Third-Quarter Productivity Rises

U.S. workers were more productive in the third quarter – helping to lift corporate profits and contributing to the economic recovery, the Labor Department said Thursday.

Productivity, which measures how much an employee produces per hour of work, rose at a 4% annual rate between July and September, Labor said.

The gain, combined with a revised increase of 1.7% in the second quarter, left productivity up 5.3% over the last 12 months – the largest gain since 1973.

Analysts said previous investments in technology are allowing companies increase output without increasing payrolls, Bloomberg reported.

Strong U.S. productivity is one of the thing the Federal Reserve pointed to Wednesday when it cut its benchmark interest rate by 50 basis points to 1.25% (Click here for related coverage.).

Another Labor Department report released Thursday showed that initial jobless claims fell 20,000 last week to 390,000. The four-year moving average, which smoothes out changes in the weekly statistic, rose to 402,000 from 401,750 the previous week.