WASHINGTON — U.S. nonfarm productivity increased 1.9% in the third quarter while business unit labor costs unexpectedly declined 0.1%, the Labor Department reported Thursday.
Unit labor costs slipped as productivity outpaced hourly compensation. Hourly compensation rose 1.8% for the quarter ending Sept. 30 to post the largest increase in a year.
Economists expected productivity to rise 0.9% and unit labor costs to fall 0.7%.
Increases in hourly compensation tend to boost unit labor costs and productivity gains tend to reduce them.
Productivity fell 1.8% in the second quarter and increased 3.9% in the first quarter of this year. Unit labor costs increased 1.3% in the second quarter and fell 4.6% in the first quarter. For the year ending Sept. 30, productivity was up 2.5% and unit labor costs were down 1.9%.