Manufacturing Biz #6 - Magazine - Page 15
US productivity figures leap thanks
to rise in output and GDP
F
igures at the start of this year have
shown that US productivity has
grown at an impressive annualised
rate thanks to an leap in output and GDP.
Nonfarm business sector labour productivity
increased 4.9 percent in the third quarter
of 2025, the U.S. Bureau of Labor Statistics
reported, as output increased 5.4 percent
and hours worked increased 0.5 percent.
From the same quarter a year ago, nonfarm
business sector labour productivity
increased 1.9 percent in the third quarter
of 2025.Unit labour costs in the nonfarm
business sector decreased 1.9 percent
in the third quarter of 2025, reflecting a
2.9-percent increase in hourly compensation
and a 4.9-percent increase in productivity.
Unit labour costs increased 1.2 percent over
the last four quarters.America’s Bureau of
Labor Statistics (BLS) calculates unit labour
costs as the ratio of hourly compensation
to labor productivity.Increases in hourly
compensation tend to increase unit labour
costs and increases in productivity tend to
reduce them. Real hourly compensation,
which takes into account consumer prices,
decreased 0.2 percent in the third quarter
of 2025, and increased 0.3 percent over the
last four quarters.Labour productivity, or
output per hour, is calculated by dividing
“Nonfarm business sector
labour productivity increased
4.9 percent in the third
quarter of 2025, as output
increased 5.4 percent and
hours worked increased 0.5
percent.”
an index of real output by an index of
hours worked by all workers, including
employees, proprietors, and unpaid family
workers. During the current business
cycle, starting in the fourth quarter of
2019, labour productivity has grown at an
annualised rate of 2.0 percent, reflecting
a 2.6-percent rate of growth in output
and a 0.6-percent rate of growth in hours
worked.The 2.0-percent annualised rate of
nonfarm business productivity growth in
the current business cycle thus far is higher
than the 1.5-percent rate of the previous
business cycle, from the fourth quarter of
2007 through the fourth quarter of 2019,
and is just below the long-term rate of
2.1 percent since the first quarter of 1947.
Manufacturing sector labour productivity
increased 3.3 percent in the third quarter of
2025, as output increased 2.6 percent and
hours worked decreased 0.7 percent.In the
durable manufacturing sector, productivity
increased 4.7 percent, reflecting a 3.0-percent
increase in output and a 1.7-percent
decrease in hours worked.Nondurable
manufacturing sector productivity increased
1.2 percent, as output increased 2.1 percent
and hours worked increased 1.0 percent.
Total manufacturing sector productivity
increased 2.3 percent from the same quarter
a year ago.This is the largest four-quarter
gain in manufacturing productivity since the
second quarter of 2021, when it increased
4.9 percent.Unit labour costs in the total
manufacturing sector increased 1.5 percent
in the third quarter of 2025, reflecting a
4.8-percent increase in hourly compensation
and a 3.3-percent increase in productivity.
Unit labour costs increased 0.6 percent in
the durable goods sector and increased 2.8
percent in nondurable goods industries.
Manufacturing unit labor costs increased 1.3
percent from the same quarter a year ago. Full
historical annual and quarterly measures can
be found at www.bls.gov/productivity/tables/.
The revised Productivity and Costs news
release for third-quarter 2025 is was released
on Thursday, January 29.
bIZ4BIZ.ORG
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