US Labor Costs Rise Falls Short of Expectations

Unit labor costs in the US nonfarm business sector increased 1.0 percent in the second quarter of 2025, lower than preliminary estimates of 1.6 percent. It reflects a 4.3 percent increase in hourly compensation and a 3.3 percent increase in productivity. Unit labor costs increased 2.5 percent over the last four quarters. Meanwhile, unit labor costs in the total manufacturing sector increased 2.0 percent, reflecting a 4.5 percent increase in hourly compensation and a 2.5 percent increase in productivity. Manufacturing unit labor costs increased 2.6 percent from the same quarter a year ago.