Transmission of material in this release is embargoed until USDL 26-1631
8:30 a.m. (ET) Thursday, November 5, 2026
Technical information: (202) 691-5606 • Productivity@bls.gov • www.bls.gov/productivity
Media contact: (202) 691-5902 • PressOffice@bls.gov
PRODUCTIVITY AND COSTS
Third Quarter 2026, Preliminary
Nonfarm business sector labor productivity increased 3.6 percent in the third quarter of 2026, the
U.S. Bureau of Labor Statistics reported today, as output increased 3.7 percent and hours worked
increased 0.1 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 2.1
percent in the third quarter of 2026. (See table A1.)
Unit labor costs in the nonfarm business sector decreased 0.7 percent in the third quarter of 2026,
reflecting a 2.9-percent increase in hourly compensation and a 3.6-percent increase in productivity. Unit
labor costs increased 2.4 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.
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Historical Revisions
Data in this release reflect the 2026 Annual Update of the National Income and Product Accounts
(NIPA) released by the Bureau of Economic Analysis of the U.S. Department of Commerce on
September 30, 2026. See “Revised measures” section.
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Real hourly compensation, which takes into account consumer prices, increased 1.1 percent in the third
quarter of 2026, and increased 1.0 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 53.0 percent in the third
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 2.2 percent through the third quarter of 2026, reflecting a 2.7-percent rate of growth in
output and a 0.4-percent rate of growth in hours worked. The 2.2-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 2.2 percent since the first quarter of 1947.
Manufacturing sector labor productivity increased 0.3 percent in the third quarter of 2026, as output
increased 1.3 percent and hours worked increased 1.0 percent. In the durable manufacturing sector,
productivity increased 2.2 percent, reflecting a 3.8-percent increase in output and a 1.6-percent increase
in hours worked. Nondurable manufacturing sector productivity decreased 1.7 percent, as output
decreased 1.6 percent and hours worked increased 0.1 percent. Total manufacturing sector productivity
increased 0.4 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)
Unit labor costs in the total manufacturing sector increased 2.7 percent in the third quarter of 2026, as
hourly compensation increased 3.0 percent and labor productivity increased 0.3 percent. Manufacturing
sector unit labor costs increased 4.0 percent from the same quarter a year ago. (See tables A1 and 3.)
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
Measures of output for the business, nonfarm business, and nonfinancial corporate sectors, and measures
of compensation for all sectors, incorporate revised National Income and Product Accounts (NIPA) data
released on September 30, 2026, by the Bureau of Economic Analysis (BEA), U.S. Department of
Commerce. As a result, all quarterly and annual measures incorporating output, including labor
productivity and unit labor costs, were revised back to 2021 for the business, nonfarm business, and
nonfinancial corporate sectors; measures incorporating compensation were revised back to 2021 for all
sectors. Source data on output and compensation released by BEA on October 29, 2026, are reflected in
data for the third quarter of 2026. Regular updates of source data on manufacturing output released in
September and October by the Board of Governors of the Federal Reserve System are reflected in data
for the first three quarters of 2026; there were no historical revisions to manufacturing output.
Hours worked and related measures for the business and nonfarm business sectors were subject to
revision back to 2021 due to revised NIPA data on government enterprises employment and on the
proportion of industry compensation paid to employees of nonprofit institutions. Hours worked and
related measures for the nonfinancial corporate sector were also subject to revision back to 2019 due to
the incorporation of revised NIPA data on the proportion of industry compensation paid to employees of
corporations.
Table B1 presents revised and previous labor productivity and related measures for the nonfarm
business, business, and manufacturing sectors for the second quarter of 2026. Table A2 presents these
measures for the nonfinancial corporate sector.
Nonfarm business sector productivity in the second quarter of 2026 was revised up 0.7 percentage
point to an increase of 2.1 percent. The revision comes from a 0.7-percentage point upward revision to
output as hours worked were unrevised. Second-quarter unit labor costs were revised up 0.7 percentage
points to an increase of 1.9 percent, reflecting a 1.4-percentage point upward revision to hourly
compensation and the 0.7-percentage point upward revision to productivity. Real hourly compensation
in the second quarter of 2026 was also revised upward by 1.4 percentage points to a decrease of 1.9
percent. (See table B1.)
Manufacturing sector productivity was revised up 0.5 percentage point to an increase of 2.9 percent in
the second quarter of 2026, reflecting a 0.4-percentage point upward revision to output; hours worked
were unrevised. Productivity was revised up 1.0 percentage point in the durable manufacturing sector
and revised down 0.1 percentage point in the nondurable manufacturing sector. In the second quarter of
2026, total manufacturing unit labor costs decreased 0.4 percent rather than 0.3 percent as previously
reported, reflecting a 0.3-percentage point upward revision to hourly compensation as well as the 0.5-
percentage point upward revision to productivity. (See table B1.)
Nonfinancial corporate sector productivity increased 3.4 percent in the second quarter of 2026, rather
than the previously published estimate of 2.2 percent. This revision results from a 1.4-percentage point
upward revision to output and a 0.1-percentage point upward revision to hours worked. Unit labor costs
in the nonfinancial corporate sector were revised down 0.1 percentage point to a decrease of 0.4 percent
in the second quarter of 2026, as hourly compensation was revised up 1.1 percentage point and
productivity was revised up 1.2 percentage points. (See table A2.)
Annual averages
Table C1 presents annual data for the nonfarm business, total manufacturing, and nonfinancial corporate
sectors from 2023 to 2025. Annual average percent changes compare average annual indexes from one
year to the next.
