U.S. third-quarter productivity revised up to 2.9% (by Jeffry Bartash)

WASHINGTON (MarketWatch) - The increase in U.S. productivity in the third quarter was revised up to 2.9% from an initial reading of 1.9%, as companies generated more goods and services than originally estimated. Economists surveyed by MarketWatch expected productivity to be revised up to 2.8% in the first of the government's two updates to the third-quarter report. The Labor Department said output rose 4.2%, up from a prior estimate of 3.2%, in the July-to-September period. The rise in hours worked last quarter was unchanged at 1.3%. Unit-labor costs, meanwhile, fell by 1.9%, a much bigger drop the than the 0.1% decline initially reported. Unit-labor costs in the second quarter were also revised sharply lower to a 0.5% decline instead of a 1.7% advance. Hourly wages rose 0.9% in the third quarter instead of 1.8%. Yet after adjusting for inflation, wages fell 1.4% vs. an initial reading of a 0.4% decrease. That's the largest drop since the 2011 fourth quarter. In the manufacturing sector, the decline in productivity was revised down to 0.7% from 0.4%. For the second quarter, productivity was unchanged at a 1.9% increase.