Updated: 05-Mar-26 09:36 ET
| Q4 Productivity-Prel |
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| Updated: 05-Mar-26 09:36 ET |
Highlights
- Nonfarm business sector labor productivity increased 2.8% in the fourth quarter (Briefing.com consensus: 4.0%) following an upwardly revised 5.2% (from 4.9%) in the third quarter.
- Unit labor costs jumped 2.8% in the fourth quarter (Briefing.com consensus: 0.2%) on the heels of an upwardly revised 1.8% decline (from -1.9%) in the third quarter.
Key Factors
- The increase in productivity was the result of output increasing 2.6% and hours worked decreasing 0.2%. From the same quarter a year ago, nonfarm business sector labor productivity increased 2.8%.
- The increase in unit labor costs stemmed from a 5.7% increase in hourly compensation and a 2.8% increase in productivity.
- Manufacturing sector labor productivity decreased 1.9%, as output decreased 2.2% and hours worked decreased 0.3%. Unit labor costs in the total manufacturing sector increased 8.3%, driven by a 6.2% increase in hourly compensation and a 1.9% decrease in productivity.
Big Picture
- The key takeaway from the report is that the productivity increase itself was pretty solid, yet that consideration was offset by the comparable jump in unit labor costs that aren't going to help ease concerns about sticky inflation pressures.
| Category | Q4 | Q3 | Q2 | Q1 | Q4 |
| Nonfarm Business Sector | |||||
| Productivity Q/Q | 2.8% | 5.2% | 4.2% | -0.9% | 1.4% |
| Unit Labor Costs Q/Q | 2.8% | -1.8% | -2.9% | 7.3% | 2.9% |
| Productivity Y/Y | 2.8% | 2.4% | 2.1% | 2.0% | 2.3% |
| Unit Labor Costs Y/Y | 1.3% | 1.3% | 2.0% | 3.0% | 2.6% |