US Productivity Posts Strongest Gain Since 2023

Nonfarm business sector labor productivity in the US rose 3.3% in Q2 2025, rebounding from a 1.8% decline in the previous quarter and beating the preliminary estimate of 2.4%. It marked the strongest advance since Q4 2023. Output increased 4.4% after contracting 0.6% in Q1, while hours worked rose 1.1%, slightly below the 1.2% gain in the prior period. In the manufacturing sector, labor productivity advanced 2.5% in Q2, as output grew 2.4% while hours worked slipped 0.1%. On a year-over-year basis, productivity grew 1.5%, following an increase of 1.2% in the previous quarter.