U.S. worker productivity posted its largest increase in three years in the July-September quarter, rising 4.7%. Productivity, which measures the output of non-farm workers, had risen 3.6% in the previous quarter.

Unit labor costs-what a company pays an employee for each unit of output-declined by 0.8% in the third quarter, the first decline since late 2022.

Although quarterly productivity data are volatile, overall this progress suggests that companies are striving to improve their efficiencyBloomberg points out. A sustained improvement in productivity helps offset the effects of wage and other cost pressures that would otherwise have been passed through to the prices of goods and services.

These results support the Federal Reserve's decision to maintain interest rates for the time being. In parallel to these data, the U.S. Department of Labor reported a slight increase in unemployment claims in the third quarter of the year.