Transmission of material in this release is embargoed until USDL 26-0686
8:30 a.m. (ET) Thursday, May 7, 2026
Technical information: (202) 691-5606 • Productivity@bls.gov • www.bls.gov/productivity
Media contact: (202) 691-5902 • PressOffice@bls.gov
PRODUCTIVITY AND COSTS
First Quarter 2026, Preliminary
Nonfarm business sector labor productivity increased 0.8 percent in the first quarter of 2026, the U.S.
Bureau of Labor Statistics reported today, as output increased 1.5 percent and hours worked increased
0.7 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 2.9 percent in
the first quarter of 2026. (See tables A1 and 2.)
Unit labor costs in the nonfarm business sector increased 2.3 percent in the first quarter of 2026,
reflecting a 3.1-percent increase in hourly compensation and a 0.8-percent increase in productivity. Unit
labor costs increased 1.2 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 0.5 percent in the first
quarter of 2026, and increased 1.4 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 54.1 percent in the first
quarter of 2026, the lowest recorded value since the series began in 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, 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 just below the long-term rate of 2.2
percent since the first quarter of 1947.
Manufacturing sector labor productivity increased 3.6 percent in the first quarter of 2026, as output
increased 3.3 percent and hours worked decreased 0.4 percent. In the durable manufacturing sector,
productivity increased 5.3 percent, reflecting a 5.4-percent increase in output and a 0.1-percent increase
in hours worked. Nondurable manufacturing sector productivity increased 2.0 percent, as output
increased 0.9 percent and hours worked decreased 1.0 percent. Total manufacturing sector productivity
increased 1.7 percent from the same quarter a year ago. (See tables A1, 3, 4, and 5.)
Unit labor costs in the total manufacturing sector increased 2.4 percent in the first quarter of 2026,
reflecting a 6.1-percent increase in hourly compensation and a 3.6-percent increase in productivity.
Manufacturing unit labor costs increased 3.7 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, as output has increased 0.1 percent and hours worked have declined 0.4 percent.
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 fourth-quarter and annual 2025 measures were announced today for the nonfinancial
corporate sector. Productivity increased 5.4 percent in the fourth quarter of 2025, as output increased
4.6 percent and hours worked decreased 0.7 percent. In 2025, nonfinancial corporate sector annual
productivity increased 2.9 percent. (See tables A2 and C1).
Revised measures
Hours and related measures--including labor productivity and hourly compensation--for all sectors were
revised to incorporate updated ratios of hours worked to hours paid by detailed industry, provided by the
BLS National Compensation Survey; indexes were subject to revision back to 2017. Measures of real
hourly compensation for all sectors were also subject to revision from 2021 onward due to the
incorporation of the revised Consumer Price Index Retroactive Series. Fourth quarter and annual average
data for 2025 were revised to incorporate regular updates of source data on output and compensation
published by the Department of Commerce on April 9, 2026. Manufacturing sector output for the fourth
quarter of 2025 reflects revisions published by the Board of Governors of the Federal Reserve System on
April 16, 2026.
Table B1 presents previous and revised productivity and related measures for the business, nonfarm
business, and manufacturing sectors for the fourth quarter of 2025.
Nonfarm business sector productivity in the fourth quarter of 2025 increased 1.6 percent rather than
the previous estimate of 1.8 percent, reflecting a 0.2-percentage point downward revision to output;
hours worked were not revised. Unit labor costs were revised up 0.2 percentage point to an increase of
4.6 percent.
Manufacturing sector productivity was revised down 0.7 percentage point to a decrease of 3.2 percent
in the fourth quarter of 2025, reflecting a 0.6-percentage point downward revision to output; hours
worked were not revised. Durable manufacturing sector productivity was revised down 0.2 percentage
point to a decrease of 3.5 percent and nondurable manufacturing sector productivity was revised down
1.1 percentage points to a decrease of 2.3 percent. (See table B1.)
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 first-quarter 2026 is scheduled to be released
on Thursday, June 4, 2026, at 8:30 a.m. (ET).
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Table A1. Labor productivity growth and related measures – preliminary first-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
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business Previous quarter 0.8 1.5 0.7 3.1 -0.5 2.3
A year ago 2.9 3.3 0.4 4.2 1.4 1.2
Business Previous quarter 0.6 1.4 0.9 2.9 -0.6 2.3
A year ago 2.9 3.4 0.4 4.1 1.4 1.2
Manufacturing Previous quarter 3.6 3.3 -0.4 6.1 2.5 2.4
A Year ago 1.7 1.3 -0.4 5.5 2.7 3.7
Durable Previous quarter 5.3 5.4 0.1 7.7 4.0 2.3
manufacturing A year ago 2.9 2.7 -0.2 6.4 3.6 3.4
Nondurable Previous quarter 2.0 0.9 -1.0 2.9 -0.6 0.9
manufacturing A year ago 0.5 -0.2 -0.7 3.8 1.0 3.2
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Table A2. Labor productivity growth and related measures – preliminary fourth-quarter 2025
(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
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial Previous quarter 5.4 4.6 -0.7 6.2 3.6 0.8
corporate A year ago 3.8 3.8 0.0 5.2 2.4 1.3
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Table B1. Labor productivity growth and related measures – revised fourth-quarter 2025
(percent change from previous quarter at annual rate)
Labor Hours Hourly Real hourly Unit labor
Sector productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfarm business Revised 1.6 1.3 -0.2 6.3 3.7 4.6
Previously published 1.8 1.5 -0.2 6.3 3.7 4.4
Business Revised 1.6 1.5 -0.1 6.2 3.6 4.5
Previously published 1.8 1.7 -0.1 6.2 3.6 4.3
Manufacturing Revised -3.2 -3.4 -0.3 6.3 3.7 9.8
Previously published -2.5 -2.8 -0.3 6.3 3.7 9.1
Durable Revised -3.5 -2.7 0.7 6.3 3.6 10.1
manufacturing Previously published -3.3 -2.6 0.7 6.3 3.7 9.9
Nondurable Revised -2.3 -4.2 -1.9 6.0 3.4 8.6
manufacturing Previously published -1.2 -3.1 -1.9 6.0 3.4 7.3
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Table C1. Labor productivity growth and related measures – annual average changes: 2021-2025
Labor Hours Hourly Real hourly Unit labor
Sector Year productivity Output worked compensation compensation costs
-------------------------------------------------------------------------------------------------------------------------
Nonfinancial 2025 2.9 3.2 0.2 4.5 1.7 1.5
corporate 2024 2.8 2.7 -0.1 5.5 2.5 2.6
2023 0.5 1.8 1.2 4.3 0.2 3.7
2022 -0.5 3.7 4.2 4.1 -3.7 4.6
2021 4.5 9.7 5.0 5.0 0.1 0.5
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United States Department of Labor
