U.S. labor productivity rose 1.4% in the second quarter as unit labor costs increased 1.3%
U.S. nonfarm business labor productivity increased at a 1.4% annual rate in the second quarter of 2026 as output rose 1.7% and hours worked increased 0.3%, the Bureau of Labor Statistics reported Aug. 6.
Productivity was 2.2% higher than a year earlier. The quarterly estimate is preliminary and will be revised as additional source data become available.
Compensation rose, but inflation-adjusted pay fell
Unit labor costs increased at a 1.3% annual rate during the quarter. Hourly compensation rose 2.7%, while real hourly compensation, which adjusts for consumer prices, fell 3.1%.
Labor compensation accounted for 52.9% of output, the lowest reading in the series that begins in 1947. That measure describes the nonfarm business sector as a whole, not the experience of every worker or company.
Manufacturing productivity increased 1.9%
Manufacturing productivity increased 1.9% as output rose 4.6% and hours worked increased 2.6%. Durable-goods productivity rose 2.7%, while nondurable-goods productivity increased 2.0%.
Manufacturing unit labor costs were unchanged during the quarter because the 1.9% increase in hourly compensation was offset by the 1.9% productivity gain. Those costs were 3.5% higher than a year earlier.
First-quarter figures were revised
BLS revised first-quarter nonfarm business productivity from a 0.3% increase to a 0.8% increase. Output was revised from 1.0% to 1.5%, while unit labor costs were revised down from 1.8% to 1.3%.
The revised second-quarter report is scheduled for Sept. 3.
Sources
- Productivity and Costs, Second Quarter 2026, Preliminary, U.S. Bureau of Labor Statistics
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