Updated: 03-Sep-26 09:33 ET
| Q2 Productivity-Prel |
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| Updated: 03-Sep-26 09:33 ET |
Highlights
- Q2 productivity increased 1.4%, unchanged from the advance estimate and as expected.
- Unit labor costs, though, were revised down to 1.2% (Briefing.com consensus: 1.3%) from 1.3% in the advance estimate.
Key Factors
- The increase in productivity was the result of output increasing 1.7% and hours worked increasing 0.3%. From the same quarter a year ago, nonfarm business sector labor productivity increased 2.2%.
- The increase in unit labor costs stemmed from a 2.6% increase in hourly compensation and a 1.4% increase in productivity.
- Manufacturing sector labor productivity increased 2.4%, as output increased 5.4% and hours worked increased 2.9%. Unit labor costs in the total manufacturing sector decreased 0.3%, as a 2.1% increase in hourly compensation was offset by a 2.4% increase in productivity.
Big Picture
- The key takeaway from the report is that the downtick in unit labor costs from the advance estimate helped keep inflation concerns in check.
| Category | Q2 | Q1 | Q4 | Q3 | Q2 |
| Nonfarm Business Sector | |||||
| Productivity Q/Q | 1.4% | 0.8% | 1.6% | 5.2% | 4.2% |
| Unit Labor Costs Q/Q | 1.2% | 1.3% | 2.1% | 1.0% | -2.9% |
| Productivity Y/Y | 2.1% | 3.0% | 2.5% | 2.6% | 2.1% |
| Unit Labor Costs Y/Y | 1.4% | 0.3% | 1.8% | 2.0% | 2.1% |