14.2 percent in the second. Real residential fixed investment increased by 3.1 percent, down from an increase of 16.5 percent in the second quarter.
Real exports of goods and services increased by 5.1 percent in the third quarter of 2004, down from an increase of 7.3 percent in the second. Real imports of goods and services in 2004, second quarter increased by 7.7 percent, compared with an increase of 12.6 percent in the second quarter.
Real federal government consumption expenditure and gross investment increased by 4.6 percent in 2004, third quarter, compared with an increase of 2.7 percent in the preceding quarter. National defense spending increased by 9.3 percent in the third quarter of 2004, following an increase of 4.4 percent in the second. Nondefense spending decreased by 4.7 percent in 2004, third quarter, compared with the second quarter increase of 4.4 percent. Real state and local government consumption expenditures and gross investment decreased by 0.5 percent during 2004, third quarter, compared with an increase of 1.9 percent in the second quarter.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased by 1.8 percent in the third quarter, compared with an increase of 3.5 percent in the second quarter. Excluding food and energy prices, the price index for gross domestic purchases increased by 1.5 percent in the third compared with an increase of 2.5 percent in the second.
In other G-7 economies, the annualized annualized
Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rates of real GDP growth were as follows. In the United Kingdom, the economy grew by 1.5 percent in the third quarter of 2004, and by 3.0 percent during the year through 2004, third quarter. In Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , the economy grew by 1.9 percent in the second quarter, and by 2.0 percent in the year through the second quarter of 2004. In Japan, the economy grew by 1.3 percent in the second quarter, but grew by 4.2 percent in the year through the second quarter of 2004. In Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. , the economy grew by 1.1 percent in the second quarter, and by 1.2 percent in the year through the second quarter of 2004. In France, the economy grew by 2.8 percent in the second quarter of 2004, and grew at the same rate in the year through the second quarter of 2004. In Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , the economy grew by 4.3 percent in the second quarter of 2004, but grew by 3.0 percent in the year through the second quarter of 2004. For EU members linked by the euro currency, the euro area, GDP grew by 2.0 percent in the second quarter of 2004, and grew at the same rate in the year through the second quarter of 2004.
U.S. Corporate Profits
The U.S. Department of Commerce in their GDP news release for the second quarter of 2004 reported that corporate profits from current production, with inventory valuation and capital consumption adjustment, increased by $8.3 billion in the second quarter of 2004, down from the $36.5 billion increase in 2004, first quarter; and substantially less than the increases of $72.0 billion in 2003, fourth quarter, and an increase of $70.9 billion in 2003, third quarter. Current-production cash flow, net cash flow with inventory valuation and capital consumption adjustments-the internal funds internal funds
Funds that are raised within a firm. For example, income after taxes and noncash expenses, such as depreciation, provide a firm with funds to use in the acquisition of investments. available to corporation for investment-decreased by $5.7 billion in the second quarter of 2004, down from an increase of $5.9 billion in the first quarter of 2004. (3)
Domestic profits by financial and nonfinancial Adj. 1. nonfinancial - not involving financial matters
financial, fiscal - involving financial matters; "fiscal responsibility" firms together increased by $28.3 billion in the second quarter of 2004, compared with an increase of $47.0 billion in the first quarter. Domestic profits of financial corporations decreased $7.9 billion in 2004, second quarter, in contrast to an increase of $19.8 billion in the first quarter. Domestic profits of nonfinancial corporations increased by $36.2 billion in 2004, second quarter, compared with an increase of $27.3 billion in the first quarter. In 2004, second quarter, real gross value-added val·ue-add·ed
Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: increased and profits per unit of real gross value added Value Added
The enhancement a company gives its product or service before offering the product to customers.
This can either increase the products price or value. increased. The 2004, second quarter increase in unit profits reflected a larger increase in prices corporations received than the unit costs they incurred, as unit labor costs increased while unit nonlabor costs remained unchanged.
The foreign component of profits decreased by $20.0 billion in the second quarter of 2004, compared with an increase of $10.5 billion in the first quarter. This measure is calculated as (1) receipts by U.S. residents of earnings from their foreign affiliates, including dividends received by U.S. residents from unaffiliated foreign corporations, minus (2) payments by U.S. affiliates of earnings to their foreign parent companies, plus dividends paid by U.S. corporations to unaffiliated foreign residents. The second quarter 2004 decrease was accounted for by a large increase in payments and a small decrease in receipts.
