MORE PRODUCTIVE, CHEAPER WORK FORCE: U.S. worker productivity grew at an annual rate of 2.9 percent, faster than the initial estimate of 1.9 percent. Labor costs fell at an annual rate of 1.9 percent, a bigger drop than the 0.1 percent dip initially estimated.
THE REVISION: Productivity was revised higher because economic growth was stronger in the third quarter than first estimated, while hours worked were unchanged. Productivity is the amount of output per hour of work.
TREND STILL WEAK: Productivity is up just 1.7 percent over the past year, below the long-run average of 2.2 percent. Productivity is expected to remain modest next year, as companies reach the limits on the amount of work they can squeeze out of their existing work forces.