Updated: 07-Aug-25 09:27 ET
| Q2 Productivity-Prel |
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| Updated: 07-Aug-25 09:27 ET |
Highlights
- Q2 productivity increased 2.4% (Briefing.com consensus: 2.2%) following a downwardly revised 1.8% decline (from -1.5%) in Q1.
- Unit labor costs rose 1.6% (Briefing.com consensus: 1.5%) following an upwardly revised 6.9% (from 6.6%) in Q1.
- From the same quarter a year ago, nonfarm business sector labor productivity was up 1.3%.
Key Factors
- The increase in productivity was the result of output increasing 3.7% and hours worked increasing 1.3%.
- The increase in unit labor costs stemmed from a 4.0% increase in hourly compensation and the 2.4% increase in productivity.
- Manufacturing sector labor productivity increased 2.1%, as output increased 2.3% and hours worked increased 0.3%. Unit labor costs in the total manufacturing sector increased 1.7%, driven by a 3.8% increase in hourly compensation and a 2.1% increase in productivity.
Big Picture
- The key takeaway from the report is that productivity improved noticeably from the first quarter, helping to tamp down unit labor costs. The 1.8% annualized rate of productivity growth in the current business cycle (starting Q4 2019), though, is still below the long-term rate of 2.1% since the first quarter of 1947.
| Category | Q2 | Q1 | Q4 | Q3 | Q2 |
| Nonfarm Business Sector | |||||
| Productivity Q/Q | 2.4% | -1.8% | 1.7% | 2.9% | 2.1% |
| Unit Labor Costs Q/Q | 1.6% | 6.9% | 2.0% | -1.5% | -0.9% |
| Productivity Y/Y | 1.3% | 1.2% | 2.1% | 2.5% | 3.1% |
| Unit Labor Costs Y/Y | 2.7% | 2.1% | 2.3% | 1.6% | 2.3% |