| US worker productivity growth slowed more than earlier estimated in the fourth quarter, according to new government data. Nonfarm productivity, which measures output per hour, rose at a revised annualized rate of 1.8%, down from initial estimates. This marked a sharp slowdown from the third quarter’s strong 5.2% growth.
On a yearly basis, productivity increased 2.5%, while overall growth for 2025 stood at 2.1%. The data release had been delayed due to last year’s government shutdown.
The revision follows a downgrade in fourth-quarter economic growth, with GDP now estimated to have expanded at a 0.7% rate instead of the previously reported 1.4%.
At the same time, labor costs rose more than expected. Unit labor costs, which measure the cost of labor per unit of output, increased at a 4.4% annualized rate in the fourth quarter, significantly higher than the earlier estimate of 2.8%.
Compared to a year ago, unit labor costs rose 2.4%. However, growth in the third quarter was revised lower to 1.0% from 1.8%. For the full year 2025, unit labor costs increased by 2.3%. |