Nonfarm productivity rose 1.4% SAAR in Q2. Labor share hit a series low.

Nonfarm business labor productivity increased 1.4 percent SAAR in the second quarter of 2026 as output rose 1.7 percent and hours worked rose 0.3 percent. Unit labor costs rose 1.2 percent, and labor share fell to 52.8 percent — the lowest in a series beginning Q1 1947.

The U.S. Bureau of Labor Statistics published that revised print at 8:30 a.m. ET on Thursday, September 3, 2026, as Productivity and Costs, Second Quarter 2026, Revised (USDL 26-1434). From the same quarter a year ago, nonfarm business productivity increased 2.2 percent.

Unit labor costs in the nonfarm business sector increased 1.2 percent, reflecting a 2.6-percent increase in hourly compensation and the 1.4-percent rise in productivity. Real hourly compensation, which adjusts for consumer prices, decreased 3.3 percent in the quarter and decreased 0.1 percent over the last four quarters.

Labor share at a series low

The labor share — the percentage of output that accrues to workers as compensation — was 52.8 percent in the second quarter of 2026. BLS said that is the lowest level in the series, which begins in the first quarter of 1947.

That line is why a page with an unrevised nonfarm productivity headline still carries weight. Productivity, output, and hours worked were not revised at the displayed precision for either the annualized one-quarter or four-quarter growth rates. Unit labor costs were revised: they increased 1.2 percent rather than the previously reported 1.3 percent, reflecting a 0.1-percentage point downward revision to hourly compensation.

Manufacturing revised higher; unit labor costs fell

Manufacturing sector labor productivity increased 2.4 percent, as output increased 5.4 percent and hours worked increased 2.9 percent. That productivity figure was revised up 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. BLS said the manufacturing output increase is the largest since the second quarter of 2021.

Unit labor costs in total manufacturing decreased 0.3 percent — the first decline since the second quarter of 2021, when the measure also fell 0.3 percent. Over the last four quarters, manufacturing unit labor costs increased 3.4 percent.

In durable manufacturing, productivity increased 3.6 percent (output +8.9 percent; hours +5.1 percent). Nondurable manufacturing productivity increased 2.1 percent (output +1.4 percent; hours −0.6 percent). From a year earlier, total manufacturing productivity increased 1.1 percent.

BLS notes that manufacturing output concepts and methods differ from the business and nonfarm business series; the output measures are not directly comparable.

Nonfinancial corporations: preliminary profits print

Preliminary measures for the nonfinancial corporate sector show productivity up 2.2 percent in the second quarter (output +3.9 percent; hours +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 — 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.

November carries the next preliminary

The preliminary Productivity and Costs news release for third-quarter 2026 is scheduled for Thursday, November 5, 2026, at 8:30 a.m. ET. This release does not include a market-reaction print, a Federal Reserve implication, or an unnamed consensus comparison. It is not the Census and BEA July goods-and-services trade release that also published today.