2025 First Quarter (Preliminary) Productivity and Costs — 2025-05-08

Nonfarm business sector labor productivity decreased 0.8 percent in the first quarter of 2025, the U.S. Bureau of Labor Statistics reported today, as output decreased 0.3 percent and hours worked increased 0.6 percent. (All quarterly percent changes in this release are seasonally adjusted annualized rates.) This is the first decline in nonfarm business sector labor productivity since the second quarter of 2022. From the same quarter a year ago, nonfarm business sector labor productivity increased 1.4 percent in the first quarter of 2025. (See tables A1 and 2.) Unit labor costs in the nonfarm business sector increased 5.7 percent in the first quarter of 2025, reflecting a 4.8-percent increase in hourly compensation and a 0.8-percent decrease in productivity. Unit labor costs increased 1.3 percent over the last four quarters. (See tables A1 and 2.) BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity.