Productivity and Costs by Industry: Selected Service-Providing Industries News Release

For release 10:00 a.m. (ET) Wednesday, August 26, 2026                                            USDL-26-1421

Technical information:  (202) 691-5606  •  productivity@bls.gov  •  www.bls.gov/productivity 
Media contact:          (202) 691-5902  •  PressOffice@bls.gov


                                      PRODUCTIVITY AND COSTS BY INDUSTRY
                                  SELECTED SERVICE-PROVIDING INDUSTRIES - 2025                                  


Labor productivity rose in 15 of 30 selected service-providing industries in 2025, the U.S. Bureau of Labor 
Statistics reported today. Output rose in 18 industries in 2025 while hours worked increased in the same 
number of industries. Productivity ranged from a 10.8-percent decline in wired telecommunications carriers 
to a 12.9-percent gain in software publishers. Unit labor costs increased in 24 of 30 selected industries in 
2025. Couriers and messengers had the highest increase in unit labor costs (+12.2 percent).

The ten largest industries by number of workers represent 81.4 percent of all workers in the selected 
service-providing industries covered by this news release. Among these ten industries, productivity growth 
was greatest in software publishers (+12.9 percent) after rising 4.0 percent in 2024. Couriers and 
messengers posted the steepest productivity decline - falling 8.5 percent in 2025.

Labor Productivity Rose in Half of Selected Service-Providing Industries in 2025

 • Seven industries had simultaneous growth in output and declines in hours worked. 
 • Productivity exceeded 8.0-percent growth in three industries: software publishers (+12.9 percent), 
   line-haul railroads (+11.3 percent), and wireless telecommunications carriers (+8.8 percent). Output 
   increased in all three industries while hours worked decreased. 
 • The largest drop in productivity occurred in wired telecommunications carriers (-10.8 percent) with 
   a loss in output (-8.3 percent) and a gain in hours worked (+2.8 percent).
 • Productivity in amusement parks and arcades dipped 2.3 percent in 2025 following the largest decline 
   among measured services industries in 2024.
 • Cable and other subscription programming, gambling industries, and air transportation posted the largest 
   increases in hours worked. Productivity increased in gambling industries, where output increased 11.2 
   percent offsetting an 8.3 percent rise in hours worked.

Unit Labor Costs Rose in 24 of 30 Selected Service-Providing Industries in 2025

Unit labor costs reflect the total labor costs required to produce a unit of output. Unit labor costs 
increase when hourly compensation growth exceeds productivity growth. Productivity and unit labor costs 
simultaneously increased in nine industries. Hourly compensation growth was greater than productivity 
growth in all nine industries. 
 • Four industries had growth in unit labor costs that exceeded 10.0 percent, led by couriers and 
   messengers (+12.2 percent), cable and other subscription programming (+12.1 percent), periodical 
   publishers (+11.3 percent), and wired telecommunications carriers (+10.6 percent). 
 • The largest declines in unit labor costs were in line-haul railroads (-4.4 percent) and wireless 
   telecommunications carriers (-4.0 percent).
 • Hourly compensation rose in 28 of 30 industries measured.

Recent Business Cycle Trends

Labor productivity increased in 20 of 30 selected service-providing industries from 2019 to 2025. 
(See table 3.) Note that the annual percent changes for periods of more than 1 year are annualized 
average rates of change over the entire period or a compound annual growth rate. 
 • The highest productivity gains from 2019 to 2025 were in travel arrangement and reservation services 
   (+8.3 percent per year) and gambling industries (+8.2 percent). 
 • The largest annual declines in productivity during this period occurred in air transportation 
   (-4.7 percent) and postal service (-4.4 percent).
 • Productivity increased in 22 of 30 industries over the 2007 to 2019 business cycle.

Output increased in 21 of 30 selected service-providing industries from 2019 to 2025. 
 • The highest increases in output during this period were in software publishers (+10.6 percent per 
   year) and gambling (+10.0 percent). 
 • The steepest annual declines in output during this period occurred in newspaper publishers 
   (-7.9 percent) and postal service (-5.0 percent).
 • From 2007 to 2019, output increased in 23 industries.
   
