The productivity of U.S. workers rose in the third quarter for the first time this year as companies tried to cut costs following a slowdown in growth.

The measure of employee output per hour increased at a 3.1 percent annual rate, following declines in each of the previous two quarters, figures from the Labor Department showed today in Washington. Expenses per employee fell at a 2.4 percent rate after a 2.8 percent gain in the second quarter.

Employers sought to cut costs by keeping payrolls down and squeezing more output from existing staff. Lower labor expenses, which account for about two-thirds of the cost of producing a good or service, may help hold down inflation, giving Federal Reserve leeway to take additional steps if needed to spur the world's largest economy.

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