WASHINGTON – U.S. workers' productivity increased in the July-September quarter at a slightly faster pace than previously estimated while labor costs declined for a second straight quarter.
The Labor Department says productivity, the amount of output per hour of work, increased at an annual rate of 2.3 percent in the third quarter while labor costs fell at a rate of 1 percent.
In its first estimate, the government had put productivity growth at a slightly slower 2 percent and said labor costs had risen a tiny 0.2 percent. The strengthening of productivity growth combined with a faster drop in labor costs should reassure the Federal Reserve that there is little threat of unwanted inflation pressures harming economic growth any time soon.
Greater productivity is the key factor determining rising living standards.