US worker productivity grew 1.9 percent over the summer as output rose; labor costs fall

U.S. workers increased their productivity from July through September at the same modest pace as the previous three months. Steady gains in productivity could dissuade companies from ramping up hiring.

The Labor Department says productivity increased at a 1.9 percent annual rate in the third quarter, up slightly from a 1.8 percent rate in the previous quarter. The second quarter figure was lower than the 2.3 percent rate previously estimated.

Productivity measures the amount of output per hour worked. Greater productivity raises living standards because it enables companies to pay workers more without spurring inflation. But it can also show that companies are getting sufficient gains from their existing workforces and needn't add more employees.

Labor costs fell in the third quarter, a sign that inflation will remains mild.