2026.05.0712:30:00UTC+00U.S. Nonfarm Productivity Growth Cools Sharply to 0.8% in Q1 2026

U.S. nonfarm productivity growth slowed markedly in the first quarter of 2026, easing to 0.8% quarter-over-quarter from 1.8% in the fourth quarter of 2025, according to data updated on 7 May 2026. The figures, measured on a quarter-over-quarter basis, show a clear loss of momentum after a stronger finish to 2025.

The comparison highlights that while productivity continued to rise, the pace of improvement in output per hour worked has nearly halved from the prior quarter. The “actual” reading for the first quarter of 2026 reflects the change from the previous quarter, whereas the earlier 1.8% figure for the fourth quarter of 2025 was measured against the third quarter of that year.

The softer productivity performance in early 2026 may have implications for both wage dynamics and corporate margins, as slower gains in efficiency can increase cost pressures if labor costs continue to rise. Investors and policymakers will be watching subsequent quarters to assess whether the first-quarter cooling is a temporary moderation or the start of a broader trend of weaker productivity growth in the U.S. nonfarm sector.