Third-Quarter Productivity Improves

U.S. workers’ productivity rose 1.9% in the third quarter, the Labor Department said Thursday.

The increase 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.

Economists had forecast a 1% gain for the third quarter, Bloomberg reported. Labor costs rose fell at a 0.1% rate, less than the 0.6% increase forecast.

Among manufacturers, productivity rose 0.4%, after rising 5.4% 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.