US nonfarm business productivity fell -1.5% QoQ annualized in Q1 2025 (revised up from -0.8% QoQ annualized), the first decline since Q2 2022, as output decreased -0.2% and hours worked rose +1.3%.

• Unit labor costs surged +6.6% QoQ, driven by a +5.0% rise in hourly compensation and the drop in productivity; +1.9% YoY.
• Real hourly compensation rose +1.2% QoQ and +0.5% YoY.
• Manufacturing productivity rose +4.4% QoQ (output +4.8%, hours +0.4%), led by durable goods (+7.2%); +1.4% YoY.
• Manufacturing unit labor costs rose +2.0% QoQ (+6.4% compensation vs +4.4% productivity); +0.3% YoY.
• Nonfinancial corporate sector productivity fell -1.2% QoQ but was up +2.0% YoY.