Second Quarter 2025, Preliminary

Transmission of material in this release is embargoed until                                 USDL 25-1230
8:30 a.m. (ET) Thursday, August 7, 2025

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

                                          Productivity and Costs
                                     Second Quarter 2025, Preliminary

Nonfarm business sector labor productivity increased 2.4 percent in the second quarter of 2025, the 
U.S. Bureau of Labor Statistics reported today, as output increased 3.7 percent and hours worked 
increased 1.3 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 1.3 
percent in the second quarter of 2025. (See tables A1 and 2.)

Unit labor costs in the nonfarm business sector increased 1.6 percent in the second quarter of 2025, 
reflecting a 4.0-percent increase in hourly compensation and a 2.4-percent increase in productivity. Unit 
labor costs increased 2.6 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 2.3 percent in the 
second quarter of 2025, and increased 1.4 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 2.1 percent in the second quarter of 2025, as 
output increased 2.3 percent and hours worked increased 0.3 percent. In the durable manufacturing 
sector, productivity increased 3.3 percent, reflecting a 4.1-percent increase in output and a 0.8-percent 
increase in hours worked. Nondurable manufacturing sector productivity increased 1.2 percent, as output 
increased 0.5 percent and hours worked decreased 0.7 percent. Total manufacturing sector productivity 
increased 1.5 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 1.7 percent in the second quarter of 2025, 
reflecting a 3.8-percent increase in hourly compensation and a 2.1-percent increase in productivity. Unit 
labor costs increased 3.8 percent in the nondurable goods sector and declined 0.2 percent in durable 
goods industries. Manufacturing unit labor costs increased 2.5 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.

Revised measures

Regular updates of source data published in June and July by the BLS and the Bureau of Economic 
Analysis (BEA) are reflected in revised data for all sectors for the first quarter of 2025; labor data 
published by BLS August 1, 2025, have not yet been incorporated. Regular updates of source data 
published in June and July by the Board of Governors of the Federal Reserve System are reflected in 
revised data for the manufacturing sectors for fourth-quarter 2024 and first-quarter 2025. 

Table B1 presents revised and previously published labor productivity and related measures for the 
nonfarm business, business, and manufacturing sectors for the first quarter of 2025. Table A2 presents 
these measures for the nonfinancial corporate sector.

Nonfarm business sector productivity was revised down 0.3 percentage point to a decrease of 1.8 
percent in the first quarter of 2025; output was revised down 0.4 percentage point to a decrease of 0.6 
percent and hours worked were revised down 0.1 percentage point to an increase of 1.2 percent. (See 
table B1.) The downward revision to productivity translated to a 0.3-percentage point upward revision to 
first-quarter unit labor costs, to a rate of 6.9 percent; hourly compensation was not revised.

Manufacturing sector productivity was revised down 1.1 percentage points to an increase of 3.3 
percent in the first quarter of 2025, reflecting a 1.1-percentage point downward revision to output; 
hours worked were not revised. Productivity was revised down 0.4 percentage point to an increase of 6.8 
percent in the durable manufacturing subsector, and the preliminary estimate of a 1.7-percent increase in 
nondurable manufacturing was revised down 1.7 percentage points to no change. In the first quarter of 
2025, total manufacturing unit labor costs were revised up 0.9 percentage point to an increase of 2.9 
percent, primarily reflecting the 1.1-percentage point downward revision to productivity; hourly 
compensation was revised down 0.1 percentage point. (See tables B1 and 3.)  

Nonfinancial corporate sector productivity was revised up 1.0 percentage point to a decrease of 0.2 
percent in the first quarter of 2025, reflecting a 0.9-percentage point upward 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 0.9 percentage point to an increase of 4.6 percent. (See table A2 and 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 revised Productivity and Costs news release for second-quarter 2025 is scheduled to be 
released on Thursday, September 4, 2025, at 8:30 a.m. (ET).





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Table A1. 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
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business        Previous quarter             2.4         3.7      1.3         4.0            2.3         1.6
                        A year ago                   1.3         2.3      1.0         3.9            1.4         2.6
                                                     
Business                Previous quarter             2.8         3.8      1.0         4.3            2.6         1.5
                        A year ago                   1.3         2.2      0.9         4.1            1.6         2.7
                                                     
Manufacturing           Previous quarter             2.1         2.3      0.3         3.8            2.1         1.7
                        A Year ago                   1.5         1.0     -0.6         4.1            1.6         2.5
                                                     
 Durable                Previous quarter             3.3         4.1      0.8         3.0            1.4        -0.2 
 manufacturing          A year ago                   2.2         1.1     -1.1         4.3            1.8         2.1 
                                                     
 Nondurable             Previous quarter             1.2         0.5     -0.7         5.1            3.4         3.8
 manufacturing          A year ago                   0.6         0.8      0.2         3.7            1.2         3.1
=========================================================================================================================


=========================================================================================================================
Table A2. 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
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial             Revised                    -0.2         0.6      0.8         4.3            0.5         4.6
corporate          Previously published             -1.2        -0.3      0.9         4.3            0.5         5.5
=========================================================================================================================


=========================================================================================================================
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                     -1.8        -0.6      1.2         5.0            1.2         6.9
                   Previously published             -1.5        -0.2      1.3         5.0            1.2         6.6
                        
Business                Revised                     -2.0        -0.9      1.1         5.1            1.3         7.3
                   Previously published             -1.8        -0.6      1.2         5.1            1.3         7.0
                        
Manufacturing           Revised                      3.3         3.7      0.4         6.3            2.4         2.9
                   Previously published              4.4         4.8      0.4         6.4            2.6         2.0

 Durable                Revised                      6.8         7.5      0.6         7.1            3.2         0.2
 manufacturing     Previously published              7.2         7.9      0.6         7.2            3.3         0.0
                        
 Nondurable             Revised                      0.0         0.0      0.0         4.8            1.0         4.8
 manufacturing     Previously published              1.7         1.7      0.0         4.9            1.0         3.1
=========================================================================================================================