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Technical information: (202) 691-5606 • Productivity@bls.gov • www.bls.gov/productivity
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PRODUCTIVITY AND COSTS
Third Quarter 2025, Preliminary
Nonfarm business sector labor productivity increased 4.9 percent in the third quarter of 2025, the
U.S. Bureau of Labor Statistics reported today, as output increased 5.4 percent and hours worked
increased 0.5 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 1.9
percent in the third quarter of 2025. (See tables A1 and 2.)
Unit labor costs in the nonfarm business sector decreased 1.9 percent in the third quarter of 2025,
reflecting a 2.9-percent increase in hourly compensation and a 4.9-percent increase in productivity. Unit
labor costs increased 1.2 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, decreased 0.2 percent in the third
quarter of 2025, and increased 0.3 percent over the last four quarters.
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Historical Revisions
Data in this release reflect the 2025 annual update of the National Income and Product Accounts (NIPA)
released by the Bureau of Economic Analysis of the U.S. Department of Commerce on September 25,
2025. See “Revised measures” section.
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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 2.0 percent, reflecting a 2.6-percent rate of growth in output and a 0.6-percent rate of
growth in hours worked.
The 2.0-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 is just below the long-term rate of 2.1 percent since the first
quarter of 1947.
Manufacturing sector labor productivity increased 3.3 percent in the third quarter of 2025, as output
increased 2.6 percent and hours worked decreased 0.7 percent. In the durable manufacturing sector,
productivity increased 4.7 percent, reflecting a 3.0-percent increase in output and a 1.7-percent decrease
in hours worked. Nondurable manufacturing sector productivity increased 1.2 percent, as output
increased 2.1 percent and hours worked increased 1.0 percent. Total manufacturing sector productivity
increased 2.3 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 4.9 percent. (See tables
A1, 3, 4, and 5.)
Unit labor costs in the total manufacturing sector increased 1.5 percent in the third quarter of 2025,
reflecting a 4.8-percent increase in hourly compensation and a 3.3-percent increase in productivity. Unit
labor costs increased 0.6 percent in the durable goods sector and increased 2.8 percent in nondurable
goods industries. Manufacturing unit labor costs increased 1.3 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 has increased 0.1 percent and hours have declined 0.3 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.
Nonfinancial corporate sector labor productivity increased 3.0 percent in the third quarter of 2025, as
output increased 3.7 percent and hours worked increased 0.7 percent. Productivity increased 2.8 percent
over the last four quarters. Unit labor costs in the nonfinancial corporate sector increased 0.6 percent in
the third quarter of 2025, reflecting a 3.6-percent increase in hourly compensation and a 3.0-percent
increase in productivity. Unit labor costs increased 1.3 percent over the last four quarters. Unit profits of
nonfinancial corporations increased 6.6 percent in the third quarter of 2025 and decreased 0.3 percent
over the last four quarters. (See tables A2 and 6.)
Revised measures
Measures of output for the business, nonfarm business, and nonfinancial corporate sectors, and measures
of compensation for all sectors, incorporate the 2025 Annual Update of the National Income and Product
Accounts (NIPA) data released on September 25, 2025, by the Bureau of Economic Analysis (BEA),
U.S. Department of Commerce. As a result, all measures incorporating output, including labor
productivity and unit labor costs, were revised back to 2020 for the business, nonfarm business, and
nonfinancial corporate sectors. Quarterly and annual measures incorporating compensation were subject
to revision back to 2018 for the business and nonfarm business sectors, and back to 2020 for the
nonfinancial corporate and manufacturing sectors. Updated source data on output and compensation
released by BEA on December 23, 2025, are reflected in revisions to data for the second quarter of
2025.
Hours worked and related measures for the business and nonfarm business sectors were subject to
revision back to 2018 due to revised NIPA data on government enterprises employment and on the
proportion of industry compensation paid to employees of nonprofit institutions; the proportion of
industry compensation paid is used as an approximation of the proportion of hours worked by those
employees, which are removed from nonfarm business hours worked. Hours worked and related
measures for the nonfinancial corporate sector were subject to revision back to 2006, with notable
revisions only back to 2019 due to the incorporation of revised NIPA data on the proportion of industry
compensation paid to employees of corporations, used in the estimation of hours worked for
nonfinancial corporations.
Measures of output for the total, durable, and nondurable manufacturing sectors incorporate revised
annual benchmark data from 1987 to 2022 released December 19 by BLS. Manufacturing output also
reflects the 2025 Historical and Annual Revision to the indexes of industrial production (IP) published
November 24, and the update to those indexes published December 23, by the Board of Governors of
the Federal Reserve System.
