US nonfarm business sector labor productivity rose 0.3% in Q1 2026, down from the preliminary estimate of 0.8% and below the 1.6% gain recorded in the previous quarter. This marks the smallest quarterly productivity increase in a year. The revision reflects output growth of 1.0% and a 0.7% increase in hours worked, compared with earlier estimates of 1.5% and 0.7%, respectively.
In the manufacturing sector, productivity climbed 3.2%, slightly below the previously reported 3.6%. This increase was driven by a 3.3% rise in output, while hours worked were unchanged.
Durable manufacturing productivity advanced 5.5%, in line with the preliminary estimate, supported by a 5.8% increase in output and a 0.3% gain in hours worked.
In contrast, nondurable manufacturing productivity rose just 0.9%, revised down from an initially reported 2.0%. Output edged up 0.5%, while hours worked declined 0.4%.
On an annual basis, US productivity increased 2.8%, slightly below the earlier estimate of 2.9% but still the strongest year-over-year gain since Q3 2024. The annual improvement reflects a 3.2% rise in output and a 0.4% increase in hours worked.
