US Labor Productivity Beats Forecasts in Q4

2026-03-05 13:33 By Joana Ferreira 1 min. read

Labor productivity in the US nonfarm business sector rose 2.8% in the fourth quarter of 2025, slowing from a sharp 5.2% increase in the previous quarter but exceeding market expectations of a 1.9% gain, according to preliminary estimates.

Output expanded by 2.6%, down from a 5.4% rise in the third quarter, while hours worked edged down by 0.2% after increasing 0.2% in the prior period.

Meanwhile, manufacturing productivity fell 1.9% during the quarter as output dropped 2.2% and hours worked declined 0.3%.

Productivity in durable goods manufacturing decreased 3.0%, reflecting lower output and higher hours worked, while nondurable manufacturing productivity slipped 0.2% as both output and hours worked fell.

On a year-over-year basis, nonfarm business productivity also rose 2.8% in Q4.

For the full year 2025, average productivity growth came in at 2.2%, moderating notably from the 3.0% increase recorded in 2024.



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