Unit labor costs in the US nonfarm business sector increased 1.2% in the second quarter of 2026, slightly below the preliminary estimate of 1.3% and down from a 1.3% increase in the first quarter. Hourly compensation rose 2.6%, accelerating from a 2.1% increase in the previous quarter, while labor productivity grew 1.4%, up from 0.8%. In the total manufacturing sector, unit labor costs fell 0.3%, as hourly compensation increased 2.1% while labor productivity rose 2.4%. This marked the first quarterly decline in manufacturing unit labor costs since the second quarter of 2021. On a year-over-year basis, unit labor costs in the nonfarm business sector increased 1.4%, while manufacturing unit labor costs rose 3.4%.