US Productivity Accelerates In Q3, In Line With Expectations – Jobless Claims Inch Higher Last Week

• The BLS report added that output increased 5.4% in Q3, while the number of hours worked edged up by 0.5%.
• Meanwhile, jobless claims rose in the week ended January 3 to 208,000 from 200,000 a week ago, but came in below market expectations.
• A Challenger, Gray & Christmas report showed that job cuts in December declined to the lowest level in 17 months.

U.S. labor productivity accelerated in the third quarter (Q3) of 2025, according to data released by the Bureau of Labor Statistics on Thursday.

The report stated that nonfarm productivity accelerated to an annualized rate of 4.9% in Q3, up from 1.9% during the year-ago period, and higher than the upwardly revised 4.1% increase in the second quarter (Q2).

The BLS report added that output increased 5.4% in Q3, while the number of hours worked edged up by 0.5%. 

Unit labor costs in the nonfarm business sector declined 1.9%, the BLS report stated, while hourly compensation rose 2.9%, below the 4.9% increase in productivity.

Jobless Claims Rise

Meanwhile, jobless claims rose in the week ended January 3, but came in below market expectations.

Jobless claims rose by 8,000 from the prior week to 208,000, lower than a Dow Jones estimate of 210,000, as cited by MarketWatch.

The four-week moving average for jobless claims, which smooths weekly volatility, fell by 7,250 to 211,750, the lowest level since Apr. 27, 2024, when it stood at 210,250.

Continuing Claims Rise

Continuing claims, which refer to the number of people claiming unemployment benefits beyond the first week, stood at 1.91 million for the week ended December 27, increasing by 56,000 over the previous week.

The largest increase in claims was in New Jersey at 6,871, followed by Pennsylvania at 5,406, whereas the largest decrease was in Texas at 7,951 and California at 6,514.

Job Cuts Decline

According to a report by consulting firm Challenger, Gray & Christmas, job cuts in December declined to the lowest level in 17 months.

Planned job cuts stood at 35,553 in December, halving from November’s tally of 71,321, and declining 8% year-on-year.

“The year closed with the fewest announced layoff plans all year. While December is typically slow, this coupled with higher hiring plans, is a positive sign after a year of high job cutting plans,” said Andy Challenger, Chief Revenue Officer at Challenger, Gray & Christmas.

For the full year 2025, job cuts stood at 1.2 million, rising by 58% from the 761,358 cuts announced in 2024.

The government led the job cuts tally in 2025, with a reduction of 308,167 roles, followed by Technology at 154,445, and Warehousing at 95,317 during the year.

Meanwhile, U.S. equities declined in Thursday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down by 0.12%, the Invesco QQQ Trust ETF (QQQ) fell 0.33%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.12%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was down by 0.26% at the time of writing.

Also See: RGC Stock Gains 20% Pre-Market — Retail Says Shorts Are In ‘Huge Trouble’

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