Transmission of material in this release is embargoed until USDL 25-1343
8:30 a.m. (ET) Thursday, September 4, 2025
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Productivity and Costs
Second Quarter 2025, Revised
Nonfarm business sector labor productivity increased 3.3 percent in the second quarter of 2025, the
U.S. Bureau of Labor Statistics reported today, as output increased 4.4 percent and hours worked
increased 1.1 percent. (All quarterly percent changes in this release are seasonally adjusted annualized
rates.) From the same quarter a year ago, nonfarm business sector labor productivity increased 1.5
percent in the second quarter of 2025. (See tables A1 and 2.)
Unit labor costs in the nonfarm business sector increased 1.0 percent in the second quarter of 2025,
reflecting a 4.3-percent increase in hourly compensation and a 3.3-percent increase in productivity. Unit
labor costs increased 2.5 percent over the last four quarters. (See tables A1 and 2.)
BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in
hourly compensation tend to increase unit labor costs and increases in productivity tend to reduce them.
Real hourly compensation, which takes into account consumer prices, increased 2.6 percent in the
second quarter of 2025, and increased 1.5 percent over the last four quarters.
Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of
hours worked by all workers, including employees, proprietors, and unpaid family workers. During the
current business cycle, starting in the fourth quarter of 2019, labor productivity has grown at an
annualized rate of 1.8 percent, reflecting a 2.4-percent rate of growth in output and a 0.6-percent rate of
growth in hours worked. The 1.8-percent annualized rate of productivity growth in the current business
cycle thus far is higher than the 1.5-percent rate of the previous business cycle from the fourth quarter of
2007 through the fourth quarter of 2019, and is below the long-term rate of 2.1 percent since the first
quarter of 1947.
Manufacturing sector labor productivity increased 2.5 percent in the second quarter of 2025, as
output increased 2.4 percent and hours worked decreased 0.1 percent. In the durable manufacturing
sector, productivity increased 3.2 percent, reflecting a 3.5-percent increase in output and a 0.3-percent
increase in hours worked. Nondurable manufacturing sector productivity increased 1.9 percent, as output
increased 1.3 percent and hours worked decreased 0.6 percent. Total manufacturing sector productivity
increased 1.6 percent from the same quarter a year ago. This is the largest four-quarter gain in
manufacturing productivity since the second quarter of 2021, when it increased 4.8 percent. (See tables
A1, 3, 4, and 5.)
Unit labor costs in the total manufacturing sector increased 2.0 percent in the second quarter of 2025,
reflecting a 4.5-percent increase in hourly compensation and a 2.5-percent increase in productivity. Unit
labor costs increased 0.9 percent in the durable goods sector and increased 3.1 percent in nondurable
goods industries. Manufacturing unit labor costs increased 2.6 percent from the same quarter a year ago.
(See tables A1 and 3.)
Manufacturing sector labor productivity has grown at an annualized rate of 0.5 percent during the
current business cycle, as output has increased 0.2 percent and hours have declined 0.3 percent. The 0.5-
percent annualized rate of productivity growth in the current business cycle thus far is above the 0.1-
percent rate of the previous business cycle from the fourth quarter of 2007 through the fourth quarter of
2019 and is below the long-term rate of 2.1 percent since the first quarter of 1987.
The concepts, sources, and methods used for the manufacturing output series differ from those used in
the business and nonfarm business output series; these output measures are not directly comparable. See
the Technical Notes for a more detailed explanation.
Preliminary measures for the second quarter of 2025 were announced today for the nonfinancial
corporate sector. Productivity increased 5.7 percent in the second quarter of 2025 as output increased
7.0 percent and hours worked increased 1.2 percent. Productivity increased 3.4 percent over the last four
quarters. Unit profits of nonfinancial corporations increased at a 1.9-percent annual rate in the second
quarter of 2025 and decreased 1.6 percent over the last four quarters. (See table 6.)
Revised measures
Measures released today are based on more recent source data than were available for the preliminary
report; they reflect regular updates of source data from the BLS, the Bureau of Economic Analysis
(BEA), and the Board of Governors of the Federal Reserve System. These measures do not reflect labor
data to be released September 5, 2025, by the BLS Current Employment Statistics program.
Table B1 presents previous and revised productivity and related measures for the business, nonfarm
business, and manufacturing sectors for the second quarter of 2025.
In the second quarter of 2025, nonfarm business sector productivity increased 3.3 percent--a 0.9-
percentage point upward revision from the preliminary estimate of a 2.4-percent increase--reflecting a
0.7-percentage point upward revision to output and a 0.2-percentage point downward revision to hours
worked. From the same quarter a year ago, nonfarm business sector labor productivity was revised up by
0.2 percentage point, to an increase of 1.5 percent. Unit labor costs increased 1.0 percent in the second
quarter of 2025 rather than increasing 1.6 percent as previously reported, reflecting a 0.3-percentage
point upward revision to hourly compensation and a 0.9-percentage point upward revision to
productivity.
