FX.co ★ US Q3 Productivity Stronger than Anticipated

Labor productivity in the US nonfarm business sector rose 3.6% in the third quarter of 2026, the strongest increase since Q3 2025 and well above market expectations of a 2.8% gain. The result also represented an acceleration from the upwardly revised 2.1% increase recorded in the second quarter.

The improvement largely reflected a 3.7% rise in output, while hours worked edged up just 0.1%, indicating stronger production relative to labor input.

In the manufacturing sector, productivity advanced 0.3%. A 2.2% gain in durable goods productivity was partly offset by a 1.7% decline in nondurable goods. In durable goods industries, productivity benefited from a 3.8% increase in output alongside a 1.6% rise in hours worked. By contrast, nondurable goods output fell 1.6%, while hours worked increased 0.1%.

On a year-over-year basis, nonfarm business productivity increased 2.1% in the third quarter.