Workers’ productivity jumps 3 percent in third quarter

Associated Press

WASHINGTON

U.S. workers’ productivity jumped 3 percent in the third quarter, the strongest gain in three years, while labor costs remained moderate.

The increase in productivity in the July-September quarter was double the 1.5 percent gain in the second quarter, the Labor Department reported Thursday. Unit labor costs rose a modest 0.5 percent in the third quarter, up only slightly from a 0.3 percent gain in the second quarter.

The strong upturn in productivity, the amount of output per hour of work, is not expected to last. But economists are hopeful that future gains will be stronger than the anemic performance of recent years.

Economists say increasing productivity is the biggest challenge facing the economy currently and without an improvement the Trump administration’s goal of boosting economic growth will not be realized.

The stronger productivity increases in the past two quarters followed a scant 0.1 percent gain in the first quarter this year.

The improvement reflected the fact that overall output, as measured by the gross domestic product, accelerated sharply following a weak start to the year. GDP grew at an annual rate of 3 percent in the third quarter, the government reported last week, and that followed a 3.1 percent rise in the second quarter. It was the first back-to-back GDP gains of 3 percent or better in three years.