US nonfarm business sector labor productivity rose by 0.8% in the first quarter of 2026, a slowdown from the revised 1.6% increase in the previous quarter and below market expectations of 1.4%, according to preliminary estimates. Output grew by 1.5% (vs. 1.3% in Q4 2025), while hours worked increased by 0.7% after a 0.2% decline. In the manufacturing sector, productivity surged by 3.6%, driven by a 3.3% rise in output and a 0.4% reduction in hours worked. Durable manufacturing saw a 5.3% productivity gain, with output up 5.4% and hours worked rising slightly by 0.1%. Meanwhile, nondurable manufacturing productivity increased by 2.0%, as output grew by 0.9% and hours worked fell by 1.0%. Annually, US productivity rose by 2.9% in Q1 2026, the largest increase since Q3 2024, with output up 3.3% and hours worked increasing by 0.4%.