Labor productivity increases at fastest pace in a year

Labor productivity rose at its fastest pace in a year in the third quarter, according to data released Nov. 5 by the U.S. Bureau of Labor Statistics. Output per hour in nonfarm businesses increased at a 3.6% annualized rate after a revised 2.1% in the previous quarter. Unit labor costs fell 0.7%, the first decline since the second quarter of 2025. The report links efficiency gains to capital spending, noting that companies have invested heavily in artificial intelligence, software, and equipment. It also showed nonfarm business output—excluding government spending—up 3.7% annualized. Weekly job-market signals were supported by a separate Nov. 5 report showing initial unemployment benefit applications fell to the lowest level since 1969. Worker compensation, adjusted for inflation, rose 1.1%, while the labor share of income fell to 53% in the third quarter of 2026.