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US non-farm productivity rises in Q3, output falls

The data was the latest in a series of indicators highlighting the worsening economic crisis that has translated into growing unemployment.

Productivity rose at a revised annual rate of 1.3 percent, stronger than the 0.9 percent rate that economists polled by Reuters had forecast.

The Labor Department initially estimated third-quarter productivity growth at 1.1 percent. Non-farm productivity expanded 3.6 percent in the second quarter.

Output fell a revised 1.9 percent in the third quarter, the biggest decline since the third quarter of 2001 when it plunged 2.9 percent.

Unit labor costs, a gauge of inflation and profit pressures closely watched by the Federal Reserve, rose a revised 2.8 percent in the third quarter after declining a revised 2.6 percent percent in the second quarter.

‘There is less upward pressure in the labor market. Employers are very cost conscious right now. They are managing costs aggressively. This shouldn’t be worrisome for inflation for some time,’ said Jonathan Basile, economist at Credit Suisse in New York.

The Labor Department previously estimated third-quarter unit labor costs rose 3.6 percent.

Manufacturing productivity dropped 2.7 percent in the third quarter, the largest quarterly decline since the data series started in the first quarter 1987.

Manufacturing output plunged 7.8 percent, the sharpest fall since the first quarter of 1991 when it dropped 8.0 percent.