US Worker Productivity and Labor Costs Revised Lower
Nonfarm productivity rose at a downwardly revised 0.3 percent annualized rate last quarter, marking the slowest growth since early 2025. Unit labor costs were also adjusted lower to a 1.8 percent pace as businesses begin integrating artificial intelligence to boost efficiency and manage expenses.
The United States worker productivity grew at a downwardly revised 0.3% annualized rate during the first quarter. This expansion follows a 1.6% growth rate in the final quarter of 2025 and falls below the previously estimated 0.8% pace. The revision aligns with recent downgrades to gross domestic product and suggests a softening in hourly output per worker.
The Bureau of Labor Statistics reported on Thursday morning that nonfarm productivity missed economist expectations of a 0.5% revised rate. This softness follows a recent downgrade to first-quarter GDP growth, which was cut to a 1.6% rate from an initial 2.0%.
