U.S. economic productivity rose at an annualized rate of 4.9% in the third quarter of 2025, according to data released by the Bureau of Labor Statistics on January 8, 2026. This marks the fastest pace of growth since a 6.6% increase in Q3 2023, reflecting a period of sustained output gains in the nonfarm business sector.

The increase comes alongside a 1.9% decline in unit labor costs, indicating that output is growing faster than hours worked. Analysts attribute the productivity surge to efficiency improvements, technological adoption, and strong post-pandemic economic expansion, allowing businesses to produce more without a proportional increase in labor inputs.

While some commentary describes the current level as the “highest in nearly six years,” a closer look at historical data shows that peaks in productivity were also observed in Q3 2020, though the latest figures underscore continued robust performance. Experts highlight that such gains strengthen the U.S. economic outlook by improving competitiveness, controlling inflationary pressures, and supporting long-term growth.

Economists note that sustaining these productivity gains will depend on maintaining labor market efficiency, ongoing investment in capital and technology, and policies that encourage workforce participation. The Q3 results provide a positive signal for the U.S. economy as it navigates global uncertainties and domestic economic challenges.