The Federal Reserve Board reported that U.S. industrial production rose by 0.1 percent in September September: see month. 2004 after decreasing by 0.1 percent in August, and following an increase of 0.7 percent in July July: see month. 2004. Total output was 4.6 percent higher in September 2004 than its level in September 2003. Manufacturing output declined by 0.3 percent in September, but posted a substantial annual rate of increase of 5.3 percent over September 2003. Utilities output increased 5.4 percent in September following a decrease of 2.3 percent in August as temperatures returned to normal levels after unseasonably warm weather in August. Utilities output in September 2004 was 5.5 percent higher than in September 2003. Mining output declined by 2.3 percent in September as the recent spate of hurricanes appears to have had a noticeable restraining RESTRAINING. Narrowing down, making less extensive; as, a restraining statute, by which the common law is narrowed down or made less extensive in its operation. effect on production. The index for the rate of capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. for total industry was unchanged in September at 77.2 percent in September 2004, and was 1.5 percentage points above its level in September 2003, and 3.9 percentage points below its 1972-2003 average.
By market group, the output of consumer goods consumer goods
Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and rose 0.3 percent in September 2004. The production of consumer durables Consumer durables
Consumer products that are expected to last three years or more, such as an automobile or a home appliance.
See durable goods. fell 0.3 percent in September as output in all major categories slipped. The output of consumer automotive products edged down after a sizable siz·a·ble also size·a·ble
Of considerable size; fairly large.
siza·ble·ness n. gain in August. The output of business equipment rose 0.3 percent in September, and it increased 10.0 percent over September 2003. The production of information processing information processing: see data processing.
Acquisition, recording, organization, retrieval, display, and dissemination of information. Today the term usually refers to computer-based operations. equipment increased by 0.3 percent in September, but rose by 12.6 percent over September 2003. Computer and electronic products increased for the fourth consecutive month by 0.7 percent in September 2004, and was 9.5 percent higher than in September 2003.
Other G-7 member countries reported the latest growth rates Growth Rates
The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures.
Remember, historically high growth rates don't always mean a high rate of growth looking into the future. of industrial production for the month of August 2004, as follows: the United Kingdom reported a 0.1-percent decrease, France reported a 0.7- percent increase; Germany reported a 3.5-percent increase, Italy reported a 3.5-percent decrease, Canada reported a 4.1-percent increase, and Japan reported an 3.8-percent increase in September 2004. The euro area reported an increase of 1.5 percent for the month of August 2004.
The seasonally adjusted Seasonally adjusted
Mathematically adjusted by moderating a macroeconomic indicator (e.g., oil prices/imports) so that relative comparisons can be drawn from month to month all year. U.S. Consumer Price Index increased by 0.2 percent in September 2004 following an increase of 0.1 percent in August, according to the U.S. Department of Labor. For the year ended September 2004, consumer prices increased 2.5 percent. Energy costs declined 0.4 percent in September after advancing sharply in the first half of the year. The index for food was unchanged in September following an increase of 0.1 percent in August. The price index for all items, less food and energy, increased by 0.3 percent in September and increased by 2.0 percent in the 12 months ended September 2004.
Other G-7 members reported the latest consumer price increases as follows: consumer prices increased by 2.1 percent in Germany, 2.1 percent in Italy, 1.1 percent in the United Kingdom, 1.8 percent in Canada, 2.2 percent in France, but prices decreased by 0.2 percent in Japan. Prices increased by 2.1 percent in the euro area.
The U.S. Department of Labor, Bureau of Labor Statistics Bureau of Labor Statistics (BLS)
A research agency of the U.S. Department of Labor; it compiles statistics on hours of work, average hourly earnings, employment and unemployment, consumer prices and many other variables. , reported that the U.S. unemployment rate was virtually unchanged at 5.4 percent in September 2004. Job growth in September was little changed in most of the major industry sectors over the month. In other G-7 countries, the latest unemployment rates were reported to be 7.1 percent in Canada, 9.9 percent in France, 10.7 percent in Germany, 8.1 percent in Italy, 4.8 percent in Japan, and 4.7 percent in the United Kingdom. The unemployment rate in the euro area was 9.0 percent.
The world economy continues to display characteristics favorable fa·vor·a·ble
1. Advantageous; helpful: favorable winds.
2. Encouraging; propitious: a favorable diagnosis.
3. to long-term Long-term
Three or more years. In the context of accounting, more than 1 year.
1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth, according to the International Monetary Fund (IMF IMF
See: International Monetary Fund
See International Monetary Fund (IMF). ) and the Organization for Economic Co-operation and Development (OECD OECD: see Organization for Economic Cooperation and Development. ).
