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%.