WASHINGTON – American worker productivity expanded at a much weaker pace during the final three months of last year than federal officials initially calculated, according to revised data released Tuesday.
The Bureau of Labor Statistics reported that nonfarm productivity – which tracks how much workers produce per hour – grew at an annual rate of 1.8% in the fourth quarter. This represents a significant downward adjustment from the original estimate of 2.8% growth. Market analysts surveyed by Reuters had anticipated the revision would bring the figure down to 2.0%.
When compared to the same period a year earlier, productivity climbed 2.5%. The third quarter had shown much stronger productivity gains of 5.2%, which remained unchanged in the latest revision. For all of 2025, productivity rose 2.1%. Officials noted the report’s release was postponed due to last year’s federal government shutdown.
The weaker productivity numbers align with recent major revisions to economic growth data, which showed the nation’s gross domestic product expanded at only 0.7% in the fourth quarter – roughly half the initially reported 1.4% rate.
Many economists anticipate that widespread implementation of artificial intelligence technology will eventually drive productivity gains higher while helping to control labor expenses.
Meanwhile, unit labor costs – representing what employers pay for each unit of production – jumped 4.4% during the quarter. This marked a substantial increase from the original estimate of 2.8% growth, and exceeded economists’ expectations of a 3.5% rise.
Compared to the previous year, unit labor costs increased 2.4%. The third quarter’s unit labor cost growth was revised downward to 1.0% from the previously reported 1.8%. For the full year 2025, these costs rose 2.3%.
