U.S. labor productivity rises 3.6% annualized in Q3 as unit labor costs fall
Nonfarm business productivity rose 3.6% at an annualized rate in Q3, while unit labor costs fell 0.7% and labor share reached a series low of 53.0%.
U.S. nonfarm business labor productivity increased 3.6% at an annualized rate in the third quarter of 2026, while output rose 3.7% and hours worked increased 0.1%, according to the preliminary release from the Bureau of Labor Statistics on November 5.
Productivity gain outpaced compensation growth
Unit labor costs decreased 0.7% in the quarter because hourly compensation rose 2.9% while productivity increased 3.6%. Over the four quarters through Q3, unit labor costs were up 2.4%.
Real hourly compensation increased 1.1% in the quarter and 1.0% over the last four quarters. The labor share, the portion of output accruing to workers as compensation, was 53.0%, the lowest reading in the series that begins in the first quarter of 1947.
Manufacturing was mixed
Manufacturing productivity increased 0.3% in the quarter. Durable-goods manufacturing productivity rose 2.2%, while nondurable manufacturing productivity fell 1.7%. Manufacturing unit labor costs increased 2.7% in the quarter and 4.0% over the last four quarters.
The figures are preliminary and incorporate the 2026 annual update to national accounts data. BLS said the release includes revisions to several measures back to 2021.
Labor productivity
+3.6%
↑ annualized Q3 quarter over quarter
Output
+3.7%
↑ annualized Q3 nonfarm business
Unit labor costs
-0.7%
↓ annualized Q3 nonfarm business
Labor share
53.0%
↓ series low series begins 1947
Sources
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