2026 Second Quarter (Revised) 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, Revised

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 1.2 percent in the second quarter of 2026, reflecting a 2.6-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 3.3 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 52.8 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 2.4 percent in the second quarter of 2026, as output increased 5.4 percent and hours worked increased 2.9 percent. The increase in manufacturing sector output is the largest since the second quarter of 2021, when the measure increased 6.7 percent. In the durable manufacturing sector, productivity increased 3.6 percent, reflecting an 8.9-percent increase in output and a 5.1-percent increase in hours worked. Nondurable manufacturing sector productivity increased 2.1 percent, as output increased 1.4 percent and hours worked decreased 0.6 percent. Total manufacturing sector productivity increased 1.1 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)

Unit labor costs in the total manufacturing sector decreased 0.3 percent in the second quarter of 2026, as hourly compensation increased 2.1 percent and labor productivity increased 2.4 percent. This is the first decline in unit labor costs for the manufacturing sector since the second quarter of 2021, when the measure also declined 0.3 percent. Manufacturing sector unit labor costs increased 3.4 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.

Preliminary measures for the second quarter of 2026 were announced today for the nonfinancial corporate sector. Productivity increased 2.2 percent, as output increased 3.9 percent and hours worked increased 1.7 percent. Productivity increased 3.1 percent over the last four quarters. Unit profits of nonfinancial corporations increased at an annualized rate of 43.0 percent in the second quarter of 2026, the highest rate since the second quarter of 2021. Over the last four quarters, unit profits increased 17.8 percent, the highest rate since the fourth quarter of 2021. (See table 6.)

Revised measures

Measures released today are based on more recent source data than were available for the preliminary report; they reflect regular updates of source data from the BLS, the Bureau of Economic Analysis (BEA), and the Board of Governors of the Federal Reserve System.

In the second quarter of 2026, nonfarm business sector labor productivity, output, and hours worked were not revised at the displayed precision for either annualized one-quarter or four-quarter growth rates. Unit labor costs increased 1.2 percent in the second quarter of 2026 rather than increasing 1.3 percent as previously reported, reflecting a 0.1-percentage point downward revision to hourly compensation.

Manufacturing sector labor productivity for the second quarter of 2026 was revised up to an increase of 2.4 percent from a previously reported increase of 1.9 percent, reflecting a 0.8-percentage point upward revision to output and a 0.3-percentage point upward revision to hours worked. Durable manufacturing sector productivity was revised up 0.9 percentage point to an increase of 3.6 percent; nondurable manufacturing sector productivity was revised up 0.1 percentage point to an increase of 2.1 percent. Total manufacturing unit labor costs decreased 0.3 percent in the second quarter of 2026, reflecting a 0.3-percentage point downward revision.

In the first quarter of 2026, nonfarm business sector labor productivity and unit labor costs were not revised. Manufacturing sector productivity was revised up 0.3 percentage point to an increase of 2.2 percent. As a result, unit labor costs were revised down 0.2 percentage point to an increase of 3.3 percent. In the nonfinancial corporate sector, first-quarter 2026 productivity increased 1.4 percent, as previously reported. Unit labor costs and unit profits in the nonfinancial corporate sector were not revised. (See table 6.)

Quarterly and annual data for all sectors for recent years 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.

The preliminary Productivity and Costs news release for third-quarter 2026 is scheduled to be published on Thursday, November 5, 2026, at 8:30 a.m. (ET).