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American workers are becoming a lot more productive

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The U.S. labor market, which is busy adding jobs as the economy improves, is also getting a lot more productive.

Third-quarter productivity climbed a better-than-expected 2%, the Labor Department reported on Thursday, as employees worked more hours and output increased. Observers had projected a 1.5% increase, according to a survey conducted by Bloomberg.

Additionally, the Labor Department raised its second-quarter productivity figure, rising 2.9% rather than the 2.3% increase that was reported in September.


The labor market has been a bright spot in the U.S., especially considering the uneven recovery in the housing market and the pressure facing retailers as consumers keep a lid on spending. The Federal Reserve and economists have been encouraged by the broad-based nature of those now jobs, though weak wage growth has been problematic.

The Labor Department’s latest report suggests there was some improvement on the wage front. Hourly compensation increased 2.3% in the third quarter on a sequential basis. That builds on a 2.3% jump in hourly compensation that was reported for the second quarter.

On Friday morning the Labor Department will issue the October employment report, which is expected to show another month of solid job gains.