US labor productivity continued to grow in the first quarter of 2026, though at a slower pace than initially estimated. According to the Bureau of Labor Statistics, nonfarm business productivity increased 0.3% as output rose 1.0% and hours worked increased 0.7%. Compared with a year earlier, productivity was up 2.8%. Unit labor costs rose 1.8%, reflecting higher compensation costs that were only partially offset by productivity gains.

Manufacturing posted stronger results, with productivity increasing 3.2% in the first quarter as output expanded 3.3%. However, revisions lowered both overall business and manufacturing productivity estimates from earlier reports. Real hourly compensation declined 1.4% during the quarter, while labor’s share of output fell to 53.7%, the lowest level recorded since the series began in 1947.

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