Story · United States · Published 3 Sept 2026, 12:49
Productivity increases 1.4% in Q2 2026; unit labor costs increase 1.2% (annualized rates)
U.S. nonfarm business labour productivity rose 1.4% in the second quarter of 2026, while unit labour costs rose 1.2%.
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1.2%
Unit labour costs
1.4%
Nonfarm business productivity
2.6%
Hourly compensation
Exam link: Productivity growth can raise an economy's productive capacity and living standards.
Understand the storyExpand Close
The U.S. Bureau of Labor Statistics reported that nonfarm business labour productivity rose 1.4% in the second quarter of 2026. Unit labour costs rose 1.2%, while hourly compensation rose 2.6%.
What happened
Nonfarm business output per hour rose 1.4% in the latest quarter. Unit labour costs rose 1.2%, reflecting an hourly-compensation movement of 2.6% alongside the productivity change.
Why it matters
Productivity growth can raise an economy's productive capacity and living standards. It can also offset wage growth in firms' unit labour costs, reducing inflationary pressure for a given increase in compensation.
Economic context
For A-Level Economics, this is current evidence for productivity, supply-side performance and cost pressures. Link productivity to long-run aggregate supply, competitiveness, real wages and the scope for non-inflationary growth.
All key dataExpand Close
- Unit labour costs
- 1.2%
- Hourly compensation
- 2.6%
- Nonfarm business productivity
- 1.4%
Terms explainedExpand Close
Annualised rate
The current monthly or quarterly pace expressed as if it continued for a full year. It is not the same as the actual total for the year.
Use it in an examExpand Close
Evidence
U.S. nonfarm business labour productivity rose 1.4% in the second quarter of 2026, while unit labour costs rose 1.2%.
Explain
Productivity growth can raise an economy's productive capacity and living standards. It can also offset wage growth in firms' unit labour costs, reducing inflationary pressure for a given increase in compensation.
Evaluate
For A-Level Economics, this is current evidence for productivity, supply-side performance and cost pressures. Link productivity to long-run aggregate supply, competitiveness, real wages and the scope for non-inflationary growth.
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