U.S. Q1 2026 worker productivity revised sharply lower

Nonfarm concern assemblage labour productivity grew astatine an annualized complaint of 0.3% successful the archetypal 4th of 2026, the Bureau of Labor Statistics said Thursday, a larger-than-expected downward revision from the preliminary estimation of 0.8%.

Output maturation was the main origin down the revision, falling to 1.0% from the anterior estimation of 1.5%, portion hours worked held dependable astatine 0.7%. A Reuters survey of economists had placed the expected revision astatine a 0.5% rate.

The first-quarter speechmaking for nonfarm concern portion labour costs came successful astatine a 1.8% annualized rate, trimmed from an earlier estimation of 2.3%. Hourly compensation accrued 2.1% successful the quarter. The effect fell good abbreviated of the 2.5% complaint that economists surveyed by Reuters had anticipated.

For the 4th fourth of 2025, portion labour costs were marked down sharply, to 2.1% from an archetypal fig of 4.6%. Nonfarm concern productivity successful that 4th was unrevised astatine 1.6%.

Measured from a twelvemonth earlier, nonfarm concern productivity grew 2.8% successful the archetypal quarter. Since the 4th fourth of 2019, productivity has grown astatine an annualized complaint of 2.1%, matching the semipermanent complaint recorded since the archetypal 4th of 1947, the bureau said.

Real hourly compensation, which accounts for user prices, fell 1.4% successful the archetypal quarter. The labour stock — the information of output that goes to workers arsenic compensation — stood astatine 53.7% successful the archetypal quarter, the lowest recorded worth since the bureau began tracking the bid successful 1947.

In the manufacturing sector, productivity grew 3.2% successful the archetypal quarter, revised down from an archetypal estimation of 3.6%. Durable manufacturing productivity roseate 5.5%, portion nondurable manufacturing productivity accrued 0.9%.

Underlying the productivity revision was a broader slowdown successful economical output: GDP expanded astatine a 1.6% yearly complaint successful the archetypal 4th aft an archetypal speechmaking of 2.0%. That GDP revision was driven by weaker concern and user spending, the Bureau of Economic Analysis said. The softness successful first-quarter output underpinned the productivity revision, the bureau noted.

The Bureau of Labor Statistics is scheduled to merchandise preliminary second-quarter 2026 productivity and costs information connected Aug. 6, 2026.