US Labor Costs Rise More than Thought

Unit labor costs in the US nonfarm business sector increased by 2.3% in Q1 2026, less than market expectations of 2.6% and after an upwardly revised 4.6% rise in Q4, preliminary estimates showed. It reflects a 31% increase in hourly compensation and a 0.8% increase in productivity. In the manufacturing sector, unit labor costs rose 2.4%, reflecting a 6.1% increase in hourly compensation and a 3.6% increase in productivity. On an annual basis, nonfarm unit labor costs rose 1.2%, while manufacturing unit labor costs advanced 3.7%.

Unit labor costs in the US nonfarm business sector rose by 4.4% in Q4 2025, more than earlier estimates of 2.8% and after a 1% increase in Q3. It reflects a 6.3% increase in hourly compensation and a 1.8% increase in productivity. In the manufacturing sector, unit labor costs rose 9.1%, the most since the third quarter of 2022, reflecting a 6.3% increase in hourly compensation and a 2.5 decrease in productivity. On an annual basis, nonfarm unit labor costs rose 2.4%, while manufacturing unit labor costs advanced 2.9%. For 2025, unit labour costs rose 2.3% in the nonfarm business sector and 2.4% in the manufacturing sector.

Unit labor costs in the US nonfarm business sector rose by 2.8% in Q4 2025, more than market expectations of 2% and after a 1.8% fall in Q3, preliminary estimates showed. It reflects a 5.7% increase in hourly compensation and a 2.8% increase in productivity. In the manufacturing sector, unit labor costs rose 8.3%, the most since the third quarter of 2022, reflecting a 6.2% increase in hourly compensation and a 1.9 decrease in productivity. On an annual basis, nonfarm unit labor costs rose 1.3%, while manufacturing unit labor costs advanced 2.6%. For 2025, unit labour costs rose 1.9% in the nonfarm business sector and 2.3% in the manufacturing sector.