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U.S. Productivity Soars 4.9% in Q3 2025

1/31/2026

27 5 Full Breakdown

Summary

Productivity Surge Report

U.S. nonfarm business sector productivity rose 4.9% in Q3 2025, the highest since Q3 2023.
Output surged by 5.4% and hours worked rose 0.5% in Q3 2025.
Unit labor costs fell 1.9% in Q3 2025, continuing the downward trend after Q2’s 2.9% drop.
In manufacturing, unit labor costs rose 1.1%, driven by hourly compensation up 3.7% and productivity up 3%.
Annual nonfarm unit labor costs increased by 1.3%.

Summary

Productivity Boost Unleashed

In Q3 2025, U.S. worker productivity rose 4.9% per the Labor Department, the highest in two years.
The rise is attributed to a surge in artificial intelligence spending.
Despite 4.4% growth, 2025 job gains totaled 584,000, far below 2024's 2 million.
Economists say the Trump administration's trade and immigration policies affected labor demand and supply.
Unit labor costs fell 1.9% in Q3 2025, signaling cheaper labor per unit of output.

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Productivity Surge Report

U.S. nonfarm business sector productivity rose 4.9% in Q3 2025, the highest since Q3 2023.
Output surged by 5.4% and hours worked rose 0.5% in Q3 2025.
Unit labor costs fell 1.9% in Q3 2025, continuing the downward trend after Q2’s 2.9% drop.
In manufacturing, unit labor costs rose 1.1%, driven by hourly compensation up 3.7% and productivity up 3%.
Annual nonfarm unit labor costs increased by 1.3%.

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