US Worker Productivity Rises 2.8% in Q4 2025

US nonfarm business sector productivity rose 2.8% in Q4 2025, as output grew 2.6% and hours worked fell 0.2%. Unit labor costs also rose 2.8%, driven by a 5.7% jump in hourly compensation. Real hourly compensation increased 3.1%. For full-year 2025, productivity grew 2.2%, output rose 2.6%, and unit labor costs increased 1.9%. In the manufacturing sector, productivity fell 1.9% in Q4 2025, with output dropping 2.2%, pushing manufacturing unit labor costs up 8.3%, the largest quarterly increase since Q3 2022. Durable manufacturing saw the steepest drop, with productivity falling 3.0% and unit labor costs surging 9.1%. However, for all of 2025, manufacturing productivity grew 2.0%, its strongest annual gain since 2010, with unit labor costs rising 2.3%, well below the 4% plus increases recorded in each of the prior three years.