A Department of Labor report says that productivity rose at a rate of 9.5% in the third quarter. Labor costs fell at a 5.2% rate, larger than the 4% decrease economists were expecting. This comes as companies continue to lay off workers, meaning that productivity rose with fewer workers working at lower wages. Analysts believe that the unemployment rate could reach as high as 10.5% by next summer, before beginning to go down. The Federal Reserve has pledged to keep interest rates low to encourage consumer spending in hopes of stimulating the economy and the job market.
See "Productivity advances at fastest pace in 6 years in 3Q as labor costs fall sharply", Martin Crutsinger, Chicago Tribune, November 4, 2009