U.S. nonfarm business labor productivity increased at a 1.4% annual rate in the second quarter of 2026 as output grew faster than hours worked, according to preliminary Bureau of Labor Statistics data.
Output rose 1.7% while hours worked increased 0.3% on seasonally adjusted annual-rate measures. Compared with the second quarter of 2025, productivity was 2.2% higher.
Productivity measures output per hour. It can rise because workers and firms use time, equipment or processes more efficiently, but the quarterly figure does not identify which cause was most important.
Unit labor costs increased 1.3% at an annual rate as hourly compensation grew 2.7%. Unit labor cost is the labor expense required to produce one unit of output, not the same thing as a worker's paycheck.
Inflation-adjusted hourly compensation fell 3.1% at an annual rate during the quarter and was 0.1% lower than a year earlier. Those figures cover the broad nonfarm business sector and do not describe every occupation or household.
Labor's share of nonfarm business income declined to 52.9%, the lowest reading in a series that begins in the first quarter of 1947. The measure compares labor compensation with current-dollar output and can be revised with the underlying national accounts.
Manufacturing productivity increased 1.9% at an annual rate. BLS estimated gains of 2.7% in durable manufacturing and 2.0% in nondurable manufacturing.
Manufacturing unit labor costs were unchanged from the first quarter at an annual rate but stood 3.5% above their year-earlier level. Sector estimates can diverge because output, hours and compensation change at different speeds.
BLS labeled the release preliminary. Revised output, hours and compensation data can change the rates, and annualized quarter-to-quarter movements should not be read as a forecast for the full year.