Productivity rebounds while labor costs decline

By MARTIN CRUTSINGER AP Economics Writer

WASHINGTON (AP) - Productivity showed a modest rebound in the July-September quarter while labor costs fell slightly.

The Labor Department says productivity grew at an annual rate of 1.9 percent in the third quarter, a rebound from a decline of 1.8 percent in the second quarter. That was the biggest drop in nearly four years. Labor costs fell at a 0.1 percent rate in the third quarter after having risen 1.3 percent in the second quarter.

Even with the gain in productivity, the efficiency of U.S. workers is still growing at a much weaker pace than last year. Economists see that as an encouraging sign that companies will have to step up their hiring of laid-off workers.