Transmission of material in this release is embargoed until USDL 25-0926
8:30 a.m. (ET) Thursday, June 5, 2025
Technical information: (202) 691-5606 • Productivity@bls.gov • www.bls.gov/productivity
Media contact: (202) 691-5902 • PressOffice@bls.gov
Productivity and Costs
First Quarter 2025, Revised
Nonfarm business sector labor productivity decreased 1.5 percent in the first quarter of 2025, the U.S.
Bureau of Labor Statistics reported today, as output decreased 0.2 percent and hours worked increased
1.3 percent. (All quarterly percent changes in this release are seasonally adjusted annualized rates.) This
is the first decline in nonfarm business sector labor productivity since the second quarter of 2022. From
the same quarter a year ago, nonfarm business sector labor productivity increased 1.3 percent in the first
quarter of 2025. (See tables A1 and 2.)
Unit labor costs in the nonfarm business sector increased 6.6 percent in the first quarter of 2025,
reflecting a 5.0-percent increase in hourly compensation and a 1.5-percent decrease in productivity. Unit
labor costs increased 1.9 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 1.2 percent in the first
quarter of 2025, and increased 0.5 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 4.4 percent in the first quarter of 2025, as output
increased 4.8 percent and hours worked increased 0.4 percent. This is the largest increase in productivity
since the second quarter of 2021, when the measure increased 5.3 percent. In the durable manufacturing
sector, productivity increased 7.2 percent, reflecting a 7.9-percent increase in output and a 0.6-percent
increase in hours worked. Nondurable manufacturing sector productivity increased 1.7 percent, as output
increased 1.7 percent and hours worked saw no growth. Total manufacturing sector productivity
increased 1.4 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)
Unit labor costs in the total manufacturing sector increased 2.0 percent in the first quarter of 2025,
reflecting a 6.4-percent increase in hourly compensation and a 4.4-percent increase in productivity.
Manufacturing unit labor costs increased 0.3 percent from the same quarter a year ago. (See tables A1
and 3.)
Manufacturing sector labor productivity has grown at an annualized rate of 0.5 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 4.4 percent
increase in labor productivity in the first quarter of 2025 boosted the annualized growth rate for the
current business cycle 0.2 percentage point, from 0.3 percent to 0.5 percent.
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 first-quarter 2025 measures were announced today for the nonfinancial corporate sector.
Productivity decreased 1.2 percent in the first quarter of 2025 as output decreased 0.3 percent and hours
worked increased 0.9 percent. Productivity increased 2.0 percent over the last four quarters. (See tables
A2 and 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.
Table B1 presents previous and revised productivity and related measures for the business, nonfarm
business, and manufacturing sectors for the first quarter of 2025.
In the first quarter of 2025, nonfarm business sector productivity decreased 1.5 percent, a 0.7-
percentage point downward revision from the previously reported decrease of 0.8 percent. Output was
revised up 0.1 percentage point to a decrease of 0.2 percent and hours worked were revised up 0.7
percentage point to an increase of 1.3 percent. Unit labor costs increased 6.6 percent rather than
increasing 5.7 percent as previously reported, reflecting a 0.2-percentage point upward revision to hourly
compensation and a 0.7-percentage point downward revision to labor productivity.
In the manufacturing sector, productivity was revised down in the first quarter of 2025 from a 4.5-
percent increase to a 4.4-percent increase, reflecting a 0.3-percentage point downward revision to output
and a 0.1-percentage point downward revision to hours worked. Manufacturing unit labor costs
increased 2.0 percent rather than the preliminary estimate of 1.6 percent, the combined effect of a 0.2-
percentage point upward revision to hourly compensation and a 0.1-percentage point downward revision
to productivity.
Table B2 shows previous and revised productivity and related measures for the business, nonfarm
business, manufacturing, and nonfinancial corporate sectors for the fourth quarter of 2024.
In the fourth quarter of 2024, labor productivity growth in the nonfarm business sector remained at 1.7
percent, as both output and hours worked were unrevised. Hourly compensation, however, was revised
up from the previously reported increase of 3.7 percent to an increase of 5.5 percent. As a result, unit
labor costs increased 3.8 percent in the fourth quarter of 2024, rather than 2.0 percent as previously
reported.
