Transmission of material in this release is embargoed until USDL 26-0365
8:30 a.m. (ET) Thursday, March 5, 2026
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Productivity and Costs
Fourth Quarter and Annual Averages 2025, Preliminary
Nonfarm business sector labor productivity increased 2.8 percent in the fourth quarter of 2025, the
U.S. Bureau of Labor Statistics reported today, as output increased 2.6 percent and hours worked
decreased 0.2 percent. (All quarterly percent changes in this release are seasonally adjusted annualized
rates.) From fourth quarter 2024 to fourth quarter 2025, nonfarm business sector labor productivity
increased 2.8 percent. (See table A1.) Annual average productivity increased 2.2 percent from 2024 to
2025. (See table C1.)
Unit labor costs in the nonfarm business sector increased 2.8 percent in the fourth quarter of 2025,
reflecting a 5.7-percent increase in hourly compensation and a 2.8-percent increase in productivity. Unit
labor costs increased 1.3 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.
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Historical Revisions to Productivity and Costs Data
Data in this release incorporate the annual benchmark revision of BLS Current Employment Statistics
program data on employment and hours of employees on nonfarm payrolls. Data also include revisions
to employment and hours of all other business sector workers that reflect updated seasonal adjustment of
those data by the BLS Major Sector Productivity program. See Revised measures section.
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Real hourly compensation, which takes into account consumer prices, increased 3.1 percent in the fourth
quarter of 2025, and increased 1.3 percent over the last four quarters. The labor share, which is the
percentage of output that accrues to workers in the form of compensation, was 53.8 percent in the fourth
quarter of 2025, the lowest level in the series which begins in the first quarter of 1947.
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 2.2 percent, reflecting a 2.6-percent rate of growth in output and a 0.4-percent rate of
growth in hours worked. The 2.2-percent annualized rate of nonfarm business 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 the same as the long-term rate of 2.2
percent since the first quarter of 1947.
Manufacturing sector labor productivity decreased 1.9 percent in the fourth quarter of 2025, as output
decreased 2.2 percent and hours worked decreased 0.3 percent. In the durable manufacturing sector,
productivity decreased 3.0 percent, reflecting a 2.3-percent decrease in output and a 0.7-percent increase
in hours worked. Nondurable manufacturing sector productivity decreased 0.2 percent, as output
decreased 2.1 percent and hours worked decreased 2.0 percent. Total manufacturing sector productivity
increased 2.3 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)
Unit labor costs in the total manufacturing sector increased 8.3 percent in the fourth quarter of 2025,
reflecting a 6.2-percent increase in hourly compensation and a 1.9-percent decrease in productivity. This
is the largest increase in manufacturing unit labor costs since the third quarter of 2022, when the
measure increased 11.4 percent. 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 0.4 percent during the
current business cycle, as output is unchanged and hours have declined 0.4 percent. The 0.4-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.
Revised measures
Table B1 presents previous and revised productivity and related measures for the business, nonfarm
business, and manufacturing sectors for the third quarter of 2025. Table A2 presents these measures for
the nonfinancial corporate sector.
Quarterly and annual measures of hours worked and related measures—including productivity—were
revised back at least 5 years for all major sectors. The revisions reflect incorporation of revised BLS
Current Employment Statistics (CES) program data for employment and hours of employees on nonfarm
payrolls; the largest revisions were in 2024 and 2025. There were also minor revisions in the business
sectors back to 1990. Revisions to employment and hours worked from 2021 to 2025 in all sectors also
reflect revised seasonal adjustment of hours worked by nonfarm self-employed and unpaid family
workers, all farm workers, and employees of government enterprises. These measures, based on source
data from the BLS Current Population Survey (CPS), are seasonally adjusted by the BLS Major Sector
Productivity program.
Quarterly measures of real hourly compensation in 2025 were revised to reflect updates to seasonally
adjusted data from the BLS Consumer Price Index (CPI) program released on February 13, 2026.
The largest revisions to hours worked and labor productivity were in 2024 and 2025. Hours worked
were revised down in each quarter from the second quarter of 2024 to the third quarter of 2025 while
output was unrevised, resulting in upward revisions to labor productivity. The upward revisions to
productivity through the third quarter, combined with the fourth-quarter increase, resulted in an upward
revision in the growth rate for the current business cycle, from 2.0 percent to 2.2 percent.
Nonfarm business sector productivity in the third quarter of 2025 increased 5.2 percent rather than
the previous estimate of a 4.9-percent increase, reflecting a 0.3-percentage point downward revision to
hours worked; output was not revised. Unit labor costs were revised up 0.1 percentage point to a
decrease of 1.8 percent.
Manufacturing sector productivity was revised down 0.1 percentage point to an increase of 3.6
percent in the third quarter of 2025, reflecting a 0.1-percentage point downward revision to output and
a 0.1-percentage point upward revision to hours worked. Productivity was revised up 0.4 percentage
point to an increase of 5.8 percent in the durable manufacturing sector and revised down 0.8 percentage
point to an increase of 0.5 percent in the nondurable manufacturing sector. (See table B1.)
In the nonfinancial corporate sector, productivity was revised up 0.1 percentage point in the third
quarter of 2025 to an increase of 3.4 percent, as output increased 4.0 percent and hours worked
increased 0.6 percent. This revision reflects a 0.1-percentage point downward revision to hours worked;
output was not revised. Unit labor costs were the same as the preliminary estimate, increasing 0.3
percent in the third quarter of 2025. Unit profits of nonfinancial corporations were the same as the
preliminary estimate, increasing 7.8 percent in the third quarter of 2025 and were unchanged over the
last four quarters. (See tables A2 and 6.)
