Q2 2026 Labor Productivty Report-Workers More Productive but Share of Economy Declines (Jack and Jill Pay for Coffee)

This labor productivity report for the second quarter of 2026 shows that labor productivity is up a little. Unit costs have increased, and labor costs have increased a little bit. Real hourly compensation declined 3.3%, and the labor share of the market declined to 52.8%, which is one of the lowest levels since 1947.

(Illustrative Only)
Jack and Jill
can't figure out 
why he has to 
keep working into
his 70's to retire, 
they struggle to pay their 
bills, despite working 
most of his life. 
He did lose his
job a few times
when the investors
 decided they wanted
to move operations
overseas where
they could make more
money. 
They make in an hour
what he makes in a year.
He thinks
about why. 

20 Year Dashboard
*Meant to encourage
thought and
agreement/disagreement.

So, we haven't made much progress in terms of rebalancing the economy to ensure maximum participation and opportunity across all elements of the economy. Some have argued we have overconcentration of wealth and an overconcentration of decision-making that supports that overconcentration of wealth (It is ok to disagree or agree. The point is thinking about it.)

Corporate profits are up significantly, and there is certainly nothing wrong with that as long as everyone else in the economy is also getting opportunities and continuing to grow. However, this divide seems to be growing more and more, and we don't really have a clear plan for how we're going to deal with it. So, we'll just have to see how it turns out in the long run.

 U.S. Labor Productivity Increased in the Second Quarter of 2026

• Nonfarm business labor productivity increased 1.4% in the second quarter of 2026, while output increased 1.7% and hours worked increased 0.3%.
• Compared with the second quarter of 2025, nonfarm productivity increased 2.2%, indicating continued year-over-year productivity growth.
• Unit labor costs increased 1.2% in the second quarter, reflecting a 2.6% increase in hourly compensation and a 1.4% increase in productivity.
• Real hourly compensation decreased 3.3% during the quarter, while the labor share of output fell to 52.8%, the lowest level in the series beginning in 1947.
• Manufacturing productivity increased 2.4%, with durable manufacturing increasing 3.6%. Manufacturing unit labor costs declined 0.3%, the first quarterly decline since the second quarter of 2021.
• Over the current business cycle, beginning in the fourth quarter of 2019, nonfarm productivity has grown at an annualized rate of 2.1%, matching the long-term rate since 1947.

U.S. Bureau of Labor Statistics. (2026, September 3). Productivity and costs, second quarter 2026, revised. U.S. Department of Labor. https://www.bls.gov/news.release/prod2.nr0.htm