U.S. labor productivity accelerated sharply in the third quarter of 2025, rising at a 4.9 percent annual rate as workers contributed more output per hour worked, the Bureau of Labor Statistics reported Thursday.
The figure substantially exceeded economist expectations of 3.6 percent and marked the strongest quarterly gain in two years. Combined with an upwardly revised 4.1 percent increase in the second quarter, the back-to-back performance suggests American businesses are adapting to tighter labor markets by investing in efficiency rather than pursuing the low-cost labor strategies that dominated much of the past two decades.
The data indicate…
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