Labor productivity in the manufacturing sector was revised down 0.2 percentage point to an increase
of 0.1 percent, the result of a 0.1-percentage point downward revision to output, which declined at a 1.4-
percent rate. Hours worked were unrevised, decreasing 1.6 percent in the fourth quarter. Manufacturing
sector unit labor costs had a 1.8-percentage point downward revision, from an increase of 3.8 percent to
an increase of 2.0 percent, resulting from a 1.9-percentage point downward revision to hourly
compensation and a 0.2-percentage point downward revision to productivity.
In the nonfinancial corporate sector, productivity grew 5.9 percent in the fourth quarter of 2024 rather
than 4.9 percent as previously reported, due to a 1.0-percentage point upward revision to output; hours
worked were unrevised.
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/.
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The preliminary Productivity and Costs news release for second-quarter 2025 is scheduled to be
released on Thursday, August 7, 2025, at 8:30 a.m. (ET).
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Table A1. Labor productivity growth and related measures – revised first-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 -1.5 -0.2 1.3 5.0 1.2 6.6
A year ago 1.3 2.2 1.0 3.2 0.5 1.9
Business Previous quarter -1.8 -0.6 1.2 5.1 1.3 7.0
A year ago 1.2 2.2 0.9 3.3 0.5 2.0
Manufacturing Previous quarter 4.4 4.8 0.4 6.4 2.6 2.0
A Year ago 1.4 1.0 -0.4 1.8 -0.9 0.3
Durable Previous quarter 7.2 7.9 0.6 7.2 3.3 0.0
manufacturing A year ago 1.3 0.3 -1.1 1.3 -1.4 0.0
Nondurable Previous quarter 1.7 1.7 0.0 4.9 1.0 3.1
manufacturing A year ago 1.1 1.8 0.6 2.8 0.1 1.7
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Table A2. Labor productivity growth and related measures – preliminary first-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 -1.2 -0.3 0.9 4.3 0.5 5.5
corporate A year ago 2.0 2.8 0.8 3.1 0.4 1.1
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Table B1. 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 -1.5 -0.2 1.3 5.0 1.2 6.6
Previously published -0.8 -0.3 0.6 4.8 1.0 5.7
Business Revised -1.8 -0.6 1.2 5.1 1.3 7.0
Previously published -1.1 -0.6 0.5 4.9 1.1 6.1
Manufacturing Revised 4.4 4.8 0.4 6.4 2.6 2.0
Previously published 4.5 5.1 0.5 6.2 2.4 1.6
Durable Revised 7.2 7.9 0.6 7.2 3.3 0.0
manufacturing Previously published 7.1 7.9 0.8 7.0 3.1 0.0
Nondurable Revised 1.7 1.7 0.0 4.9 1.0 3.1
manufacturing Previously published 2.2 2.3 0.1 4.6 0.8 2.4
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Table B2. Labor productivity growth and related measures – revised and previously published fourth-quarter 2024
(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 1.7 2.5 0.8 5.5 2.4 3.8
Previously published 1.7 2.5 0.8 3.7 0.6 2.0
Business Revised 2.2 2.5 0.3 6.1 2.9 3.8
Previously published 2.2 2.5 0.3 4.3 1.2 2.1
Nonfinancial Revised 5.9 6.4 0.4 6.3 3.1 0.3
corporate Previously published 4.9 5.4 0.4 4.5 1.4 -0.4
Manufacturing Revised 0.1 -1.4 -1.6 2.1 -0.9 2.0
Previously published 0.3 -1.3 -1.6 4.0 1.0 3.8
Durable Revised -1.7 -3.7 -2.0 1.2 -1.8 3.0
manufacturing Previously published -1.7 -3.6 -2.0 4.2 1.1 6.0
Nondurable Revised 1.8 0.9 -0.9 4.0 0.9 2.2
manufacturing Previously published 2.0 1.1 -0.9 3.8 0.7 1.8
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United States Department of Labor