Annual averages
Table C1 presents annual average changes for the most recent 5 years for the nonfarm business sector
and the total manufacturing sector. Nonfarm business sector productivity increased 2.2 percent in
2025, as output increased 2.6 percent and hours worked increased 0.4 percent. Productivity was revised
up by 0.2 percentage point in 2024, to an increase of 3.0 percent.
Unit labor costs in the nonfarm business sector increased 1.9 percent in 2025, reflecting an increase of
4.1 percent in hourly compensation and an increase of 2.2 percent in productivity. Real hourly
compensation, which takes into account changes in consumer prices, increased 1.4 percent in 2025.
In the manufacturing sector, productivity increased 2.0 percent in 2025, reflecting an increase in
output of 1.1 percent and a decrease in hours worked of 0.9 percent. The 2.0 percent increase in 2025 is
the largest annual increase in manufacturing productivity since 2010, when the measure increased 6.3
percent.
Manufacturing unit labor costs increased 2.3 percent in 2025, as hourly compensation increased 4.3
percent and productivity increased 2.0 percent. The increase in manufacturing unit labor costs was lower
than increases in the previous 3 years, each of which exceeded 4.0 percent. Manufacturing real hourly
compensation increased 1.6 percent in 2025.
Quarterly and annual data for all sectors for recent years appear in tables 1-6. Full historical annual and
quarterly measures, including percent changes, indexes, and levels, can be found in the file located at
www.bls.gov/productivity/tables/labor-productivity-major-sectors.xlsx.
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The revised Productivity and Costs news release for fourth-quarter and annual averages 2025 is
scheduled to be released on Tuesday, March 24, 2026, at 8:30 a.m. (ET).
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Federal Government Shutdown
Publication of this Productivity and Costs Fourth Quarter and Annual Averages 2025, Preliminary
release was delayed due to a lapse in appropriations. Productivity data is not collected directly; rather,
it is calculated using source data from other BLS programs and government agencies. Once all
required source data became available, data presented in this release were produced.
Subsequent data releases may also be delayed. Revised release dates will be posted at
www.bls.gov/bls/2025-lapse-revised-release-dates.htm as they become available.
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Table A1. Labor productivity growth and related measures – preliminary fourth-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
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Nonfarm business Previous quarter 2.8 2.6 -0.2 5.7 3.1 2.8
A year ago 2.8 3.0 0.2 4.1 1.3 1.3
Business Previous quarter 2.8 2.7 -0.1 5.6 3.0 2.7
A year ago 2.8 3.0 0.2 4.1 1.4 1.3
Manufacturing Previous quarter -1.9 -2.2 -0.3 6.2 3.6 8.3
A Year ago 2.3 1.8 -0.5 5.0 2.2 2.6
Durable Previous quarter -3.0 -2.3 0.7 5.9 3.3 9.1
manufacturing A year ago 3.6 3.4 -0.3 5.4 2.6 1.7
Nondurable Previous quarter -0.2 -2.1 -2.0 6.5 3.9 6.7
manufacturing A year ago 1.0 0.2 -0.8 4.1 1.3 3.0
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Table A2. Labor productivity growth and related measures – revised and previously published third-quarter 2025
(percent change from previous quarter at annual rate)
Labor Hours Hourly Real hourly Unit labor
Sector productivity Output worked compensation compensation costs
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Nonfinancial Revised 3.4 4.0 0.6 3.7 0.6 0.3
corporate Previously published 3.3 4.0 0.7 3.6 0.5 0.3
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Table B1. Labor productivity growth and related measures – revised and previously published third-quarter 2025
(percent change from previous quarter at annual rate)
Labor Hours Hourly Real hourly Unit labor
Sector productivity Output worked compensation compensation costs
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Nonfarm business Revised 5.2 5.4 0.2 3.3 0.2 -1.8
Previously published 4.9 5.4 0.5 2.9 -0.2 -1.9
Business Revised 5.2 5.5 0.3 3.2 0.1 -1.9
Previously published 5.0 5.5 0.5 2.9 -0.3 -2.1
Manufacturing Revised 3.6 2.9 -0.6 4.8 1.6 1.2
Previously published 3.7 3.0 -0.7 4.8 1.6 1.1
Durable Revised 5.8 3.8 -1.9 5.6 2.4 -0.2
manufacturing Previously published 5.4 3.6 -1.7 5.4 2.2 0.0
Nondurable Revised 0.5 1.9 1.4 3.5 0.4 3.1
manufacturing Previously published 1.3 2.3 1.0 4.0 0.9 2.7
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Table C1. Labor productivity growth and related measures – annual average changes: 2021-2025
Labor Hours Hourly Real hourly Unit labor
Sector Year productivity Output worked compensation compensation costs
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Nonfarm business 2025 2.2 2.6 0.4 4.1 1.4 1.9
2024 3.0 2.9 0.0 5.5 2.5 2.4
2023 2.0 3.1 1.1 4.0 -0.1 2.0
2022 -1.5 2.5 4.0 3.6 -4.2 5.2
2021 2.1 7.6 5.4 5.0 0.2 2.9
Manufacturing 2025 2.0 1.1 -0.9 4.3 1.6 2.3
2024 0.3 -0.9 -1.2 5.0 2.0 4.7
2023 -0.4 -0.4 0.0 4.1 0.0 4.5
2022 -2.1 1.9 4.1 2.7 -5.0 4.9
2021 1.7 5.0 3.2 2.3 -2.4 0.6
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United States Department of Labor
