Analysis: US Q4 Productivity Growth Exceeds Expectations, Cost Control Helps Cool Inflation

Odaily News According to data released by the Bureau of Labor Statistics on Thursday, US labor productivity growth in the fourth quarter of 2025 exceeded expectations, providing further evidence that companies are actively improving efficiency to control costs. Following an upwardly revised 5.2% growth in the third quarter, fourth-quarter productivity (measured as output per hour in the nonfarm business sector) increased at an annualized rate of 2.8%. The median forecast from economists surveyed prior to the release was for a 1.9% increase. The recent trend of rising productivity helps ensure wage pressures remain contained and supports the view of Federal Reserve officials that the labor market is no longer a source of inflation. Labor costs are the largest expense for many businesses, leading companies to turn to new technologies and equipment to enhance worker efficiency. Investments in technologies like Artificial Intelligence (AI) have enabled some firms to operate with leaner staffing, which was one factor contributing to weak hiring last year. Against the backdrop of continued strong AI investment, economists generally expect efficiency gains to continue this year. (Jin10)