Updated: 05-Nov-26 09:24 ET
Highlights
- Nonfarm business sector labor productivity increased 3.6% in the third quarter (Briefing.com consensus: 3.1%) following an upwardly revised 2.1% increase (from 1.4%) in the second quarter.
- Unit labor costs decreased 0.7% (Briefing.com consensus: 1.4%) following an upwardly revised 1.9% increase (from 1.2%) in the second quarter.
- The increase in productivity was the result of output increasing 3.7% and hours worked increasing 0.1%.
- From the same quarter a year ago, nonfarm business sector labor productivity increased 2.1%.
- The increase in unit labor costs stemmed from a 2.9% increase in hourly compensation and a 3.6% increase in productivity.
- Manufacturing sector labor productivity increased 0.3%, as output increased 1.3% and hours worked increased 1.0%. Unit labor costs in the total manufacturing sector increased 2.7%, with hourly compensation up 3.0% and labor productivity up 0.3%.
- The key takeaway from the report is that there has been a pickup in productivity that has curtailed labor cost inflation. That is a good combination for corporate earnings prospects.
| Category | Q3 | Q2 | Q1 | Q4 | Q3 |
| Nonfarm Business Sector | |||||
| Productivity Q/Q | 3.6% | 2.1% | 1.4% | 1.2% | 4.5% |
| Unit Labor Costs Q/Q | -0.7% | 1.9% | 3.7% | 4.7% | 0.1% |
| Productivity Y/Y | 2.1% | 2.2% | 2.8% | 2.5% | 2.9% |
| Unit Labor Costs Y/Y | 2.3% | 2.5% | 1.8% | 2.2% | 1.5% |
