Americans are working more for more pay, according to a Q3 Productivity and Costs report (link opens in PDF) released today by the Labor Department.

Nonfarm business sector labor productivity increased an annualized 1.9% for the third quarter, driven primarily by a Q/Q 3.7% increase in output, as well as a 1.7% bump in hours worked. After increasing a revised 1.8% in Q2, analysts had expected a larger 2.3% gain in this latest quarterly report. 

With productivity headed higher, unit labor costs (a measure of labor costs relative to productivity) are on the decline. Analysts had been expecting a 0.3% dip in expenses, but this quarter clocked in with a doubly large 0.6% decline. Hourly compensation increased 1.3%. 


For manufacturing, things aren't looking as good. While productivity managed a 0.4% bump, unit labor costs rose 1.3%.

Comparing this quarter to Q3 2012, productivity has stayed steady while unit labor costs are up 1.9%.