Productivity increases 1.4% in Q2 2026; unit labor costs increase 1.3% (annual rates)

Productivity rose 1.4% in Q2 2026 (nonfarm business), while unit labor costs increased 1.3% (seasonally adjusted annual rates), signaling costs are still rising. Manufacturing productivity gained 1.9% and unit labor costs were flat, a more favorable mix. Overall, the data is directionally mild for inflation and may modestly influence rate expectations.

Analysis

Productivity rose 1.4% in Q2 2026 (nonfarm business), while unit labor costs increased 1.3% (seasonally adjusted annual rates), signaling costs are still rising. Manufacturing productivity gained 1.9% and unit labor costs were flat, a more favorable mix. Overall, the data is directionally mild for inflation and may modestly influence rate expectations.