The U.S. Bureau of Labor Statistics (BLS) reported that nonfarm business labor productivity increased 3.6% in the third quarter of 2026, as output rose 3.7% while hours worked increased just 0.1%. Productivity was up 2.1% compared with the same quarter a year earlier. Meanwhile, unit labor costs declined 0.7% during the quarter, reflecting productivity growth outpacing the 2.9% increase in hourly compensation. Over the past four quarters, unit labor costs increased 2.4%.

Real hourly compensation, adjusted for consumer prices, increased 1.1% during the quarter, while the labor share of national output fell to 53.0%, its lowest level since the series began in 1947. Manufacturing productivity increased 0.3%, with durable goods manufacturing rising 2.2%, while nondurable manufacturing productivity declined 1.7%. Manufacturing unit labor costs increased 2.7% during the quarter and 4.0% year over year.

The report highlights continued productivity growth across the U.S. economy, potentially helping businesses manage labor expenses and maintain efficiency. Since the fourth quarter of 2019, nonfarm business productivity has grown at an annualized rate of 2.2%, matching the long-term average since 1947. However, the historically low labor share indicates that workers are receiving a smaller portion of economic output in compensation, despite ongoing productivity gains.