Updated: 04-Sep-25 09:40 ET
| Q2 Productivity-Prel |
 |
|
| Updated: 04-Sep-25 09:40 ET |
Highlights
- Q2 productivity was revised up to 3.3% (Briefing.com consensus: 2.4%) from the advance estimate of 2.4%.
- Q2 unit labor costs were revised down to 1.0% (Briefing.com consensus: 1.6%) from the advance estimate of 1.6%.
Key Factors
- The increase in productivity was the result of output increasing 4.4%, versus the advance estimate of 3.7%, and hours worked increasing 1.1%, versus the advance estimate of 1.3%.
- From the same quarter a year ago, nonfarm business sector labor productivity increased 1.5%.
- The increase in unit labor costs stemmed from a 4.3% increase in hourly compensation, versus the advance estimate of 4.0%, and a 3.3% increase in productivity, versus the advance estimate of 2.4%.
- Manufacturing sector labor productivity increased 2.5%, versus the advance estimate of 2.1%, as output increased 2.4%, versus the advance estimate of 2.3%, and hours worked decreased 0.1%, versus the advance estimate of a 0.3% increase. Unit labor costs in the total manufacturing sector increased 2.0%, versus the advance estimate of 1.7%, driven by a 4.5% increase in hourly compensation, versus the advance estimate of 3.8%, and a 2.5% increase in productivity, versus the advance estimate of 2.1%.
Big Picture
- The key takeaway from the report is that it hit a sweet spot of signalling stronger productivity growth and a modest increase in unit labor costs.
| Category | Q2 | Q1 | Q4 | Q3 | Q2 |
| Nonfarm Business Sector | |||||
| Productivity Q/Q | 3.3% | -1.8% | 1.7% | 2.9% | 2.1% |
| Unit Labor Costs Q/Q | -1.8% | 6.9% | 2.0% | -1.5% | -0.9% |
| Productivity Y/Y | 1.7% | 1.2% | 2.1% | 2.5% | 3.1% |
| Unit Labor Costs Y/Y | 2.9% | 2.1% | 2.3% | 1.6% | 2.3% |