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Fourth Quarter and Annual Averages 2025, Preliminary
Nonfarm business sector labor productivity increased 2.8 percent in the fourth quarter of 2025, the U.S. Bureau of Labor Statistics reported today, as output increased 2.6 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 2.8 percent. (See table A1.) Annual average productivity increased 2.2 percent from 2024 to 2025. (See table C1.)
Unit labor costs in the nonfarm business sector increased 2.8 percent in the fourth quarter of 2025, reflecting a 5.7-percent increase in hourly compensation and a 2.8-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.
Historical Revisions to Productivity and Costs Data
Data in this release incorporate the annual benchmark revision of BLS Current Employment Statistics program data on employment and hours of employees on nonfarm payrolls. Data also include revisions to employment and hours of all other business sector workers that reflect updated seasonal adjustment of those data by the BLS Major Sector Productivity program. See Revised measures section.
Real hourly compensation, which takes into account consumer prices, increased 3.1 percent in the fourth quarter of 2025, and increased 1.3 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 53.8 percent in the fourth quarter of 2025, the lowest level in the series which begins in the first quarter of 1947.
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 2.2 percent, reflecting a 2.6-percent rate of growth in output and a 0.4-percent rate of growth in hours worked. The 2.2-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 the same as the long-term rate of 2.2 percent since the first quarter of 1947.
Manufacturing sector labor productivity decreased 1.9 percent in the fourth quarter of 2025, as output decreased 2.2 percent and hours worked decreased 0.3 percent. In the durable manufacturing sector, productivity decreased 3.0 percent, reflecting a 2.3-percent decrease in output and a 0.7-percent increase in hours worked. Nondurable manufacturing sector productivity decreased 0.2 percent, as output decreased 2.1 percent and hours worked decreased 2.0 percent. Total manufacturing sector productivity increased 2.3 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)
Unit labor costs in the total manufacturing sector increased 8.3 percent in the fourth quarter of 2025, reflecting a 6.2-percent increase in hourly compensation and a 1.9-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 2.6 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.
Revised measures
Quarterly and annual measures of hours worked and related measures—including productivity—were revised back at least 5 years for all major sectors. The revisions reflect incorporation of revised BLS Current Employment Statistics (CES) program data for employment and hours of employees on nonfarm payrolls; the largest revisions were in 2024 and 2025. There were also minor revisions in the business sectors back to 1990. Revisions to employment and hours worked from 2021 to 2025 in all sectors also reflect revised seasonal adjustment of hours worked by nonfarm self-employed and unpaid family workers, all farm workers, and employees of government enterprises. These measures, based on source data from the BLS Current Population Survey (CPS), are seasonally adjusted by the BLS Major Sector Productivity program.
Quarterly measures of real hourly compensation in 2025 were revised to reflect updates to seasonally adjusted data from the BLS Consumer Price Index (CPI) program released on February 13, 2026.
The largest revisions to hours worked and labor productivity were in 2024 and 2025. Hours worked were revised down in each quarter from the second quarter of 2024 to the third quarter of 2025 while output was unrevised, resulting in upward revisions to labor productivity. The upward revisions to productivity through the third quarter, combined with the fourth-quarter increase, resulted in an upward revision in the growth rate for the current business cycle, from 2.0 percent to 2.2 percent.
Nonfarm business sector productivity in the third quarter of 2025 increased 5.2 percent rather than the previous estimate of a 4.9-percent increase, reflecting a 0.3-percentage point downward revision to hours worked; output was not revised. Unit labor costs were revised up 0.1 percentage point to a decrease of 1.8 percent.
Manufacturing sector productivity was revised down 0.1 percentage point to an increase of 3.6 percent in the third quarter of 2025, reflecting a 0.1-percentage point downward revision to output and a 0.1-percentage point upward revision to hours worked. Productivity was revised up 0.4 percentage point to an increase of 5.8 percent in the durable manufacturing sector and revised down 0.8 percentage point to an increase of 0.5 percent in the nondurable manufacturing sector. (See table B1.)
In the nonfinancial corporate sector, productivity was revised up 0.1 percentage point in the third quarter of 2025 to an increase of 3.4 percent, as output increased 4.0 percent and hours worked increased 0.6 percent. This revision reflects a 0.1-percentage point downward revision to hours worked; output was not revised. Unit labor costs were the same as the preliminary estimate, increasing 0.3 percent in the third quarter of 2025. Unit profits of nonfinancial corporations were the same as the preliminary estimate, increasing 7.8 percent in the third quarter of 2025 and were unchanged over the last four quarters. (See tables A2 and 6.)
Annual averages
Unit labor costs in the nonfarm business sector increased 1.9 percent in 2025, reflecting an increase of 4.1 percent in hourly compensation and an increase of 2.2 percent in productivity. Real hourly compensation, which takes into account changes in consumer prices, increased 1.4 percent in 2025.
In the manufacturing sector, productivity increased 2.0 percent in 2025, reflecting an increase in output of 1.1 percent and a decrease in hours worked of 0.9 percent. The 2.0 percent increase in 2025 is the largest annual increase in manufacturing productivity since 2010, when the measure increased 6.3 percent.
Manufacturing unit labor costs increased 2.3 percent in 2025, as hourly compensation increased 4.3 percent and productivity increased 2.0 percent. 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 1.6 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.
Federal Government Shutdown
Publication of this Productivity and Costs Fourth Quarter and Annual Averages 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 -3.0 -2.3 0.7 5.9 3.3 9.1 manufacturing A year ago 3.6 3.4 -0.3 5.4 2.6 1.7
Source: U.S. Bureau of Labor Statistics · Original release Mar 5, 2026.
Archived Nov 11, 2026. Source reuse policy. Formatting has been adapted for reading; the source’s conclusions remain attributed to its publisher.