Stronger-than-expected productivity growth outpaced wage gains, leaving workers with a smaller share of output and real weekly earnings essentially flat in the first half of 2026 despite a June rebound.
U.S. workers' share of the economy fell again in the second quarter, with the Bureau of Labor Statistics reporting that labor share of nominal gross domestic product (the portion of output paid to workers) dropped to 52.9% from 53.7% in the first quarter. BLS said that was the lowest reading since the series began in 1947 and came alongside stronger-than-expected productivity growth, underscoring how output gains are outpacing wage growth. The decline extends a decades-long trend tied to weaker organized labor and globalization, which shifted relatively high-paying manufacturing jobs to lower-cost overseas centers. More recently, automation and potentially artificial intelligence have allowed companies to raise output without adding much headcount, meaning more of the benefits from productivity gains are flowing to business owners and shareholders rather than workers. Real weekly earnings, which track wages against inflation, were essentially unchanged during the first half of 2026, although June ended three straight months of declines and posted the strongest reading in six years.