FX.co ★ US Labor Costs Rise Less than Anticipated

Unit labor costs in the US nonfarm business sector increased by 1.3% in Q2 2026, matching the revised pace from Q1 but falling short of market expectations for a 2.1% rise, according to preliminary estimates. The gain reflected a 2.7% increase in hourly compensation, accelerating from 2.1% in Q1, combined with a 1.4% improvement in productivity, up from 0.8% in the previous quarter. In the manufacturing sector, unit labor costs were flat, as a 1.9% rise in hourly compensation was fully offset by a 1.9% increase in productivity. Year over year, nonfarm unit labor costs grew by 1.4%, while manufacturing unit labor costs climbed 3.5%.