There were revisions to quarterly growth rates of nonfarm business labor productivity during the current
business cycle, starting in the fourth quarter of 2019. The largest negative and positive revisions
occurred consecutively in the first and second quarters of 2024, with a downward revision of 1.1
percentage point and an upward revision of 0.9 percentage point, respectively. There were no revisions
prior to the first quarter of 2020 in this measure.
The overall effect of these quarterly revisions over the period from the fourth quarter of 2019 to the
second quarter of 2025 was to raise the annualized productivity growth rate by 0.1 percentage point,
from 1.8 percent to 1.9 percent. These revisions are also reflected in the 0.2-percentage point upward
revision to the nonfarm business labor productivity growth rate during the current business cycle (which
now goes through the third quarter of 2025), from a previously published rate of 1.8 percent to a revised
rate of 2.0 percent. This business cycle rate is higher than the previously published estimate due to both
the historical revisions as well as the high rate of growth in the third quarter.
Table B1 presents revised and previous labor productivity and related measures for the nonfarm
business, business, and manufacturing sectors for the third quarter of 2025. Table A2 presents these
measures for the nonfinancial corporate sector.
Nonfarm business sector productivity in the second quarter of 2025 increased 4.1 percent--a 0.8-
percentage point upward revision from the preliminary estimate of a 3.3-percent increase--reflecting a
0.8-percentage point upward revision to output and a 0.1-percentage point downward revision to hours
worked. The four-quarter change from second-quarter 2024 to second-quarter 2025 in nonfarm business
sector labor productivity was unrevised at 1.5 percent, as both output and hours worked were revised
down by 0.1 percentage point. Unit labor costs decreased 2.9 percent in the second quarter of 2025
rather than increasing 1.0 percent as previously reported, reflecting a 3.2-percentage point downward
revision to hourly compensation and a 0.8-percentage point upward revision to productivity.
Manufacturing sector productivity for the second quarter of 2025 was revised up to an increase of 2.9
percent from a previously reported increase of 2.5 percent, reflecting a 0.5-percentage point upward
revision to output and a 0.1-percentage point upward revision to hours worked. Durable manufacturing
sector productivity was revised up 1.1 percentage point to an increase of 4.3 percent; nondurable
manufacturing sector productivity was revised down 0.3 percentage point to an increase of 1.6 percent.
Total manufacturing unit labor costs was revised down 0.9 percentage point to an increase of 1.1 percent
in the second quarter of 2025.
Nonfinancial corporate sector productivity increased 4.6 percent in the second quarter of 2025, rather
than the previously published estimate of a 5.7-percent increase. This revision results from a 1.2-
percentage point downward revision to output and a 0.1-percentage point downward revision to hours
worked. Unit labor costs in the nonfinancial corporate sector were revised down 0.6 percentage point to
a decrease of 2.7 percent in the second quarter of 2025, as hourly compensation was revised down 1.7
percentage points and productivity was revised down 1.1 percentage points. (See table B1.) Historical
revisions to output and hours in the nonfinancial corporate sector resulted in a 0.5-percentage point
downward revision to the annualized labor productivity growth rate during the current business cycle to
2.1 percent, slightly below the long-term rate of 2.3 percent since the start of 1947.
Annual averages
Table C1 presents annual data for the nonfarm business, total manufacturing, and nonfinancial corporate
sectors from 2022 to 2024. Annual percent changes compare annual indexes from one year to the next.
In the nonfarm business sector, annual average productivity increased 2.8 percent in 2024, and annual
average unit labor costs increased 2.4 percent, both as previously published. Productivity was revised up
0.2 percentage point to a 2.0-percent increase in 2023, due to a 0.2-percentage point upward revision to
output. Unit labor costs were revised down 0.2 percentage point in 2023 and also increased 2.0 percent.
(See table C1.)
Annual average manufacturing sector productivity was revised down 0.5 percentage point in 2024, to an
increase of 0.1 percent, due to a downward revision to output; hours worked were unrevised. The
downward revision to productivity combined with a 0.9-percentage point upward revision to hourly
compensation to yield a 1.5-percentage point upward revision to unit labor costs, to an increase of 4.7
percent in 2024. In 2023, labor productivity was unrevised, but a 0.6-percentage point downward
revision in hourly compensation led to a similar downward revision to manufacturing unit labor costs,
which increased 4.5 percent. Manufacturing output and productivity were both revised down 0.8-
percentage point in 2022, resulting in an output increase of 1.9 percent and a productivity decrease of
2.1 percent. The downward revision to productivity was partially offset by a 0.5-percent downward
revision to hourly compensation, and unit labor costs were revised up 0.3 percentage point, to an
increase of 4.9 percent. (See table C1.)
