FX.co ★ US Labor Costs Rise Less Than Initially Thought

Unit labor costs in the US nonfarm business sector increased by 1.8% in Q1 2026, easing from a downwardly revised 2.1% gain in Q4 2025 and coming in below the preliminary estimate of 2.3%. The slowdown was driven by a moderation in hourly compensation, which rose 2.1% after a 3.7% increase in the previous quarter, while productivity advanced just 0.3%, following a 1.6% gain in Q4. In the manufacturing sector, unit labor costs climbed 2.2%, reflecting a 5.5% jump in hourly compensation and a 3.2% increase in productivity. On a year-over-year basis, unit labor costs edged up 0.5%.