Transmission of material in this release is embargoed until USDL 26-0558
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Productivity and Costs
Fourth Quarter and Annual Averages 2025, Revised
Nonfarm business sector labor productivity increased 1.8 percent in the fourth quarter of 2025, the
U.S. Bureau of Labor Statistics reported today, as output increased 1.5 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 2.5 percent. (See table A1.) Annual average productivity increased 2.1 percent from 2024 to
2025. (See table C1.)
Unit labor costs in the nonfarm business sector increased 4.4 percent in the fourth quarter of 2025,
reflecting a 6.3-percent increase in hourly compensation and a 1.8-percent increase in productivity. Unit
labor costs increased 2.4 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 3.7 percent in the fourth
quarter of 2025, and increased 2.1 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 54.4 percent in the fourth
quarter of 2025.
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 2.1 percent, reflecting a 2.6-percent rate of growth in output and a 0.4-percent rate of
growth in hours worked. The 2.1-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 slightly lower than the long-term rate of
2.2 percent since the first quarter of 1947.
Manufacturing sector labor productivity decreased 2.5 percent in the fourth quarter of 2025, as output
decreased 2.8 percent and hours worked decreased 0.3 percent. In the durable manufacturing sector,
productivity decreased 3.3 percent, reflecting a 2.6-percent decrease in output and a 0.7-percent increase
in hours worked. Nondurable manufacturing sector productivity decreased 1.2 percent, as output
decreased 3.1 percent and hours worked decreased 1.9 percent. Total manufacturing sector productivity
increased 2.1 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)
Unit labor costs in the total manufacturing sector increased 9.1 percent in the fourth quarter of 2025,
reflecting a 6.3-percent increase in hourly compensation and a 2.5-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 2.9 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.
Nonfinancial corporate sector labor productivity increased 4.5 percent in the third quarter of 2025, as
output increased 5.2 percent and hours worked increased 0.6 percent. Productivity increased 3.8 percent
over the last four quarters. Unit labor costs in the nonfinancial corporate sector increased 1.2 percent in
the third quarter of 2025, reflecting a 5.8-percent increase in hourly compensation and a 4.5-percent
increase in productivity. Unit labor costs increased 1.4 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 in
the last four quarters. (See tables A2 and 6.)
Revised measures
The measures released today are based on more recent source data than were available for the
preliminary report. Regular updates of source data from BLS, the Bureau of Economic Analysis (BEA)
and the Board of Governors of the Federal Reserve System are reflected in data for the third and fourth
quarters of 2025.
Table B1 presents revised and previous labor productivity and related measures for the nonfarm
business, business, and manufacturing sectors for the fourth quarter of 2025. Table A2 presents revised
and previous measures for the nonfinancial corporate sector for the third quarter of 2025.
Nonfarm business sector productivity in the fourth quarter of 2025 increased 1.8 percent rather than
the previous estimate of 2.8 percent, reflecting a 1.1-percentage point downward revision to output;
hours worked were not revised. Unit labor costs were revised up 1.6 percentage points to an increase of
4.4 percent, reflecting a 1.0-percentage point downward revision to productivity and a 0.6-percentage
point upward revision to hourly compensation. (See table B1.)
Manufacturing sector productivity was revised down 0.6 percentage point to a decrease of 2.5 percent
in the fourth quarter of 2025, reflecting a 0.6-percentage point downward revision to output. Hours
worked were not revised. Productivity was revised down 0.3 percentage point to a decrease of 3.3
percent in the durable manufacturing sector and was revised down 1.0 percentage point to a decrease of
1.2 percent in the nondurable manufacturing sector. (See table B1.)
In the third quarter of 2025, nonfarm business unit labor costs were revised up 2.8 percentage points to
an increase of 1.0 percent, reflecting a 2.9-percentage point upward revision to hourly compensation.
Manufacturing unit labor costs were revised up 0.6 percentage point to an increase of 1.8 percent,
reflecting a 0.6-percentage point upward revision to hourly compensation and a 0.1-percentage point
downward revision to productivity. (See table B2.)
In the nonfinancial corporate sector, productivity was revised up 1.1 percentage point in the third
quarter of 2025 to an increase of 4.5 percent, as output was revised up 1.2 percentage points to an
increase of 5.2 percent and hours worked were unrevised. Unit labor costs were revised up 0.9
percentage point, to an increase of 1.2 percent, reflecting a 2.1-percentage point upward revision to
hourly compensation and a 1.1-percentage point upward revision to productivity. Unit profits of
nonfinancial corporations were revised down 1.2 percentage points, increasing 6.6 percent in the third
quarter of 2025. (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 was revised down 0.1
percentage point to an increase of 2.1 percent in 2025, as output was revised down 0.1 percentage point
to an increase of 2.5 percent. Hours worked in 2025 were unrevised.
