Economy & Business
Labor Productivity Rose 3.6 Percent in the Third Quarter
BLS reported stronger nonfarm output per hour, lower quarterly unit labor costs and a record-low labor share in preliminary third-quarter estimates.
Output outpaced hours
Nonfarm business labor productivity increased at a 3.6 percent annual rate in the third quarter, the Bureau of Labor Statistics reported. Output rose 3.7 percent while hours worked increased 0.1 percent. Compared with the third quarter of 2025, productivity was 2.1 percent higher. The quarterly rates are seasonally adjusted and annualized, so they should not be read as literal three-month changes.
Labor costs moved lower for the quarter
Unit labor costs decreased at a 0.7 percent annual rate as hourly compensation increased 2.9 percent and productivity increased faster. Over four quarters, unit labor costs were up 2.4 percent. BLS defines the measure as hourly compensation divided by labor productivity, which makes the relationship between pay growth and output per hour central to interpreting the result.
Real compensation and labor share
Real hourly compensation increased 1.1 percent for the quarter and 1 percent over four quarters. BLS estimated the labor share of output at 53 percent, the lowest reading in a series beginning in 1947. That measure describes how output is divided in the aggregate; it does not show how income changed for every occupation, industry or household.
Manufacturing was uneven
Manufacturing productivity increased 0.3 percent. Durable manufacturing rose 2.2 percent, while nondurable manufacturing fell 1.7 percent. Manufacturing unit labor costs increased 2.7 percent for the quarter and 4 percent over four quarters. The agency cautions that manufacturing output measures use different concepts and methods from the broader business-sector series and are not directly comparable.
Preliminary data will be revised
The release incorporates the 2026 annual update to national income and product accounts and revised historical inputs. BLS also revised second-quarter nonfarm productivity upward to 2.1 percent. A revised third-quarter report is scheduled for December 8. Today's figures are useful evidence about current efficiency and cost trends, but their preliminary status should remain attached to any policy or market interpretation.
Primary evidence
Reporting note: This independently composed article is based on the linked primary records. Publication and event dates are stated separately. Agency claims are identified as such; an allegation, charge or scheduled event is not presented as a finding, conviction or completed event. Readers should consult the official record for amendments and later action.