Unit labor costs for Q4
- Prior quarter -1.9% revised to -1.8%
- Unit Labor costs for Q4 2.8% vs 2.0% expected
More details on Unit Labor costs from the BLS:
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Hourly compensation rose 5.7%, partly offset by 2.8% productivity growth.
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Year-over-year: Unit labor costs increased 1.3% over the past four quarters.
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Real hourly compensation: +3.1% in Q4; +1.3% year-over-year after adjusting for inflation.
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Labor share: 53.8% of output, the lowest level since records began in 1947.
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Current business cycle: Productivity has grown at a 2.2% annualized pace since Q4 2019, stronger than the 1.5% pace in the prior cycle (2007–2019).
Productivity for Q4
- Prior quarter 4.9% revised higher to 5.2%
- Productivity Q4 2.8% vs 1.9% expected
- Annual average productivity increased 2.2 percent
from 2024 to 2025.
U.S. Labor Productivity (Quarterly)
Labor productivity measures how efficiently the economy produces goods and services relative to the labor used. It is calculated as real output per hour worked and is reported quarterly by the Bureau of Labor Statistics, mainly for the nonfarm business sector. Rising productivity means more output is being produced with fewer hours worked, which supports economic growth and can help keep inflation pressures contained.
U.S. Unit Labor Costs (Quarterly)
Unit labor costs measure the labor cost required to produce one unit of output. The metric compares worker compensation with productivity and is also released quarterly in the BLS Productivity and Costs report. Unit labor costs tend to rise when wages increase faster than productivity and are closely watched as a potential indicator of underlying inflation pressures.
