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Nonfarm business sector labor productivity grew at an annualized rate of 0.3% in the first quarter of 2026, the Bureau of Labor Statistics said Thursday, a larger-than-expected downward revision from the preliminary estimate of 0.8%.
Output growth was the main factor behind the revision, falling to 1.0% from the prior estimate of 1.5%, while hours worked held steady at 0.7%. A Reuters survey of economists had placed the expected revision at a 0.5% rate.
The first-quarter reading for nonfarm business unit labor costs came in at a 1.8% annualized rate, trimmed from an earlier estimate of 2.3%. Hourly compensation increased 2.1% in the quarter. The result fell well short of the 2.5% rate that economists surveyed by Reuters had anticipated.
For the fourth quarter of 2025, unit labor costs were marked down sharply, to 2.1% from an initial figure of 4.6%. Nonfarm business productivity in that quarter was unrevised at 1.6%.
