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

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

Although quarterly productivity data are volatile, this trend generally suggests that companies are striving to improve their efficiency, Bloomberg notes. A sustained improvement in productivity helps offset the effects of wage and other cost pressures that would otherwise have been passed on to the prices of goods and services. 

These results support the Federal Reserve's decision to keep interest rates unchanged for the time being. Alongside these figures, the U.S. Department of Labor reported a slight increase in unemployment insurance claims in the third quarter of the year.