US Productivity Accelerates in Q2 2026, Beating Forecasts
US labor productivity rose at a 1.4% annualized rate in the second quarter, more than double the expected 0.6% increase, extending a five-quarter streak of gains.
US labor productivity posted a 1.4% annualized increase in Q2 2026, significantly exceeding the forecast of 0.6%. The reading follows an upwardly revised 0.8% rise in Q1, marking the fifth consecutive quarter of productivity gains.
Manufacturing productivity surged 1.9%, driven by a 4.6% jump in output — the strongest quarterly increase since Q4 2021.
However, the productivity gains were accompanied by a sharp 3.2% drop in inflation-adjusted worker compensation, the largest decline since Q4 2022. Unit labor costs rose just 1.3%, well below the 2.1% expected, suggesting subdued wage pressures.
Source: The Kobeissi Letter