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07.05.202612:30:00UTC+00US Unit Labor Cost Growth Cools Sharply in Q1 2026

Unit labor cost growth in the United States slowed markedly in the first quarter of 2026, easing to 2.3% quarter-over-quarter from 4.4% in the fourth quarter of 2025. The data, updated on 7 May 2026, point to a significant moderation in labor cost pressures at the start of the year.

The quarter-over-quarter comparison shows that while labor costs are still rising, the pace of increase has nearly halved compared with the previous period. The earlier 4.4% gain in Q4 2025 reflected a much stronger build-up in costs relative to the quarter before, whereas the latest 2.3% reading indicates a more tempered trajectory.

This deceleration in unit labor costs will be closely watched by markets and policymakers, as it can influence corporate profit margins, wage dynamics, and the broader inflation outlook in the quarters ahead.

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