Manufacturing sector productivity for the second quarter of 2025 was revised up to an increase of 2.5
percent from a previously reported increase of 2.1 percent, reflecting a 0.1-percentage point upward
revision to output and a 0.4-percentage point downward revision to hours worked. Durable
manufacturing sector productivity was revised down 0.1 percentage point to an increase of 3.2 percent;
nondurable manufacturing sector productivity had a 0.7-percentage point upward revision to an increase
of 1.9 percent. Total manufacturing unit labor costs increased 2.0 percent in the second quarter of 2025,
reflecting a 0.3-percentage point upward revision.
Table B2 presents previous and revised productivity and related measures for the business, nonfarm
business, manufacturing, and nonfinancial corporate sectors for the first quarter of 2024.
In the first quarter of 2025, nonfarm business sector productivity and unit labor costs were not revised.
Manufacturing sector productivity was revised down 0.2 percentage point to an increase of 3.1 percent.
As a result, unit labor costs were revised up 0.2 percentage point to an increase of 3.1 percent. In the
nonfinancial corporate sector, first-quarter 2025 productivity declined 0.2 percent, as previously
reported. Unit labor costs and unit profits in the nonfinancial corporate sector were not revised. (See
table 6.)
Quarterly and annual data for all sectors from 2023 forward appear in tables 1-6. Full historical
measures can be found on the Productivity and Costs home page: www.bls.gov/productivity/tables/.
______________
The preliminary Productivity and Costs news release for third-quarter 2025 is scheduled to be
released on Thursday, November 6, 2025, at 8:30 a.m. (ET).
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Table A1. Labor productivity growth and related measures – revised second-quarter 2025
(percent change from previous quarter at annual rate and from same quarter a year ago)
Labor Hours Hourly Real hourly Unit labor
Sector Percent change from: productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business Previous quarter 3.3 4.4 1.1 4.3 2.6 1.0
A year ago 1.5 2.5 1.0 4.0 1.5 2.5
Business Previous quarter 3.6 4.4 0.7 4.6 2.9 1.0
A year ago 1.5 2.3 0.8 4.2 1.7 2.6
Manufacturing Previous quarter 2.5 2.4 -0.1 4.5 2.8 2.0
A Year ago 1.6 0.9 -0.7 4.3 1.7 2.6
Durable Previous quarter 3.2 3.5 0.3 4.1 2.5 0.9
manufacturing A year ago 2.1 0.9 -1.2 4.6 2.1 2.5
Nondurable Previous quarter 1.9 1.3 -0.6 5.1 3.4 3.1
manufacturing A year ago 0.8 1.0 0.2 3.7 1.2 2.9
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Table A2. Labor productivity growth and related measures – preliminary second-quarter 2025
(percent change from previous quarter at annual rate and from same quarter a year ago)
Labor Hours Hourly Real hourly Unit labor
Sector Percent change from: productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial Previous quarter 5.7 7.0 1.2 3.5 1.8 -2.1
corporate A year ago 3.4 4.2 0.7 3.8 1.3 0.4
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Table B1. Labor productivity growth and related measures – revised and previously published second-quarter 2025
(percent change from previous quarter at annual rate)
Labor Hours Hourly Real hourly Unit labor
Sector productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business Revised 3.3 4.4 1.1 4.3 2.6 1.0
Previously published 2.4 3.7 1.3 4.0 2.3 1.6
Business Revised 3.6 4.4 0.7 4.6 2.9 1.0
Previously published 2.8 3.8 1.0 4.3 2.6 1.5
Manufacturing Revised 2.5 2.4 -0.1 4.5 2.8 2.0
Previously published 2.1 2.3 0.3 3.8 2.1 1.7
Durable Revised 3.2 3.5 0.3 4.1 2.5 0.9
manufacturing Previously published 3.3 4.1 0.8 3.0 1.4 -0.2
Nondurable Revised 1.9 1.3 -0.6 5.1 3.4 3.1
manufacturing Previously published 1.2 0.5 -0.7 5.1 3.4 3.8
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Table B2. Labor productivity growth and related measures – revised and previously published first-quarter 2025
(percent change from previous quarter at annual rate)
Labor Hours Hourly Real hourly Unit labor
Sector productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business Revised -1.8 -0.6 1.2 5.0 1.2 6.9
Previously published -1.8 -0.6 1.2 5.0 1.2 6.9
Business Revised -2.0 -0.9 1.1 5.1 1.3 7.3
Previously published -2.0 -0.9 1.1 5.1 1.3 7.3
Nonfinancial Revised -0.2 0.6 0.8 4.3 0.5 4.6
corporate Previously published -0.2 0.6 0.8 4.3 0.5 4.6
Manufacturing Revised 3.1 3.5 0.4 6.3 2.4 3.1
Previously published 3.3 3.7 0.4 6.3 2.4 2.9
Durable Revised 6.6 7.2 0.6 7.1 3.2 0.5
manufacturing Previously published 6.8 7.5 0.6 7.1 3.2 0.2
Nondurable Revised -0.2 -0.2 0.0 4.8 1.0 5.0
manufacturing Previously published 0.0 0.0 0.0 4.8 1.0 4.8
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United States Department of Labor
