Overview
- Nonfarm productivity rose at a 2.8% annualized rate in the fourth quarter, topping the 1.9% consensus forecast.
- Unit labor costs increased 2.8% after a revised 1.8% decline in the third quarter, exceeding the 2.0% rebound economists expected.
- Third-quarter productivity was revised up to a 5.2% pace, and second-quarter growth was nudged to 4.2%.
- Hourly compensation jumped 5.7% in the quarter, with real hourly pay up about 3.1%.
- Labor’s share of output fell to 53.8%, the lowest since records began in 1947, as productivity rose 2.8% year over year and averaged 2.2% in 2025.