Total compensation costs for civilian workers increased 0.5 percent, seasonally adjusted, from September to December 2008. For the year ended December 2008, compensation costs rose 2.6 percent. The 12-month increase for wages and salaries was 2.7 percent and the benefits increase was 2.2 percent.

Nonfarm payroll employment fell sharply in January (-598,000) and the unemployment rate rose from 7.2 to 7.6 percent. Payroll employment has declined by 3.6 million since December 2007; about one-half of this decline occurred in the past three months. In January, job losses were large and widespread.

Producer Price Index for Finished Goods rose 0.8 percent in January, seasonally adjusted. This increase followed declines of 1.9 percent in December and 2.5 percent in November. The index for finished goods less foods and energy increased 0.4 percent following a 0.2-percent rise a month earlier.

Productivity rose 3.2 percent in the nonfarm business sector in fourth-quarter 2008, as hours fell faster than output. Unit labor costs increased 1.8 percent. Manufacturing output per hour fell 3.0 percent; unit labor costs increased 13.3 percent. All rates are seasonally adjusted annual rates.

Real average weekly earnings rose by 0.6 percent in December 2008. A 0.3 percent increase in average hourly earnings and a 0.9 percent decrease in the CPI for Urban Wage Earners and Clerical Workers were partially offset by a 0.6 percent decrease in average weekly hours. Over the year, real earnings increased 2.9 percent.