The US Bureau of Labor Statistics reported that nonfarm business labor productivity increased 1.4% in the second quarter of 2026. The gain reflected a 1.7% increase in output and a 0.3% rise in hours worked. Compared with the same period a year earlier, productivity increased 2.2%, showing continued improvement in business efficiency.
Unit labor costs rose 1.3% in Q2 2026 as hourly compensation increased 2.7%, partly offset by productivity gains. Over the past year, unit labor costs increased 1.4%, suggesting that labor cost pressures remained moderate. Real hourly compensation declined during the quarter, while the labor share of income fell to its lowest level since records began in 1947.
The manufacturing sector also recorded productivity growth, with output gains supporting higher efficiency. Overall, the report indicates that the US economy continues to benefit from solid productivity growth, which may help businesses manage costs and support economic expansion.
