U.S. labor productivity accelerated growth in the second quarter, with companies showing results in cost reduction.

In the second quarter, U.S. labor productivity growth exceeded expectations, primarily because companies are seeking to alleviate the pressure of rising costs. Data released Thursday showed that non-farm productivity grew at an annualized rate of 1.4% in the second quarter, up from a revised 0.8% increase in the first quarter, and this result also surpassed the general market expectations. Meanwhile, unit labor costs rose by 1.3%, which was lower than anticipated. Federal Reserve officials, investors, and economists have been looking for signs to determine whether hundreds of billions of dollars in artificial intelligence investments are boosting labor productivity. However, due to the significant quarter-to-quarter fluctuations in official data, it will take time to observe a clear trend. Labor costs are one of the largest expenditures for many companies, and improving efficiency can allow wages to rise without fueling inflation. In the long run, increased productivity helps improve living standards, but some economists are concerned that if the productivity growth driven by AI persists, some companies may postpone hiring or even cut jobs. The productivity growth in the second quarter was aided by the strongest output growth since the third quarter of 2025, while the increase in employee working hours was relatively moderate.