U.S. Labor Productivity Pulls Back More Than Expected In Q1

The Labor Department released a report on Thursday showing a pullback by U.S. labor productivity in the first quarter of 2025 along with a sharp increase by unit labor costs.

The report said labor productivity fell by 0.8 percent in the first quarter after jumping by an upwardly revised 1.7 percent in the fourth quarter of 2024.

Economists had expected labor productivity to decrease by 0.4 percent compared to the 1.5 percent increase that had been reported for the previous quarter.

Meanwhile, the report said unit labor costs soared by 5.7 percent in the first quarter after shooting up by a revised 2.0 percent in the fourth quarter.

Economists had expected unit labor costs to spike by 5.3 percent compared to the 2.2 percent surge originally reported for the previous quarter.