Analysis: US productivity grew faster than expected in Q4 last year, and cost control helped cool inflation.

According to ME News, on March 5th (UTC+8), U.S. labor productivity growth in the fourth quarter of 2025 exceeded expectations, further demonstrating that businesses are striving to improve efficiency to control costs. Data released by the Bureau of Labor Statistics on Thursday showed that after a revised upward revision of 5.2% growth in the third quarter, productivity (i.e., output per hour in the non-farm sector) grew at an annualized rate of 2.8% in the fourth quarter. The median forecast from economists surveyed was 1.9%. This recent trend in productivity helps ensure that wage pressures are under control and confirms 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, so companies are turning to new technologies and equipment to improve employee efficiency. Businesses' investments in technologies such as artificial intelligence (AI) have enabled some companies to maintain operations with leaner workforces, contributing to last year's hiring slump. Against the backdrop of continued AI investment, economists generally expect efficiency to continue to improve this year. (Source: ME)