US productivity jumps 3.6 percent as unit labour costs fall

US nonfarm business labour productivity rose 3.6 percent at an annualised rate in the third quarter of 2026, and unit labour costs fell 0.7 percent, the Bureau of Labor Statistics reported on Thursday.

Why it matters: Falling unit labour costs alongside a strong productivity print ease the cost pressure the Federal Reserve watches in the inflation pipeline, and second quarter productivity was revised up to 2.1 percent from 1.4 percent.

Data as of US Bureau of Labor Statistics news release USDL 26-1631, embargoed 8:30 a.m. ET on November 5, 2026 and read in full in this run; every figure is the release's own, seasonally adjusted annualised rates unless stated. Developing item.

US nonfarm business labour productivity increased 3.6 percent in the third quarter of 2026, as output rose 3.7 percent and hours worked rose 0.1 percent, the Bureau of Labor Statistics reported in its preliminary release on Thursday. Hourly compensation rose 2.9 percent and unit labour costs decreased 0.7 percent in the quarter, though they were still up 2.4 percent over the last four quarters.

The release also revised second quarter productivity up 0.7 percentage point to an increase of 2.1 percent, from 1.4 percent previously published, on an upward revision to output. Manufacturing productivity rose just 0.3 percent in the third quarter, and manufacturing unit labour costs increased 2.7 percent.

US productivity jumps 3.6 percent as unit labour costs fall

Sources