In the nonfinancial corporate sector, productivity was revised down 1.7 percentage points to a 2.6
percent increase in 2024. This stemmed from a 1.8-percentage point downward revision to output; hours
worked were unrevised. Unit labor costs were revised up 1.3 percentage point to an increase of 2.6
percent, reflecting a 0.3-percentage point downward revision to hourly compensation and the 1.7
percentage point downward revision to productivity. Nonfinancial corporate sector labor productivity
was revised up by 0.3 percentage point in 2023 and was revised down by 0.4 percentage point in 2022,
reflecting similar revisions to output, as hours worked were unrevised. (See tables C1 and 6.)
Quarterly and annual data for all sectors for recent years appear in tables 1-6. Full historical annual and
quarterly measures can be found at www.bls.gov/productivity/tables/.
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The revised Productivity and Costs news release for third-quarter 2025 is scheduled to be released
on Thursday, January 29, 2026, at 8:30 a.m. (ET).
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Federal Government Shutdown
Publication of this Productivity and Costs Third Quarter 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 third-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 4.9 5.4 0.5 2.9 -0.2 -1.9
A year ago 1.9 2.8 0.9 3.2 0.3 1.2
Business Previous quarter 5.0 5.5 0.5 2.9 -0.3 -2.0
A year ago 2.1 2.8 0.6 3.4 0.5 1.3
Manufacturing Previous quarter 3.3 2.6 -0.7 4.8 1.6 1.5
A Year ago 2.3 1.8 -0.5 3.6 0.6 1.3
Durable Previous quarter 4.7 3.0 -1.7 5.4 2.2 0.6
manufacturing A year ago 3.3 2.6 -0.7 4.3 1.3 1.0
Nondurable Previous quarter 1.2 2.1 1.0 4.0 0.9 2.8
manufacturing A year ago 1.1 0.9 -0.1 2.3 -0.6 1.2
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Table A2. Labor productivity growth and related measures – preliminary third-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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Nonfinancial Previous quarter 3.0 3.7 0.7 3.6 0.5 0.6
corporate A year ago 2.8 3.6 0.8 4.2 1.2 1.3
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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
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Nonfarm Business Revised 4.1 5.2 1.0 1.1 -0.5 -2.9
Previously published 3.3 4.4 1.1 4.3 2.6 1.0
Business Revised 4.4 5.1 0.7 1.4 -0.2 -2.9
Previously published 3.6 4.4 0.7 4.6 2.9 1.0
Manufacturing Revised 2.9 2.9 0.0 4.0 2.3 1.1
Previously published 2.5 2.4 -0.1 4.5 2.8 2.0
Durable Revised 4.3 4.7 0.3 4.6 2.9 0.3
manufacturing Previously published 3.2 3.5 0.3 4.1 2.5 0.9
Nondurable Revised 1.6 0.9 -0.7 2.8 1.1 1.2
manufacturing Previously published 1.9 1.3 -0.6 5.1 3.4 3.1
Nonfinancial Revised 4.6 5.8 1.1 1.8 0.2 -2.7
corporate Previously published 5.7 7.0 1.2 3.5 1.8 -2.1
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Table C1. Labor productivity growth and related measures – revised and previous annual average changes: 2022-2024
Labor Hours Hourly Real hourly Unit labor
Sector Year productivity Output worked compensation compensation costs
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Nonfarm 2024 Revised 2.8 2.9 0.1 5.3 2.2 2.4
business Previously published 2.8 2.9 0.1 5.3 2.3 2.4
2023 Revised 2.0 3.1 1.1 4.1 -0.1 2.0
Previously published 1.8 2.9 1.1 4.1 0.0 2.2
2022 Revised -1.5 2.5 4.1 3.6 -4.2 5.2
Previously published -1.5 2.5 4.1 3.5 -4.2 5.1
Nonfinancial 2024 Revised 2.6 2.7 0.2 5.3 2.3 2.6
corporate Previously published 4.3 4.5 0.2 5.6 2.6 1.3
2023 Revised 0.5 1.8 1.3 4.2 0.1 3.7
Previously published 0.2 1.5 1.3 4.3 0.1 4.1
2022 Revised -0.5 3.7 4.2 4.1 -3.7 4.6
Previously published -0.1 4.1 4.2 4.1 -3.7 4.1
Manufacturing 2024 Revised 0.1 -0.9 -1.0 4.7 1.7 4.7
Previously published 0.6 -0.4 -1.0 3.8 0.8 3.2
2023 Revised -0.4 -0.4 0.0 4.1 0.0 4.5
Previously published -0.4 -0.4 0.0 4.7 0.6 5.1
2022 Revised -2.1 1.9 4.1 2.7 -5.0 4.9
Previously published -1.3 2.7 4.1 3.2 -4.5 4.6
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United States Department of Labor
