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Productivity up 2.4 percent in second quarter 2025
August 11, 2025
Labor productivity in the nonfarm business sector increased 2.4 percent in second quarter 2025, following a decrease of 1.8 percent in the prior quarter. The rise in labor productivity in second quarter 2025 resulted from a 3.7-percent increase in output combined with a 1.3-percent increase in hours worked.
Nonfarm business sector labor productivity, percent change from previous quarter at annual rate, second quarter 2022–second quarter 2025
Quarter
Labor productivity (output per hour)
Output
Hours worked
Hourly compensation
Unit labor costs
Q2 2022
-3.3
-0.3
3.0
0.4
3.8
Q3 2022
0.0
2.6
2.6
7.4
7.4
Q4 2022
2.7
3.7
1.0
0.4
-2.2
Q1 2023
0.7
2.5
1.8
3.7
3.0
Q2 2023
3.4
2.4
-1.0
6.5
3.1
Q3 2023
4.7
5.0
0.3
5.8
1.0
Q4 2023
3.5
3.4
-0.1
4.7
1.2
Q1 2024
1.6
1.3
-0.3
10.1
8.3
Q2 2024
2.1
3.0
1.0
1.1
-0.9
Q3 2024
2.9
3.6
0.7
1.3
-1.5
Q4 2024
1.7
2.5
0.8
5.5
3.8
Q1 2025
-1.8
-0.6
1.2
5.0
6.9
Q2 2025
2.4
3.7
1.3
4.0
1.6
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. 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.
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.
These quarterly percent change data are from the Productivity program and are seasonally adjusted annual rates, subject to revision. See "Productivity and Costs — Second Quarter 2025, Preliminary" to learn more. Also see charts on productivity and costs. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked for all persons, including employees, proprietors, and unpaid family workers.
United States Department of Labor
