2025 Third Quarter (Revised) Productivity and Costs

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

Third Quarter 2025, Revised

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. These rates were unrevised from the preliminary estimates released on January 8, 2026. (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 1.3 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.

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 3.7 percent in the third quarter of 2025, as output increased 3.0 percent and hours worked decreased 0.7 percent. In the durable manufacturing sector, productivity increased 5.4 percent, reflecting a 3.6-percent increase in output and a 1.7-percent decrease in hours worked. Nondurable manufacturing sector productivity increased 1.3 percent, as output increased 2.3 percent and hours worked increased 1.0 percent. Total manufacturing sector productivity increased 2.4 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 1.1 percent in the third quarter of 2025, reflecting a 4.8-percent increase in hourly compensation and a 3.7-percent increase in productivity. Unit labor costs were unchanged in the durable goods sector and increased 2.7 percent in nondurable goods industries. Manufacturing unit labor costs increased 1.2 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 3.3 percent in the third quarter of 2025, as output increased 4.0 percent and hours worked increased 0.7 percent. Productivity increased 2.9 percent over the last four quarters. Unit labor costs in the nonfinancial corporate sector increased 0.3 percent in the third quarter of 2025, reflecting a 3.6-percent increase in hourly compensation and a 3.3-percent increase in productivity. Unit labor costs increased 1.2 percent over the last four quarters. Unit profits of nonfinancial corporations increased 7.8 percent in the third quarter of 2025 and were unchanged over 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 the Bureau of Economic Analysis (BEA), and the Board of Governors of the Federal Reserve System are reflected in data for the third quarter of 2025. Updates of source data from the BLS for the third quarter of 2025 were already incorporated in the preliminary report released on January 8, 2026.

In the third quarter of 2025, nonfarm business sector labor productivity, output, hours worked, unit labor costs, hourly compensation, and real hourly compensation were not revised.

In the manufacturing sector, productivity increased 3.7 percent rather than increasing 3.3 percent as previously reported, reflecting a 0.4-percentage point upward revision to output. Durable manufacturing productivity increased 5.4 percent rather than increasing 4.7 percent as previously reported, and nondurable manufacturing productivity was revised up to an increase of 1.3 percent from the previously- reported increase of 1.2 percent. Total manufacturing unit labor costs were revised down 0.4 percentage point to an increase of 1.1 percent due to the upward revision to productivity.

Nonfinancial corporate sector productivity was revised up 0.3 percentage point to an increase of 3.3 percent in the third quarter of 2025, reflecting a 0.3-percentage point upward revision to output. Hours worked were not revised. Unit labor costs in the nonfinancial corporate sector were revised down 0.3 percentage point to an increase of 0.3 percent.

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, Revised 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 5.4 3.6 -1.7 5.4 2.2 0.0 manufacturing A year ago 3.4 2.7 -0.7 4.3 1.3 0.8

Nondurable Previous quarter 1.3 2.3 1.0 4.0 0.9 2.7 manufacturing A year ago 1.1 1.0 -0.1 2.3 -0.6 1.1

Nonfinancial Previous quarter 3.3 4.0 0.7 3.6 0.5 0.3 corporate A year ago 2.9 3.7 0.8 4.2 1.2 1.2