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Q4 Productivity Ramped Down to 1.8% on Its Final Print
Unit Labor Costs Rose to Highest Levels Since Q1 2025
Smithfield Foods Beats in Q4, KB Home Reports Q1 Later
Tuesday, March 24th, 2026
After a nice trading day basking in the green, following President Trump’s assertion that peace talks are going “very well” with Iran (while lacking particulars, and that’s putting it kindly), pre-market futures are down a quarter of a percent at this hour. The Dow is giving back -130 points from the +631 it made yesterday, the S&P 500 is -17 from Monday’s +74, and the Nasdaq is stripping back -66 points from +299 the previous session.
Close the Book on Q4 Productivity: +1.8%
Nonfarm U.S. Productivity for Q4 of 2025 — the third and final print — dwindled back down 100 basis points (bps) from the prior read to +1.8% this morning. This is a pretty steep drop from the previous month’s +5.2% and +4.2% in Q2, but still above the -0.9% productivity level from Q1. This averages out to +2.65%, narrowly above the average long-term rate going back to 1947.
Unit Labor Costs, meanwhile, rose to their highest level since Q1 of ’25: +4.4% — 40 bps above expectations. Costs are increasing from the +1.0% from Q3 and -2.9% in Q2. Here, we average out to +2.4% for the whole of last year, meaning we quietly posted higher Productivity than Labor Costs last year. This, of course, is consistent with a healthy economy.
Return to “Earnings Island”: Smithfield, KB Home
In between earnings seasons, there are always still a few companies reporting. When we deem these reports worthy of reportage (because of their perceived effect on the economy), we call that an “Earnings Island.” Global meat processor Smithfield Foods (SFD - Free Report) reported Q4 results this morning, with a strong +25.8% earnings beat to $0.83 per share in the quarter. This compares with $0.52 per share reported in the year-ago quarter.
Revenues of $4.23 billion outpaced the Zacks consensus by +0.96%, and nicely above the $3.95 billion in sales reported in Q4 of last year. Shares are up +5% in today’s pre-market on the news, basically doubling the company’s +5% gains year to date. For more on SFD’s earnings, click here.
After today’s close, KB Home (KBH - Free Report) puts out fiscal Q1 numbers. The Zacks Rank #4 (Sell)-rated homebuilder is obviously enduring a tough period for the housing market in general. Specifically, KB Home expects to print earnings -65% per share lower than a year ago, -21% on the revenue side. The company looks for its fourth-straight earnings beat today. Shares are flat as of today’s early session, but -5.7% year to date.
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Image: Bigstock
Q4 Productivity & "Earnings Island": Pre-Markets Lower
Key Takeaways
Tuesday, March 24th, 2026
After a nice trading day basking in the green, following President Trump’s assertion that peace talks are going “very well” with Iran (while lacking particulars, and that’s putting it kindly), pre-market futures are down a quarter of a percent at this hour. The Dow is giving back -130 points from the +631 it made yesterday, the S&P 500 is -17 from Monday’s +74, and the Nasdaq is stripping back -66 points from +299 the previous session.
Close the Book on Q4 Productivity: +1.8%
Nonfarm U.S. Productivity for Q4 of 2025 — the third and final print — dwindled back down 100 basis points (bps) from the prior read to +1.8% this morning. This is a pretty steep drop from the previous month’s +5.2% and +4.2% in Q2, but still above the -0.9% productivity level from Q1. This averages out to +2.65%, narrowly above the average long-term rate going back to 1947.
Unit Labor Costs, meanwhile, rose to their highest level since Q1 of ’25: +4.4% — 40 bps above expectations. Costs are increasing from the +1.0% from Q3 and -2.9% in Q2. Here, we average out to +2.4% for the whole of last year, meaning we quietly posted higher Productivity than Labor Costs last year. This, of course, is consistent with a healthy economy.
Return to “Earnings Island”: Smithfield, KB Home
In between earnings seasons, there are always still a few companies reporting. When we deem these reports worthy of reportage (because of their perceived effect on the economy), we call that an “Earnings Island.” Global meat processor Smithfield Foods (SFD - Free Report) reported Q4 results this morning, with a strong +25.8% earnings beat to $0.83 per share in the quarter. This compares with $0.52 per share reported in the year-ago quarter.
Revenues of $4.23 billion outpaced the Zacks consensus by +0.96%, and nicely above the $3.95 billion in sales reported in Q4 of last year. Shares are up +5% in today’s pre-market on the news, basically doubling the company’s +5% gains year to date. For more on SFD’s earnings, click here.
After today’s close, KB Home (KBH - Free Report) puts out fiscal Q1 numbers. The Zacks Rank #4 (Sell)-rated homebuilder is obviously enduring a tough period for the housing market in general. Specifically, KB Home expects to print earnings -65% per share lower than a year ago, -21% on the revenue side. The company looks for its fourth-straight earnings beat today. Shares are flat as of today’s early session, but -5.7% year to date.
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