WASHINGTON — US workers were more productive this summer than initially thought, while costing their companies less.
The Labor Department said Wednesday that productivity grew at an annual rate of 2.9 percent from July through September. That’s the fastest pace in two years and higher than the initial estimate of 1.9 percent. Labor costs dropped at a rate of 1.9 percent, more than the 0.1 percent dip initially estimated.
Productivity was revised higher because economic growth was faster in the third quarter than first estimated, while hours worked were unchanged. Productivity is the amount of output per hour of work.
The report suggests companies are finding ways to squeeze more out of their existing workers.
While that’s a good sign for corporate profits, it can be discouraging for people who want a job.
Still, the trend in productivity has been fairly weak. It has grown only 1.7 percent compared with a year ago. That’s half the average growth that companies saw in 2009 and 2010.
So companies may ultimately need to hire more workers if they see only modest gains in productivity and more demand.