• Prior quarter productivity 1.6% revise from 1.8%
• US Q1 productivity preliminary 0 8% versus 1.0% estimate.
• Unit labor costs preliminary 2.3% versus 2.6% expected. Prior quarter 4.6% revised up from 4.4%

Details from the BLS on Productivity for Q1

• Nonfarm business labor productivity rose +0.8% in Q1 2026, as output increased +1.5% and hours worked rose +0.7%.
• Year-over-year productivity in the nonfarm business sector increased +2.9%.
• Unit labor costs rose +2.3% in Q1, driven by a +3.1% increase in hourly compensation and partially offset by productivity gains.
• Unit labor costs over the last four quarters increased +1.2%.
• Real hourly compensation fell -0.5% in Q1, but was still +1.4% higher year-over-year.
• Labor share of output fell to 54.1%, the lowest level since records began in 1947.
• Since the start of the current business cycle in Q4 2019, nonfarm productivity has grown at an annualized +2.1% pace, above the prior cycle’s +1.5% rate and just below the long-term average of +2.2%.

Manufacturing Sector

• Manufacturing productivity increased +3.6% in Q1 2026 as output rose +3.3% and hours worked declined -0.4%.
• Durable goods manufacturing productivity jumped +5.3%, supported by +5.4% output growth.
• Nondurable manufacturing productivity increased +2.0%, with output up +0.9% and hours worked down -1.0%.
• Total manufacturing productivity was +1.7% higher than a year ago.
• Manufacturing unit labor costs increased +2.4% in Q1, reflecting a sharp +6.1% rise in hourly compensation.
• Over the last year, manufacturing unit labor costs climbed +3.7%.
• Since Q4 2019, manufacturing productivity has grown at an annualized +0.5% rate, above the prior cycle’s +0.1% pace, but still below the long-term average of +2.1%.

Productivity increasing is a positive for GDP. With output for the quarter increasing by 1.5% and hours worked increase by 0.7%, more product was produce in fewer hour. That is still good news despite the fact that it was less than expectations

This article was written by Greg Michalowski at investinglive.com.



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