3Q Productivity Revised Upward to 2.3%

U.S. workers’ productivity rose at a 2.3% annual rate in the third quarter, higher than previously estimated, the Labor Department said Wednesday.

The level was higher than the 1.9% reported in early November and followed a 1.8% downturn in the second quarter, which had been the biggest drop in almost four years.

Productivity is a measure of how much an employee produces for every hour of work.

The reading matched economists’ forecasts, Bloomberg reported. Labor costs rose fell at a 0.1% rate, less than the 0.2% decrease that was forecast.

Among manufacturers, productivity rose 0.6%, after rising 5.6% in the second quarter.

When worker efficiency improves at a slower pace and labor becomes more expensive, companies may raise prices in order to guard their profits, contributing to more rapid inflation.