labor productivity

“I worry about the longer-term consequences here,” said Natasha Sarin, president and co-founder or the Yale Budget Lab. “Importantly, they're not consequences that can be reversed.”

The Bureau of Labor Statistics revised labor productivity in Q4 of 2025 downward from 2.8% to 1.8%. “Marketplace” host Kai Ryssdal breaks down the numbers and what they could mean for the future of this economy.

Productivity growth allows companies to pull in more profits, which can allow them to raise wages. But recently, wage growth has slowed — even as productivity has stayed strong.

The Labor Department’s shutdown-delayed report shows third quarter productivity grew at the fastest pace in two years — a 4.9% annualized gain.

More productive workers are more profitable. So why not hire more of them?

The softening job market and immigration crackdown may be what’s behind the increase.

The Trump administration’s tariffs are raising costs for businesses, reducing the benefits of productivity improvements.

Productivity is tied to worker wages, so a drop can be cause for concern.

Stagnant productivity growth will have implications for inflation, innovation, and standards of living over time.

Labor productivity has been increasing for more than two years, according to the Labor Department.