December 3, 2008 8:45 AM, EST

Productivity Rises More Than Forecast

Third-quarter U.S. worker productivity rose 1.3% in the third quarter, the Labor Department said Wednesday, more than a previous estimate.

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

Economists had forecast a rise of 0.9% for the quarter, Bloomberg reported.

Labor costs rose at a rate of 2.8%, less than the 3.6% increase forecast by economists.

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.