ECONOMIC

TABLE 14.—Changes in prices, costs, and profits per unit of output for nonfinancial corporations,7970 to 1973[Percent change]Item1970to19711971to19721972to1973Percent change per unit of output:PricesEmployee compensation...Compensation per man-hour.Output per man-hourOther costs.3.11.67.25.53.52. 32. 76.80I-.33.63.97.63.7.0Capital consumption allowances.Indirect business taxes lNet interestProfits 2Percent change in output..4.05.0-1.612.63.51. 5-2. 406. 07. 4.0.0.09.97.81 Also includes business transfer payments less subsidies.2 Before taxes and including inventory valuation adjustment.Note.—Detail may not add to totals because of rounding.Sources: Department of Commerce (Bureau of Economic Analysis)and Department of Labor (Bureau of LaborStatistics).The deflator for corporate output rose 3.6 percent from 1972 to 1973 aftera 2.3 percent rise in the preceding year. Rising unit labor costs and profitsplus inventory valuation adjustment account for all of last year's price rise.Nonlabor costs per unit, which make up about 22/2 percent of price, showedlittle overall change; this was essentially the pattern of change from 1971to 1972. The faster rise in unit labor costs last year in comparison with theyear before reflected an acceleration of the rise in compensation per manhourand a somewhat smaller increase in output per man-hour. Profits perunit rose quite sharply for the third straight year, but they still remainedbelow the average level from 1964 through 1968.The 10 percent rise in profits per unit of output and the 8 percent rise inoutput yielded a 19 percent rise in aggregate profits of nonfinancial corporations,the largest since 1959. Profits of domestic financial corporationsrose somewhat faster, and profits originating abroad rose still more. The latterconsist of earnings of foreign branches and affiliates remitted to U.S.parent corporations. Part of the increase in profits originating abroad wasattributable directly to the depreciation of the dollar.The profits mentioned thus far refer to profits inclusive of the inventoryvaluation adjustment (IVA). If this adjustment is excluded, the increase inreported or book profits was considerably greater: 31 percent, rather than19 percent, for nonfinancial corporations. In 1972 the IVA resulted in adownward adjustment of $7 billion in book profits; last year the correspondingdownward adjustment was $17 billion.The IVA has been an integral part of the national income and productaccounts since they were first established. The adjustment is made because71