U.S. worker productivity rebounded sharply in the third quarter as initially estimated, marking its quickest rate of growth in two years, but the trend remained weak.
The Labor Department said on Tuesday that nonfarm productivity, which measures hourly output per worker, rose at an unrevised 3.1 percent annual rate.
The increase ended three straight quarters of decline. Productivity fell at a 0.2 percent rate in the second quarter and was unchanged compared to the third quarter of 2015.
Economists had expected that productivity would revised up to a 3.3 percent rate in the third quarter. That expectation was based on data last week showing gross domestic product increased faster than previously reported in the third quarter.
The government revised GDP data to show the economy growing at a 3.2 percent pace in the third quarter instead of the 2.9 percent rate it had previously reported.
Output per worker in the third quarter jumped at a 3.6 percent rate, also the fastest pace since the third quarter of 2014. It was previously reported to have increased at a 3.4 percent pace. The increase marked an acceleration from the second quarter's 1.6 percent pace.
The increase in output came despite total hours worked rising only at a 0.5 percent rate in the third quarter, slowing from a 1.7 percent pace of increase in the second quarter. That reflected a drop in hours for the self-employed.
Unit labor costs, the price of labor per single unit of output, rose at an upwardly revised 0.7 percent pace in the third quarter. They were previously reported to have increased at a 0.3 percent rate.
Unit labor costs rose at a 3.0 percent rate compared to the same period of 2015. That was up from the 2.3 percent pace reported last month.
Hourly compensation per hour increased at a 3.8 percent rate in the third quarter rather than the 3.4 percent pace reported in November. Hourly compensation rose at a 3.0 percent rate from a year ago. That was up from the 2.3 percent pace estimated last month.
(Reporting by Lucia Mutikani; Editing by Paul Simao)