Forecasts of the International Monetary Fund in their latest report on the world economic outlook show that the global recovery has become increasingly well established. (4) World output growth is projected at about 5.0 percent; world trade volume projected to rise sharply by about 8.8 percent in 2004 and by 7.2 percent in 2005; with strong growth in industrial countries and exceptionally rapid expansion in emerging markets, notably China. World growth has been accomplished by a strong upturn in global trade flows, a pickup Pickup
A gain in yield made by selling one bond and buying another. Also referred to as "yield pickup."
When the present yield is relatively low compared to the longer-term yields, pickups will be done by investors trying to increase the yield and duration of their in private consumption expenditure, underpinned by generally improving labor market labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience conditions, and continued strength in investment, as post bubble A bit in bubble memory or a symbol in a bubble chart. corporate balance sheets restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). has proceeded. But challenges and risks still remain, including terrorist attacks, global trade imbalances, high oil prices, and fiscal deficits. Although the global recovery appears to be underway, its pace and nature vary significantly across regions. Well established recoveries appear underway in the United States and Asia, but less well established recoveries appear in the euro area as domestic demand and consumption remain weak.
In the United States, GDP is projected by the IMF to grow at 4.3 percent in 2004, and 3.5 percent in 2005. Inflation is expected to remain subdued sub·due
tr.v. sub·dued, sub·du·ing, sub·dues
1. To conquer and subjugate; vanquish. See Synonyms at defeat.
2. To quiet or bring under control by physical force or persuasion; make tractable.
3. , with consumer prices projected to increase by 3.0 percent in 2004, and in 2005. The unemployment rate is projected at 5.5 percent in 2004 and 5.4 percent in 2005.
In contrast, GDP in the euro area is projected to grow at 2.2 percent in 2004 and in 2005; consumer prices to increase by 2.1 percent in 2004 and by 1.9 percent in 2005; and the unemployment rate to remain high at 9.0 percent in 2004 and at 8.7 percent in 2005.
In Japan, GDP is projected to grow by 4.4 percent in 2004 and by 2.3 percent in 2005; consumer prices to decline by 0.2 percent in 2004 and by 0.1 percent in 2005 as deflationary de·fla·tion
1. The act of deflating or the condition of being deflated.
2. A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available pressures persist albeit at a slower rate; and the unemployment rate to remain at 4.7 percent in 2004 and 4.5 percent in 2005. In Canada, GDP is projected to grow by 2.9 percent in 2004, and by 3.1 percent in 2005; consumer prices are projected to increase by 1.9 percent in 2004 and by 2.2 percent in 2005; and the unemployment rate is projected at 7.2 percent in 2004 and 6.8 percent in 2005. In the newly industrialized in·dus·tri·al·ize
v. in·dus·tri·al·ized, in·dus·tri·al·iz·ing, in·dus·tri·al·iz·es
1. To develop industry in (a country or society, for example).
2. Asian countries Noun 1. Asian country - any one of the nations occupying the Asian continent
country, land, state - the territory occupied by a nation; "he returned to the land of his birth"; "he visited several European countries" , GDP is projected to grow by 5.5 percent in 2004 and by 4.0 percent in 2005; consumer prices are to increase by 2.4 percent in 2004 and by 2.6 percent in 2005; and the unemployment rate is projected at 4.1 percent in 2004 and in 2005.
The current account position for the United States is projected by the IMF to improve, reaching 5.4 percent of GDP in 2004 and 5.1 percent in 2005. Japan's current account surplus is expected to reach 3.4 percent of GDP in 2004 and at 3.2 percent in 2005. In the euro area the current account surplus would rise slightly from 2003 to 0.8 percent of GDP in 2004, and 0.9 percent in 2005. Germany's surplus would increase to 4.4 percent of GDP in 2004 and to 4.8 percent in 2005. Canada's surplus would reach 2.9 percent of GDP in 2004 and to 2.4 percent in 2005, up from 2.0 percent of GDP in 2003. The current account deficit in the United Kingdom as a percent of GDP would moderate to 2.0 percent in 2004 and 1.9 percent in 2005. France's current account surplus would turn into a deficit of 0.6 percent of GDP in 2004 and in 2005. The current account surplus of the newly industrialized Asian economies would also moderate to 6.8 percent of GDP in 2004 and 6.5 percent in 2005, down from 7.6 percent surplus in 2003.
