United States Nonfarm Productivity QoQ

US labor productivity in the nonfarm business sector fell by 0.8% in Q1 2025, exceeding expectations of a 0.7% decline, preliminary estimates showed. This marks the first drop since Q2 2022, primarily driven by a 0.3% decrease in business output, worsened by trade-related GDP weakness. The decline halts the recent productivity gains that had helped manage inflationary pressures from rising employment costs. Despite this, hours worked increased by 0.6%. The manufacturing sector stood out with a 4.5% productivity boost, driven by a 5.1% rise in factory output, especially in commercial aircraft production. Overall, productivity growth and immigration have supported the economy and kept inflation in check post-pandemic. Future productivity gains may hinge on clarity regarding trade and tax policies. On an annual basis, productivity grew by 1.4%.