Hours worked decreased in 16 of 30 selected service-providing industries from 2019 to 2025. 
 • The two industries with the largest decreases in hours worked over the 6 years were newspaper publishers 
   (-8.8 percent per year) and periodical publishers (-5.7 percent).
 • The industries with the largest increases in hours worked during this period were warehousing and 
   storage (+6.8 percent) and air transportation (+6.0 percent).  
 • Hours worked increased in 16 industries from 2007 to 2019. 

Long-Term Productivity Trends Upward Through 2025 

Long-term productivity rose in 24 of 30 selected service-providing industries. (See table 2.) Measures 
for most industries begin in 1987.
 • Median long-term productivity growth for all 30 industries was 1.7 percent per year, ranging from a 
   decline of 2.3 percent per year for couriers and messengers to an increase of 10.7 percent in wireless 
   telecommunications carriers.
 • Software publishers had the highest rate of output growth (+16.2 percent) contributing to a 
   9.7-percent annual gain in productivity. 
 • Output increased over the long term in 27 industries while hours worked increased in 18 industries.

Unit Labor Costs Show Widespread Growth in the Long Run

Since 1987, 26 of 30 selected service-providing industries had an increase in unit labor costs while 
hourly compensation went up in every selected industry during that time.
 • The declines in unit labor costs ranged from wireless telecommunications carriers (-7.9 percent per 
   year) to travel arrangement and reservation services (-1.6 percent).
 • Couriers and messengers posted the largest increase in unit labor costs (+5.6 percent). 
 • Median long-term unit labor costs growth was 2.1 percent per year. 
 • Growth in hourly compensation ranged from 2.0 percent per year for wireless telecommunications 
   carriers to 5.5 percent for travel arrangement and reservation services. The median growth rate in 
   hourly compensation for these industries was 3.6 percent.

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*                                                                                                  *
*                                 Discontinued Industry Series                                     *
*                                                                                                  *
* BLS uses data from a variety of sources to calculate productivity and related measures for       *
* industries of the U.S. economy. These sources include data from other BLS programs as well as    *
* data from the Census Bureau, the Bureau of Economic Analysis, and other federal and private      *
* sources. Beginning with this news release, measures of labor productivity, real sectoral output, *
* output per worker, unit labor costs, sectoral output, sectoral output price deflator, hourly     *
* compensation, and labor compensation for some industries have been discontinued due to changes   *
* in source data. This affects the following industries:                                           *
* following industries:                                                                            *
*  • 5412 - Accounting, tax preparation, bookkeeping, and payroll services                         *
*  • 54121 - Accounting, tax preparation, bookkeeping, and payroll services                        *
*  • 541219 - Other accounting services                                                            *
*                                                                                                  *
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Additional Information

The measures in this release incorporate data from the 2022 Economic Census as well as the Census 
Bureau's Annual Integrated Economic Survey, Quarterly Services Survey, Monthly Retail Trade Survey, 
and Nonemployer Statistics. Accordingly, the labor productivity and output series for many industries 
have been revised for 2024 and earlier years. Additionally, the unit labor cost measures incorporate 
preliminary data from the BLS Quarterly Census of Employment and Wages.

More information about the North American Industry Classification System (NAICS) can be found at 
www.census.gov/naics/.

The following NAICS codes are included in Tables 1, 2, and 3 but not counted in the short-term count 
of 30 selected industries because they are duplicate codes or aggregates for which underlying coverage 
is published: 22, 221, 484, 4841, 491, 493, 511, 5111, 515, 5173, 721, 722, and 72251.

Access productivity data at www.bls.gov/productivity/tables/labor-productivity-detailed-industries.xlsx 
for:
 • Additional industries and sectors
 • Detailed data series: indexes of productivity and related measures; rates of change; and levels of 
industry employment, hours worked, sectoral output, and labor compensation

Subscribe to productivity news releases on the BLS website at 
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Technical Note

Labor Productivity: Labor productivity describes the relationship between real output and the labor
hours involved in its production. These measures show the changes from period to period in the
amount of goods and services produced per hour worked. Although the labor productivity measures 
relate output in an industry to hours worked of all persons in that industry, they do not measure 
the specific contribution of labor to growth in output. Rather, they reflect the joint effects of 
many influences, including: changes in technology; capital investment; utilization of capacity, 
energy, and materials; the use of purchased services inputs, including contract employment services; 
the organization of production; the characteristics and effort of the workforce; and managerial skill.

