2026 Second Quarter (Preliminary) Productivity and Costs

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

Second Quarter 2026, Preliminary

Nonfarm business sector labor productivity increased 1.4 percent in the second quarter of 2026, the U.S. Bureau of Labor Statistics reported today, as output increased 1.7 percent and hours worked increased 0.3 percent. (All quarterly percent changes in this release are seasonally adjusted annualized rates.) From the same quarter a year ago, nonfarm business sector labor productivity increased 2.2 percent in the second quarter of 2026. (See tables A1 and 2.)

Unit labor costs in the nonfarm business sector increased 1.3 percent in the second quarter of 2026, reflecting a 2.7-percent increase in hourly compensation and a 1.4-percent increase in productivity. Unit labor costs increased 1.4 percent over the last four quarters. (See tables A1 and 2.)

BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs and increases in productivity tend to reduce them. Real hourly compensation, which takes into account consumer prices, decreased 3.1 percent in the second quarter of 2026, and decreased 0.1 percent over the last four quarters. The labor share, which is the percentage of output that accrues to workers in the form of compensation, was 52.9 percent in the second quarter of 2026, the lowest level in the series which begins in the first quarter of 1947.

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all workers, including employees, proprietors, and unpaid family workers. During the current business cycle, starting in the fourth quarter of 2019, labor productivity has grown at an annualized rate of 2.1 percent through the second quarter of 2026, reflecting a 2.5-percent rate of growth in output and a 0.4-percent rate of growth in hours worked. The 2.1-percent annualized rate of nonfarm business productivity growth in the current business cycle thus far is higher than the 1.5-percent rate of the previous business cycle, from the fourth quarter of 2007 through the fourth quarter of 2019, and the same as the long-term rate of 2.1 percent since the first quarter of 1947.

Manufacturing sector labor productivity increased 1.9 percent in the second quarter of 2026, as output increased 4.6 percent and hours worked increased 2.6 percent. In the durable manufacturing sector, productivity increased 2.7 percent, reflecting a 7.3-percent increase in output and a 4.5-percent increase in hours worked. Nondurable manufacturing sector productivity increased 2.0 percent, as output increased 1.5 percent and hours worked decreased 0.5 percent. Total manufacturing sector productivity increased 0.9 percent from the same quarter a year ago. Durable goods manufacturing productivity increased 2.2 percent over the last 4 quarters, as output grew 3.1 percent and hours worked rose 0.9 percent. In contrast, productivity declined 0.3 percent in nondurable goods industries over the last 4 quarters, as output declined 0.6 percent and hours worked declined 0.4 percent. (See tables A1, 3, 4, and 5.)

Unit labor costs in the total manufacturing sector were unchanged in the second quarter of 2026, as a 1.9-percent increase in hourly compensation was offset by a 1.9-percent increase in productivity. Manufacturing unit labor costs increased 3.5 percent from the same quarter a year ago. (See tables A1 and 3.)

Manufacturing sector labor productivity has grown at an annualized rate of 0.5 percent during the current business cycle, from the fourth quarter of 2019 through the second quarter of 2026, as output grew at a 0.2-percent rate and hours worked declined at a 0.3 percent rate. The 0.5-percent annualized rate of productivity growth in the current business cycle thus far is above the 0.1-percent rate of the previous business cycle from the fourth quarter of 2007 through the fourth quarter of 2019 and is below the long-term rate of 2.1 percent since the first quarter of 1987.

The concepts, sources, and methods used for the manufacturing output series differ from those used in the business and nonfarm business output series; these output measures are not directly comparable. See the Technical Notes for a more detailed explanation.

Revised measures

Regular updates of source data published in June and July by the BLS and the Bureau of Economic Analysis (BEA) are reflected in revised data for all sectors for the first quarter of 2026. Regular updates of source data published in June and July by the Board of Governors of the Federal Reserve System are reflected in revised data for the manufacturing sectors for fourth-quarter 2025 and first-quarter 2026.

Nonfarm business sector productivity was revised up 0.5 percentage point to an increase of 0.8 percent in the first quarter of 2026; output was revised up 0.5 percentage point to an increase of 1.5 percent and hours worked were not revised. (See table B1.) The upward revision to productivity translated to a 0.5-percentage point downward revision to first-quarter unit labor costs, to a rate of 1.3 percent; hourly compensation was not revised.

Manufacturing sector productivity was revised down 1.3 percentage point to an increase of 1.9 percent in the first quarter of 2026, reflecting a 1.4-percentage point downward revision to output; hours worked were not revised. Durable manufacturing sector productivity was revised down 0.9 percentage point to an increase of 4.6 percent. Nondurable manufacturing sector productivity was revised down 1.6 percentage point to a decrease of 0.7 percent. In the first quarter of 2026, total manufacturing unit labor costs were revised up 1.3 percentage point to an increase of 3.5 percent, reflecting the 1.3-percentage point downward revision to productivity; hourly compensation was not revised. (See tables B1 and 3.)

Nonfinancial corporate sector productivity was revised up 0.7 percentage point to an increase of 1.4 percent in the first quarter of 2026. Unit labor costs in the nonfinancial corporate sector were revised down 0.7 percentage point to an increase of 0.7 percent. (See table A2 and 6.)

Quarterly and annual data for all sectors from 2024 forward appear in tables 1-6. Full historical annual and quarterly measures, including percent changes, indexes, and levels, can be found in the file located at www.bls.gov/web/prod2/labor-productivity-major-sectors.xlsx.

Durable Previous quarter 2.7 7.3 4.5 1.0 -4.7 -1.6 manufacturing A year ago 2.2 3.1 0.9 5.5 1.7 3.3