US nonfarm business labor productivity increased by 1.8% in Q4 2025, revised down from the preliminary estimate of 2.8% and well below the strong 5.2% gain recorded in Q3. Output rose a modest 1.5% (revised from 2.6%), while hours worked edged down 0.2% after a slight increase in the previous quarter.
In the manufacturing sector, productivity declined 2.5%, reflecting a 2.8% drop in output and a 0.3% decrease in hours worked. Within manufacturing, durable goods productivity fell 3.3%, as lower output coincided with an increase in hours worked. Nondurable goods manufacturing productivity slipped 1.2%, with both output and hours declining.
On a year-over-year basis, nonfarm productivity was up 2.5% in Q4 2025. However, for the full year, productivity growth slowed to 2.1%, down from 3.0% in 2024, indicating a clear loss of momentum in efficiency gains.
