Washington, Feb 7 (IANS): US labour productivity rose in the fourth quarter of 2013, while the hiring costs fell, official data showed.

Labour productivity of the US non-farm business sector increased at an annual 3.2 percent rate during October-December, slowing down from a rise of 3.6 percent in the previous quarter, Xinhua quoted the US Labour Department as saying.

The gain in productivity reflected increases of 4.9 percent in output and 1.7 percent in hours worked, the department said in a report.

Unit labour costs in non-farm businesses decreased 1.6 percent in the fourth quarter, as gain in productivity outpaced hourly compensation.

Productivity of the manufacturing sector jumped 2 percent, as output advanced 6.6 percent and hours worked rose 4.4 percent. Over the last four quarters, the manufacturing productivity grew 2. 1 percent.

Productivity measures the amount of output per hour of work. Increased productivity can slow job creation because it means companies can get more out of their current staff without hiring more workers.

The Federal Reserve monitors productivity and labour costs as evidence of inflation stance in order to decide the level of interest rates.