U.S. labor productivity in the nonfarm business sector increased 1.4% in the second quarter of 2026, while output grew 1.7% and hours worked rose 0.3%, according to preliminary figures from the U.S. Bureau of Labor Statistics (BLS). The quarterly figures are reported at seasonally adjusted annual rates.
Compared with the second quarter of 2025, productivity was 2.2% higher. Unit labor costs rose 1.3% during the quarter, reflecting a 2.7% increase in hourly compensation alongside the productivity gain.
Real hourly compensation, after accounting for consumer prices, fell 3.1% in the quarter and was down 0.1% over the previous four quarters. The labor share of output stood at 52.9%, the lowest reading in a series dating back to the first quarter of 1947.
Manufacturing productivity also improved, advancing 1.9% as output climbed 4.6% and hours worked increased 2.6%. Durable-goods manufacturing posted a 2.7% productivity gain, while nondurable manufacturing recorded a 2.0% increase.
During the current business cycle, which began in late 2019, nonfarm productivity has grown at an annualized rate of 2.1% through the second quarter of 2026. That pace is above the 1.5% recorded during the previous business cycle and matches the long-term rate since 1947.
BLS also revised first-quarter figures, raising nonfarm productivity growth to 0.8% from the previously reported 0.3%.
The image is an illustration created with AI for general context.
Source: U.S. Bureau of Labor Statistics.
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