Preliminary data showed hourly compensation rose 2.7% and productivity gained 1.4% in the nonfarm business sector, while manufacturing labor costs were flat as wage and productivity growth matched.
U.S. unit labor costs, a measure of labor expense per unit of output, rose 1.3% in the nonfarm business sector in Q2 2026, matching the revised Q1 pace but coming in below market forecasts of 2.1%, preliminary data showed. The increase was driven by a 2.7% rise in hourly compensation alongside a 1.4% gain in productivity. Manufacturing was steadier, with unit labor costs unchanged because a 1.9% increase in hourly compensation was fully offset by a 1.9% increase in productivity. On an annual basis, nonfarm labor costs rose 1.4%, while manufacturing unit labor costs advanced 3.5%.