Annual average productivity in the nonfarm business sector was revised up 0.2 percentage point in
both 2025 and 2024 to increases of 2.3 percent and 3.2 percent, respectively. In 2023, productivity was
revised down 0.1 percentage point to an increase of 2.0 percent. Unit labor costs were revised down 0.3
percentage point in 2025, down 0.4 percentage point in 2024, and up 0.2 percentage point in 2023. (See
table C1.)
Annual average manufacturing sector productivity, output, and hours worked were not revised.
Manufacturing unit labor costs were revised up 0.1 percentage point in both 2025 and 2024, and were
revised up 0.5 percentage point in 2023. (See table C1.)
In the nonfinancial corporate sector, output and productivity were both revised down 0.8 percentage
point in 2025, and down 0.4 percentage point in 2024. Productivity was revised up 0.6 percentage point
in 2023, reflecting an upward revision to output. Annual changes in hours worked were unrevised in all
3 years. Unit labor costs were revised up 0.4 percentage point in 2025, up 0.2 percentage point in 2024,
and down 0.3 percentage point in 2023. (See tables C1 and 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.
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The revised Productivity and Costs news release for third-quarter 2026 is scheduled to be
published on Tuesday, December 8, 2026, at 8:30 a.m. (ET).
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Table A1. Labor productivity growth and related measures – preliminary third-quarter 2026
(percent change from previous quarter at annual rate and from same quarter a year ago)
Labor Hours Hourly Real hourly Unit labor
Sector Percent change from: productivity Output worked compensation compensation costs
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Nonfarm business Previous quarter 3.6 3.7 0.1 2.9 1.1 -0.7
A year ago 2.1 2.3 0.2 4.5 1.0 2.4
Business Previous quarter 4.1 3.9 -0.2 3.1 1.3 -0.9
A year ago 2.1 2.3 0.3 4.4 0.9 2.3
Manufacturing Previous quarter 0.3 1.3 1.0 3.0 1.2 2.7
A Year ago 0.4 1.3 0.9 4.4 0.9 4.0
Durable Previous quarter 2.2 3.8 1.6 2.8 1.0 0.5
manufacturing A year ago 1.9 3.8 1.9 5.0 1.5 3.0
Nondurable Previous quarter -1.7 -1.6 0.1 3.2 1.4 5.0
manufacturing A year ago -0.7 -1.4 -0.7 3.1 -0.3 3.9
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Table A2. Labor productivity growth and related measures – revised and previously published second-quarter 2026
(percent change from previous quarter at annual rate)
Labor Hours Hourly Real hourly Unit labor
Sector productivity Output worked compensation compensation costs
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Nonfinancial Revised 3.4 5.3 1.8 3.0 -2.9 -0.4
corporate Previously published 2.2 3.9 1.7 1.9 -3.9 -0.3
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Table B1. Labor productivity growth and related measures – revised and previously published second-quarter 2026
(percent change from previous quarter at annual rate)
Labor Hours Hourly Real hourly Unit labor
Sector productivity Output worked compensation compensation costs
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Nonfarm business Revised 2.1 2.4 0.3 4.0 -1.9 1.9
Previously published 1.4 1.7 0.3 2.6 -3.3 1.2
Business Revised 2.0 2.4 0.4 3.8 -2.2 1.8
Previously published 1.2 1.6 0.4 2.4 -3.4 1.2
Manufacturing Revised 2.9 5.8 2.9 2.4 -3.4 -0.4
Previously published 2.4 5.4 2.9 2.1 -3.7 -0.3
Durable Revised 4.6 9.8 5.0 2.1 -3.8 -2.4
manufacturing Previously published 3.6 8.9 5.1 1.4 -4.4 -2.2
Nondurable Revised 2.0 1.5 -0.5 2.5 -3.4 0.5
manufacturing Previously published 2.1 1.4 -0.6 2.9 -3.0 0.8
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Table C1. Labor productivity growth and related measures – revised and previous annual average changes: 2023-2025
Labor Hours Hourly Real hourly Unit labor
Sector Year productivity Output worked compensation compensation costs
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Nonfarm 2025 Revised 2.3 2.7 0.4 4.2 1.4 1.9
business Previously published 2.1 2.5 0.4 4.3 1.6 2.2
2024 Revised 3.2 3.2 0.0 5.2 2.2 2.0
Previously published 3.0 2.9 -0.1 5.5 2.5 2.4
2023 Revised 2.0 3.1 1.0 4.3 0.1 2.2
Previously published 2.1 3.1 1.0 4.1 -0.1 2.0
Nonfinancial 2025 Revised 2.1 2.3 0.2 4.0 1.3 1.9
corporate Previously published 2.9 3.1 0.2 4.4 1.6 1.5
2024 Revised 2.4 2.3 -0.1 5.3 2.3 2.8
Previously published 2.8 2.7 -0.1 5.5 2.5 2.6
2023 Revised 1.1 2.3 1.2 4.5 0.4 3.4
Previously published 0.5 1.8 1.2 4.3 0.2 3.7
Manufacturing 2025 Revised 1.8 1.0 -0.9 4.4 1.6 2.5
Previously published 1.8 1.0 -0.9 4.3 1.5 2.4
2024 Revised 0.3 -0.9 -1.2 5.1 2.1 4.8
Previously published 0.3 -0.9 -1.2 5.0 2.0 4.7
2023 Revised -0.4 -0.4 0.0 4.6 0.4 5.0
Previously published -0.4 -0.4 0.0 4.1 0.0 4.5
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United States Department of Labor
