2025 Total Factor Productivity — 2026-03-19

Private nonfarm business sector total factor productivity (TFP) increased 0.8 percent in 2025, the U.S. Bureau of Labor Statistics reported today. (See table A.) The 2025 increase in TFP reflects a 2.6-percent increase in output and a 1.7-percent increase in the combined inputs of capital and labor. Capital input grew 2.7 percent and labor input�which is the combined effect of hours worked and labor composition�increased 1.1 percent. Output and TFP growth decelerated in each of the last 2 years, while combined inputs rebounded in 2025 from a deceleration in growth in 2024. Private business sector TFP also increased 0.8 percent in 2025, as output increased 2.6 percent and combined inputs increased 1.7 percent. (See table A.) Total factor productivity is calculated by dividing an index of real output by an index of combined units of labor input and capital input.