US Real Hourly Compensation Falls 3.1% in Q2 as Productivity Growth Holds at 1.4%
Updated
Updated · Indeed Hiring Lab · Aug 6
US Real Hourly Compensation Falls 3.1% in Q2 as Productivity Growth Holds at 1.4%
2 articles · Updated · Indeed Hiring Lab · Aug 6
Summary
Real hourly compensation dropped 3.1% in Q2 2026, the weakest reading since Q4 2022, extending Q1’s pattern of workers producing more without matching gains in pay.
Labor productivity rose 1.4% as nonfarm business output increased 1.7% while hours worked edged up just 0.3%, showing firms are generating more output from roughly the same labor input.
Workers’ share of output fell to 52.9% in Q2, the lowest level since 1947, reinforcing signs that the gains from higher productivity are flowing more to profits than wages and benefits.
Indeed said the trend could reflect efficiency gains, better worker allocation or early AI effects; most economists it surveyed expect AI to lift productivity, though 70% foresee only a modest-to-moderate boost.