Unit labor costs in the nonfarm business sector were revised up 0.4 percentage point to an increase of
2.3 percent in 2025, reflecting an upward revision of 0.4 percentage point in hourly compensation and a
0.1-percentage point downward revision to productivity. Real hourly compensation, which takes into
account changes in consumer prices, increased 1.8 percent in 2025.
In the manufacturing sector, productivity was revised down 0.1 percentage point to an increase of 1.9
percent in 2025, as output was revised down 0.1 percentage point to an increase of 1.0 percent. Hours
worked were unrevised, decreasing 0.9 percent. The 1.9 percent increase in manufacturing productivity
in 2025 is the largest annual increase in this measure since 2010, when it increased 6.3 percent.
Manufacturing unit labor costs were revised up 0.1 percentage point to an increase of 2.4 percent in
2025, as hourly compensation was revised up 0.1 percentage point and productivity was revised down
0.1 percentage point. 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 1.7 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.
______________
The preliminary Productivity and Costs news release for first-quarter 2026 is scheduled to be
released on Thursday, May 7, 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, Revised release
was delayed due to a lapse in appropriations. Productivity and costs data are not collected directly;
rather, they are 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.
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Table A1. Labor productivity growth and related measures – revised 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
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business Previous quarter 1.8 1.5 -0.2 6.3 3.7 4.4
A year ago 2.5 2.8 0.2 5.0 2.1 2.4
Business Previous quarter 1.8 1.7 -0.1 6.2 3.6 4.3
A year ago 2.6 2.8 0.2 5.0 2.2 2.4
Manufacturing Previous quarter -2.5 -2.8 -0.3 6.3 3.7 9.1
A Year ago 2.1 1.7 -0.5 5.1 2.3 2.9
Durable Previous quarter -3.3 -2.6 0.7 6.3 3.7 9.9
manufacturing A year ago 3.6 3.3 -0.3 5.9 3.0 2.2
Nondurable Previous quarter -1.2 -3.1 -1.9 6.0 3.4 7.3
manufacturing A year ago 0.8 -0.1 -0.8 3.7 1.0 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
------------------------------------------------------------------------------------------------------------------------
Nonfinancial Revised 4.5 5.2 0.6 5.8 2.6 1.2
corporate Previously published 3.4 4.0 0.6 3.7 0.6 0.3
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Table B1. Labor productivity growth and related measures – revised and previously published fourth-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 1.5 -0.2 6.3 3.7 4.4
Previously published 2.8 2.6 -0.2 5.7 3.1 2.8
Business Revised 1.8 1.7 -0.1 6.2 3.6 4.3
Previously published 2.8 2.7 -0.1 5.6 3.0 2.7
Manufacturing Revised -2.5 -2.8 -0.3 6.3 3.7 9.1
Previously published -1.9 -2.2 -0.3 6.2 3.6 8.3
Durable Revised -3.3 -2.6 0.7 6.3 3.7 9.9
manufacturing Previously published -3.0 -2.3 0.7 5.9 3.3 9.1
Nondurable Revised -1.2 -3.1 -1.9 6.0 3.4 7.3
manufacturing Previously published -0.2 -2.1 -2.0 6.5 3.9 6.7
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Table B2. 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
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business Revised 5.2 5.4 0.2 6.2 3.0 1.0
Previously published 5.2 5.4 0.2 3.3 0.2 -1.8
Business Revised 5.2 5.5 0.3 6.1 2.9 0.8
Previously published 5.2 5.5 0.3 3.2 0.1 -1.9
Manufacturing Revised 3.5 2.8 -0.6 5.4 2.2 1.8
Previously published 3.6 2.9 -0.6 4.8 1.6 1.2
Durable Revised 5.8 3.8 -1.9 7.0 3.8 1.2
manufacturing Previously published 5.8 3.8 -1.9 5.6 2.4 -0.2
Nondurable Revised 0.3 1.8 1.4 2.6 -0.4 2.3
manufacturing Previously published 0.5 1.9 1.4 3.5 0.4 3.1
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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 2.1 2.5 0.4 4.5 1.8 2.3
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 1.9 1.0 -0.9 4.4 1.7 2.4
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
