2025 Fourth 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.

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.

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

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.

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.

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