The US Bureau of Labor Statistics reported that US nonfarm business labor productivity rose 0.8% in the first quarter of 2026, driven by a 1.5% increase in output and a 0.7% rise in hours worked. Compared with a year earlier, productivity was up 2.9%.
Unit labor costs increased 2.3% during the quarter as hourly compensation rose faster than productivity. Meanwhile, real hourly compensation fell 0.5%, and labor’s share of output dropped to 54.1%, the lowest level recorded since 1947.
In manufacturing, productivity increased 3.6% in the first quarter, led by strong gains in durable goods production. Overall, the data suggests productivity growth remains stronger than in the previous business cycle, even as labor costs continue to rise.