OECD Forecast for the Industrialized Countries
Economic forecasts by the Organization of Economic Co-operation and Development (OECD) in its May 2004 Economic Outlook find that a strong momentum has finally taken hold across the OECD area following a drawn-out Adj. 1. drawn-out - relatively long in duration; tediously protracted; "a drawn-out argument"; "an extended discussion"; "a lengthy visit from her mother-in-law"; "a prolonged and bitter struggle"; "protracted negotiations" period of fits and starts. (5) The turn for the better stems from a variety of factors such as the steadying of the geopolitical ge·o·pol·i·tics
n. (used with a sing. verb)
1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation.
a. environment that has allowed oil prices to stabilize stabilize
See peg. and business confidence to strengthen. In the United States, the economic recovery has benefitted from strong productivity-gains, the stimulus stimulus /stim·u·lus/ (stim´u-lus) pl. stim´uli [L.] any agent, act, or influence which produces functional or trophic reaction in a receptor or an irritable tissue. provided by monetary and fiscal policies, and high-potentialinvestment growth. In Japan, the economy has shown a marked and better-than-expected impovement due to better investment prospects in the manufacturing sector and fast growing markets in other Asian economies. The OECD forecast states that the most likely scenario for the next two years is one of sustained growth in the United States and progressive recovery in Europe Europe (yr`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Japan, underpinned by a prolonged pro·long
tr.v. pro·longed, pro·long·ing, pro·longs
1. To lengthen in duration; protract.
2. To lengthen in extent. period of low inflation, monetary ease, and moderate long-term interest rates.
The OECD forecasted U.S. real GDP to grow by 4.2 percent in 2004, and by 3.8 percent in 2005. In contrast, Japan's real GDP is projected to grow by 1.8 percent both in 2004 and in 2005. In the euro area (EU-12), real GDP is projected to grow by 1.8 percent in 2004, and by 2.5 percent in 2005. In the larger area of the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the
European Community (EU-15), real GDP is projected to grow by 1.9 percent in 2004, and by 2.5 percent in 2005. Real GDP for the whole OECD area--the world's industrialized economies as a group--is projected to grow by 3.0 percent in 2004, and by 3.1 percent in 2005.
Inflation is projected to remain subdued in the United States, rising by 1.2 percent in both 2004 and 2005. In Japan, deflationary price pressures are expected to remain throughout the 2-year forecast period, as prices are projected to decline by 1.3 percent in 2004, and by 0.8 percent in 2005. In the euro area, inflation is projected to slow from 1.7 percent in 2004 to 1.6 percent in 2005. In the European Union, inflation is projected to slow from 1.8 percent in 2004, to 1.7 percent in 2005. In the overall OECD area, inflation is projected to remain slow at 1.4 percent in 2004 and 2005.
Unemployment is projected to decline to 5.9 percent in 2004 and to 5.2 percent in 2005 in the United States. In Japan, unemployment is projected to stay at 5.2 percent in 2004, and 5.0 percent in 2005. In the euro area, unemployment is projected to remain high at 9.0 percent in 2004, and at 8.7 percent in 2005. In the European Union, unemployment is projected to hit 8.1 percent in 2004, declining slightly to 7.9 percent in 2005. In the total OECD area, unemployment is projected to remain around 7.0 percent, declining to 6.7 percent in 2004 and 2005, respectively.
The U.S. current-account deficit-as a percent of GDP-is projected to remain high over the two years, growing to 5.0 percent in 2004 and to 5.1 percent in 2005. In Japan, the current-account surplus is projected to grow from 3.6 percent of GDP in 2004 to 4.3 percent in 2005. In the euro area, the current-account surplus is projected to remain at its current 0.7 percent in 2004, and rise to 0.9 percent in 2005. The overall OECD current-account deficit, as a percent of GDP, is projected to remain at 1.3 percent in both years.
World trade volume--the average of world merchandise imports plus exports--is projected to increase by 7.8 percent in 2004, and by 9.1 percent in 2005, up from the much lower growth rate of 4.0 percent in 2003.
Productivity and Costs, Second Quarter 2004
The Bureau of Labor Statistics of the U.S. Department of Labor reported that revised productivity data--as measured by output per hour of all persons--showed gains in the second quarter of 2004. (6) The revised seasonally adjusted annual rates of productivity change in the second quarter were 1.5 percent in the business sector, and 2.5 percent in the nonfarm business sector. In manufacturing, the revised productivity changes in the second quarter were 6.9 percent in manufacturing, 4.9 percent in durable goods manufacturing, and 9.7 percent in nondurable goods manufacturing (table 1).
