05.03.202613:33:57UTC+00US Labor Productivity Beats Forecasts in Q4

Labor productivity in the US nonfarm business sector increased by 2.8% in the fourth quarter of 2025, slowing from the strong 5.2% gain recorded in the previous quarter but surpassing market expectations of a 1.9% rise, according to preliminary estimates. Output grew by 2.6%, down from a 5.4% expansion in the third quarter, while hours worked slipped 0.2% after a 0.2% increase in the prior period.

In contrast, manufacturing productivity declined 1.9% in the fourth quarter, as output fell 2.2% and hours worked decreased 0.3%. Within manufacturing, productivity in the durable goods segment dropped 3.0%, reflecting lower output alongside an increase in hours worked. Nondurable goods manufacturing productivity edged down 0.2%, with both output and hours worked declining.

On a year-over-year basis, nonfarm business productivity rose 2.8% in Q4. For the full year 2025, average productivity growth stood at 2.2%, easing notably from the 3.0% increase recorded in 2024.