Unit labor costs in the US nonfarm business sector increased by 4.4% in Q4 2025, exceeding the earlier estimate of 2.8% and following a 1% rise in Q3. The quarterly gain reflected a 6.3% increase in hourly compensation and a 1.8% rise in productivity.
In the manufacturing sector, unit labor costs jumped 9.1% in Q4, the largest increase since Q3 2022. This was driven by a 6.3% rise in hourly compensation and a 2.5% decline in productivity.
On an annual basis, nonfarm unit labor costs rose 2.4%, while manufacturing unit labor costs increased 2.9%. For full-year 2025, unit labor costs were up 2.3% in the nonfarm business sector and 2.4% in the manufacturing sector.
