Updated: 04-Jun-26 09:21 ET
| Q1 Productivity-Prel |
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| Updated: 04-Jun-26 09:21 ET |
Highlights
- First quarter productivity was revised down to 0.3% (Briefing.com consensus: 0.8%) from the preliminary estimate of 0.8%.
- Unit labor costs were revised down to 1.8% (Briefing.com consensus: 2.3%) from the preliminary estimate of 2.3%.
Key Factors
- The increase in productivity was the result of output increasing 1.0% and hours worked increasing 0.7%. From the same quarter a year ago, nonfarm business sector labor productivity increased 2.8%.
- The increase in unit labor costs stemmed from a 2.1% increase in hourly compensation and a 0.3% increase in productivity.
- Manufacturing sector labor productivity increased 3.2%, as output decreased 3.3% and hours worked saw no growth. Unit labor costs in the total manufacturing sector increased 2.2%, driven by a 5.5% increase in hourly compensation and a 3.2% increase in productivity.
Big Picture
- The key takeaway from the report is the understanding that productivity has picked up nicely from a year ago (+2.8%), while unit labor costs (+0.5%) have come down, tempering concerns about labor-based inflation pressures.
| Category | Q1 | Q4 | Q3 | Q2 | Q1 |
| Nonfarm Business Sector | |||||
| Productivity Q/Q | 0.3% | 1.6% | 5.2% | 4.2% | -0.9% |
| Unit Labor Costs Q/Q | 1.8% | 4.6% | 1.0% | -2.9% | 7.3% |
| Productivity Y/Y | 2.8% | 2.5% | 2.6% | 2.1% | 2.0% |
| Unit Labor Costs Y/Y | 0.5% | 2.4% | 2.0% | 2.1% | 3.1% |