John Carney 5 Mar 2026
American worker productivity rose more than expected in the fourth quarter of 2025, capping a year of robust efficiency gains that have confounded critics who predicted that trade and immigration policies would slow the economy.
The Bureau of Labor Statistics reported Thursday that nonfarm business sector labor productivity increased at an annualized rate of 2.8 percent in the fourth quarter, well above the 1.9 percent analysts had forecast. Output rose 2.6 percent while hours worked fell 0.2 percent.
The report also revised the third quarter reading upward, to a 5.2 percent annualized rate from an earlier estimate of 4.9 percent — the strongest quarterly gain in five years. Together, the two quarters dispel any notion that the third quarter’s exceptional performance was a one-time anomaly.
The revisions also pushed up the productivity growth rate for the entire current business cycle, which began in the fourth quarter of 2019, from 2.0 percent to 2.2 percent annualized. That matches the long-run historical average going back to 1947 and represents a significant improvement over the 1.5 percent rate of the previous business cycle, from 2007 to 2019.
The improvement in the cycle average reflects a pattern of upward revisions across multiple prior quarters. Hours worked were revised down in each quarter from the second quarter of 2024 through the third quarter of 2025, while output was left unchanged — meaning workers were producing the same amount in less time than previously measured.
Economists who had been skeptical of strong productivity gains are taking note. The data suggests that business investment in new technologies, including artificial intelligence, is beginning to show up in measurable efficiency improvements across the broader economy.
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https://www.breitbart.com/economy/2026/03/05/u-s-productivity-surges-above-expectations-in-fourth-quarter/