Productivity in the business sector increased by 1.5 percent in the second quarter of 2004, as output increased by 3.2 percent, hours worked rose by 1.6 percent, hourly compensation rose by 3.7 percent. This measure of hourly compensation includes wages and salaries, supplements, employer contributions to employee benefit plans, and taxes. Real hourly compensation in the business sector declined by 0.1 percent in the second quarter, and unit labor costs rose by 2.1 percent. The change in unit labor cost approximates the change in hourly compensation less the change in productivity. The implicit price deflator Deflator
A statistical factor used to convert current dollar purchasing power into inflation-adjusted purchasing power. Enables the comparison of prices while accounting for inflation in two different time periods. for business output, which reflects changes in both unit labor costs and unit nonlabor payments, rose by 3.4 percent. In the first quarter of 2004, productivity grew by 3.9 percent as output grew by 5.3 percent and hours worked grew by 1.3 percent. Hourly compensation grew by 2.8 percent in the first quarter, and real hourly compensation declined by 0.8 percent. Unit labor costs declined by 1.1 percent and the implicit price deflator for business rose by 2.1 percent in the second quarter of 2004.
Productivity rose by 2.5 percent in the nonfarm business sector in the second quarter of 2004, reflecting a 3.5-percent rise in output and a 1.0-percent increase in working hours of all persons. Hourly compensation increased by 4.3 percent. Real hourly compensation in the second quarter declined by 0.4 percent, and unit labor costs grew by 1.8 percent. The implicit price deflator for nonfarm business output rose by 2.9 percent in the second quarter of 2004. In the first quarter of 2004, productivity increased by 3.7 percent as output grew by 5.7 percent, hours worked rose by 2.0 percent, hourly compensation rose by 2.0 percent, real hourly compensation decreased by 1.6 percent and unit labor cost decreased by 1.6 percent. The implicit price deflator rose by 2.0 percent.
In the second quarter of 2004, productivity in manufacturing grew by 6.9 percent as output expanded by 6.2 percent, working hours of all persons declined by 0.6 percent, hourly compensation rose by 3.2 percent. Real hourly compensation declined by 1.5 percent, and unit labor costs declined by 3.5 percent. In the first quarter of 2004, productivity grew by 2.7 percent as output expanded by 6.2 percent, hours worked rose by 3.4 percent, hourly compensation declined by 4.1 percent, real hourly compensation declined by 7.4 percent , and unit labor costs decreased by 6.6 percent.
In durable goods industries, productivity grew by 4.9 percent, as output expanded by 5.9 percent, hours worked rose by 1.0 percent, and hourly compensation declined by 2.3 percent. Real hourly compensation decreased by 2.3 percent, and unit labor costs decreased by 2.5 percent. In the first quarter, productivity grew by 4.3 percent, as output expanded by 9.9 percent, hours worked rose by 5.4 percent, and hourly compensation declined by 7.1 percent. Real hourly compensation decreased by 10.4 percent, and. unit labor costs in durables Durables
A category of consumer goods, durables are products that do not have to be purchased frequently. Some examples of durables are appliances, home and office furnishings, lawn and garden equipment, consumer electronics, toy makers, small tool manufacturers, sporting goods, declined by 10.9 percent.
In nondurable goods industries, productivity grew by 9.7 percent in the second quarter of 2004, as output expanded by 6.3 percent, but hours worked declined by 3.1 percent. Hourly compensation in nondurables manufacturing rose by 4.4 percent during the second quarter but real hourly compensation declined by only 0.3 percent as unit labor costs declined by 4.8 percent. In the first quarter, productivity rose by 1.6 percent as output expanded by 1.8 percent, hours worked rose by 0.2 percent and hourly compensation grew by 1.5 percent. Real hourly compensation declined by 2.0 percent and unit labor costs rose by zero percent.
It is worth noting that although productivity measures describe the relationship between real output and labor time involved in production, these do not measure the specific contributions of labor, capital , or any other factor of production. Rather, they reflect the joint effects of many influences, including changes in technology, capital investment, capacity utilization, organization, managerial skills, and other characteristics of the work force. Also, output and hours in manufacturing, which includes about 13 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. Moreover, 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 that these measures are not directly comparable. Output measures for business and nonfarm business are based on measures of gross domestic product prepared by the U.S. Department of Commerce, Bureau of Economic Analysis. Quarterly output measures for manufacturing reflect indexes of industrial production independently prepared by the Federal Reserve System, Board of Governors. Business output is an annual-weighted index constructed after excluding from GDP general government, nonprofit A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive.
Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law. institutions, and private households. Using this method, business output accounted for about 78 percent of the value of GDP.
(1) Michael Youssef Dr. Michael Youssef is the founding rector of the evangelical, Anglican, Church of the Apostles based in Atlanta ,Georgia and founder of the international preaching ministry, Leading the Way, which he also hosts. External Link
Dr Michael Youssef Biography Site is an international economist This article is about the profession. For the news publication, see The Economist.
An economist is an expert in the social science of economics. in the Country and Regional Analysis Division, U.S. International Trade Commission, Office of Economics. The views ex pressed in this article are those of the author. They are not the views of the U.S. International Trade Commission (USITC USITC United States International Trade Commission (US Federal agency) ) as a whole or of any individual Commissioner.
(2) Data for this article were taken largely from the most current of the following sources: U.S. Department of Commerce, Bureau of Economic Analysis, "Gross Domestic Product," news release series BEA 04-48, found at Internet address There are two kinds of addresses that are widely used on the Internet. One is a person's e-mail address, and the other is the address of a Web site, which is known as a URL. Following is an explanation of Internet e-mail addresses only. For more on URLs, see URL and Internet domain name. http:l/www.bea.doc.gov/bea/newsrel/gdpnewsrelease.htm; Federal Reserve Board of Governors, "Industrial Production and Capacity Utilization," statistical release series G.17, found at Internet address http://www.federalreserve.gov/releases/G77/Current/; U.S. Department of Labor, Bureau of Labor Statistics, "Consumer Price Index," news release series USDL-04-, found at Internet address http://www.bls.gov/news.release/cpi.nrO.htm; U.S. Department of Labor, Bureau of Labor Statistics, "The Employment Situation," news release series USDL-04-, found at Internet address http://www.bls.gov/news.release/enipsit.nr0.htm.
(3) BEA, "Gross Domestic Product: Second Quarter 2004 (Preliminary), Corporate Profits: Second Quarter 2004 (Preliminary)," BEA News, BEA 04-39, found at Internet address http://wwwbea.gov/bea/newsrelarchive/20041gdp2O4p.pdf, retrieved on Sept. 1, 2004.
(4) IMF, "Advancing Structural Reforms," World Economic outlook, April 2004, found at Internet address http://www.inif.org/external/pubs/ft/weo/2004/01/index. htm, retrieved on Sept. 1, 2004.
(5) OECD, Economic Outlook No. 75, June June: see month. 2004, found at Internet address http://www.oecd.org/document/1810,2340,en 2649 34109_20347538_1_1_1_1,00.htm l, retrieved on Sept. 8, 2004.
(6) U.S. Department of Labor, Bureau of Labor Statistics, "Productivity and Costs - Second Quarter 2004," News, USDL USDL United States Department of Labor 04-1727, Sept. 2, 2004, found at Internet address http://www.bls.gov/lpc/, retrieved on Sept. 8, 2004.
Michael Youssef (1)
email@example.com See .gov and GovNet.
(networking) gov - The top-level domain for US government bodies.
Table 1 Productivity and costs: Second quarter 2004 measures, seasonally adjusted annual rates Hourly Sector Productivity Output Hours compensation Percent change from preceding quarter Business 4.6 5.2 0.5 5.9 Nonfarm business 3.8 5.4 1.5 4.6 Manufacturing 2.9 5.8 2.8 6.2 Durable 5.9 9.3 3.2 5.5 Nondurable -0.7 1.4 2.1 7.3 Percent change from same quarter a year ago Business 5.6 5.9 0.3 4.8 Nonfarm business 5.5 5.9 0.4 4.6 Manufacturing 5.2 3.1 -2.0 6.1 Durable 7.4 5.7 -1.6 6.3 Nondurable 2.8 0.1 -2.6 5.6 Real hourly Unit labor Sector compensation costs Percent change from preceding quarter Business 2.2 1.2 Nonfarm business 0.9 0.8 Manufacturing 2.5 3.1 Durable 1.8 -0.4 Nondurable 3.6 8.1 Percent change from same quarter a year ago Business 2.8 -0.8 Nonfarm business 2.7 -0.8 Manufacturing 4.2 0.9 Durable 4.4 -1.0 Nondurable 3.7 2.8 Source: U.S. Department of Labor, Bureau of Labor Statistics, news release USDL 04-995, found at http://www.bls.gov/1pc/.