Unit labor costs in the US nonfarm business sector rose by 1.2% in the second quarter of 2026, slightly below the preliminary estimate of 1.3% and easing from a 1.3% increase in the first quarter. Hourly compensation grew 2.6%, an acceleration from the 2.1% gain recorded in the previous quarter, while labor productivity advanced 1.4%, up from 0.8%.
In the total manufacturing sector, unit labor costs declined 0.3%, as hourly compensation increased 2.1% and labor productivity rose 2.4%. This was the first quarterly decrease in manufacturing unit labor costs since the second quarter of 2021. On a year-over-year basis, unit labor costs in the nonfarm business sector increased 1.4%, while manufacturing unit labor costs were up 3.4%.
