Workers in U.S. nonfarm businesses produced 2.8 percent more per hour in the first quarter of 2026 than a year earlier, while inflation-adjusted hourly compensation rose 0.6 percent. Labor’s share of output fell to 53.7 percent, the lowest level recorded since 1947, according to the Bureau of Labor Statistics’ June 4 report.
The latest quarterly improvement in productivity was much smaller. Output per hour rose at an annual rate of 0.3 percent, revised down from an initial estimate of 0.8 percent. Businesses increased output at a 1 percent rate while hours worked rose 0.7 percent.
Since late 2019, productivity growth averaged 2.1 percent a year, above the previous business cycle’s 1.5 percent. That measure divides output by hours worked; it can rise when companies add equipment as well as when employees work more efficiently.
A separate BLS report released in March includes changes in capital, such as equipment and buildings, alongside labor. This measure, called total factor productivity, grew 0.8 percent in private nonfarm businesses during 2025. Output rose 2.6 percent, while combined capital and labor inputs increased 1.7 percent.
