U.S. unit labor costs rebounded sharply in the fourth quarter of 2025, rising 2.8% quarter-over-quarter, according to data updated on 5 March 2026. This marks a notable turnaround from the previous reading of -1.8% in the same quarter, which reflected a decline in labor costs relative to output compared with the prior period.
The data are measured on a quarter-over-quarter basis, with the current 2.8% figure comparing the fourth quarter’s performance to the third quarter, while the earlier -1.8% reading captured the change in the previous quarter versus its predecessor. The move from negative to positive growth in unit labor costs suggests a shift in the cost dynamics facing U.S. employers at the end of 2025, with potential implications for margins, wage pressures, and inflation monitoring going into 2026.
