Unit labor costs in the US nonfarm business sector rose by 1.6% in Q2 2025, slightly above market expectations of 1.5% and easing from a revised 6.9% increase in the previous quarter, according to a preliminary estimate. The rise was driven by a 4.0% rise in hourly compensation and a 2.4% gain in labor productivity. In the manufacturing sector, unit labor costs rose 1.7%, reflecting a 3.8% rise in hourly compensation and a 2.1% improvement in productivity. On an annual basis, nonfarm unit labor costs rose 2.6%, while manufacturing unit labor costs were up 2.5%.