The productivity of American workers bounced back in the second quarter of 2025, showing strong gains after a sluggish start to the year, according to preliminary figures published by the U.S. Labor Department on Thursday.
Productivity, which measures output per hour worked, increased by 2.4% between April and June. This marks a sharp turnaround from the revised 1.8% decline recorded in the first quarter. Analysts had forecast a slightly stronger rebound of 2.5%, but the latest figure still points to improved efficiency in the U.S. workforce.
The report also highlighted a slowdown in the growth of unit labor costs, which rose by 1.6% in Q2. This follows a significantly steeper, upwardly revised jump of 6.9% in the prior quarter. Economists had anticipated a 1.5% increase in labor costs, which reflects the amount businesses pay workers to produce one unit of output.
In a separate release, the Labor Department reported that new applications for unemployment benefits rose more than anticipated last week.
For the week ending August 2nd, initial jobless claims climbed by 7,000 to a seasonally adjusted 226,000. This compares to the previous week’s revised total of 219,000 and surpasses economists’ expectations of 221,000 claims.
Despite the uptick in weekly filings, the four-week moving average—which smooths out short-term fluctuations—dipped slightly to 220,750, down from 221,250 a week earlier.
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