Productivity of US workers grows

Higher productivity means less chance of inflation in the US

The productivity of workers in the US grew at the strongest rate for four years between July and September.

Hourly output per worker, excluding farms, grew at an annual rate of 4.9%, which was better than expected.

It is good news for the Federal Reserve's rate-setters, because it means the economy can keep growing without necessarily causing inflation.

The number of hours worked by employees shrank by 0.5% in the period, according to data from the Labor Department.

That figure was the sharpest decline since 2003.

Wage pressures eased, with unit labour costs dropping at an annual rate of 0.2%.

"It's a positive signal for growth and it also shows less inflationary pressure," said Michelle Meyer from Lehman Brothers in New York.

"It's very encouraging for the Fed," she added.