The Labor Department says productivity increased at a 3 per cent annual rate in the third quarter. That's up from an initial estimate of 1.9 per cent and much stronger than the 1.8 per cent rate from April through June.
Productivity rose because economic growth was much stronger than previously estimated in the third quarter. Productivity is the amount of output per hour of work.
Labour costs fell in the third quarter, evidence that inflation will remain low.
Higher productivity enables companies to pay employees more without sparking inflation. But greater productivity can also slow hiring if it shows companies don't need more workers to boost output.