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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.
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.
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.
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
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/.
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.
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
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
Source: U.S. Bureau of Labor Statistics · Original release Jan 8, 2026.
Archived Nov 11, 2026. Source reuse policy. Formatting has been adapted for reading; the source’s conclusions remain attributed to its publisher.