Unit Labor Costs: Unit labor costs represent the cost of labor required to produce one unit of output.
The unit labor cost indexes are computed by dividing an index of nominal industry labor compensation 
by an index of real industry output. Unit labor costs also describe the relationship between 
compensation per hour and real output per hour (labor productivity). Increases in hourly compensation 
increase unit labor costs; increases in labor productivity offset compensation increases and reduce 
unit labor costs.

Output: Real industry output is measured as an annual-weighted index of the changes in the various 
products (in real terms) provided for sale outside the industry. Real industry output is usually 
derived by deflating nominal sales or values of production using BLS price indexes, but for some 
industries it is measured by physical quantities of output. 

Industry output measures are constructed primarily using data from the economic censuses and annual 
surveys of the Census Bureau, U.S. Department of Commerce, together with information on price changes 
from BLS. Other data sources include: the Energy Information Administration, U.S. Department of 
Energy; the Bureau of Transportation Statistics, U.S. Department of Transportation; the Surface 
Transportation Board; the U.S. Postal Service; and the Federal Deposit Insurance Corporation. Data 
from both the Census Bureau's Quarterly Services Survey and Monthly Retail Trade Survey are used to 
construct preliminary output measures for 2024 and 2025 for most industries.

Labor Hours: Labor hours are measured as annual hours worked by all employed persons in an industry. 
This includes hours worked for pay as well as uncompensated work time. Data on industry employment 
and hours come primarily from the BLS Current Employment Statistics (CES) survey and Current 
Population Survey (CPS). CES data on the number of total and production worker jobs held by wage and 
salary workers in nonfarm establishments are supplemented with CPS self-employed and unpaid family 
worker data to estimate industry employment. Hours worked estimates are derived using: CES and CPS 
employment; CES data on the average weekly hours paid of production and nonproduction workers; CPS 
data on hours of self-employed and unpaid family workers; and ratios of hours worked to hours paid 
based on data from both the CPS and the National Compensation Survey (NCS). For some industries, 
employment and hours data are supplemented or further disaggregated using data from the BLS 
Quarterly Census of Employment and Wages (QCEW), the Census Bureau, or other sources. Additional 
sources of employment and hours data for certain service industries include the Association of 
American Railroads, the U.S. Department of Transportation, the Surface Transportation Board, and 
the U.S. Postal Service. Hours worked are estimated separately for different types of workers and 
then are directly aggregated; no adjustments for labor composition are made.

Labor Compensation: Labor compensation, defined as payroll plus supplemental payments, is a measure 
of the cost to the employer of securing the services of labor. Payroll includes salaries, wages, 
commissions, dismissal pay, bonuses, vacation and sick leave pay, and compensation in kind. 
Supplemental payments include both legally required expenditures and payments for voluntary 
programs. The legally required portion consists primarily of federal old age and survivors' 
insurance, unemployment compensation, and workers' compensation. Payments for voluntary programs 
include all programs not specifically required by legislation, such as the employer portion of 
private health insurance and pension plans. Industry compensation measures are constructed primarily 
using data from the BLS QCEW and the economic censuses of the Census Bureau, U.S. Department of 
Commerce. Additional sources of compensation data include the Surface Transportation Board and the 
U.S. Postal Service.

Annual Percent Change: The annual percent change is the change in a series from one year to the next 
as a percent of the series value in the previous year. Over a period of more than one year, the 
annual percent change is the compound annual growth rate in an index series, or an annualized average 
growth rate. Because the change of an index series varies from year to year, the annual percent 
change for a long time period reflects the constant rate that can be applied to each year in a period, 
from the start to the end, that would give the same total result. It is calculated as (Ending 
Value/Starting Value)^(1/Number of Years)-1.