Washington, DC, December 7-- Productivity grew at a seasonally adjusted annual rate of 1.8% in the third quarter, down from the initial estimate of 1.9%, for the lowest rate since the fourth quarter of 2002, according to a Labor Department.
The adjusted figure also marked a slowing from the 3.9% productivity pace logged in the second quarter.
In year-on-year terms, the growth rate was 3.1%.
Productivity growth typically increases prosperity in the long run by allowing businesses to raise wages without heightening the danger of inflation. But in the last few years, it has mainly allowed employers to make do with fewer workers.
The economy has grown steadily for three years but the payrolls of U.S. employers remain leaner than they were before the 2001 recession.
The deceleration in worker efficiency, however, raised some hope that employers who have squeezed much out of their existing work forces may seek to boost hiring as a way to meet customer demand.
The third-quarter productivity slowdown reflected a surge in workers hours that was not accompanied by an acceleration in the growth of output. For non-farm workers, output grew 4.2% in the third quarter, the same rate as in the second quarter. But workers' hours rose 2.4%, the biggest increase in five years.
Unit-labor costs rose 1.8%, up from the government's initial estimate of a 1.6% increase. Hourly compensation, adjusted for inflation, rose 1.8%, compared with a 1.1% increase in the second quarter.
Manufacturers of nondurable goods enjoyed the biggest productivity gains during the third quarter. Labor productivity among such companies increased 5.4%, slowing from an 8.7% rate in the second quarter. The overall manufacturing industry saw a productivity increase of 4.6%, slightly more than half the rate recorded in the second quarter.
