By Martin Crutsinger

WASHINGTON (AP) -- U.S. workers increased their productivity over the summer by the most in a year and a half but the gain was smaller than initially thought.

The Labor Department says productivity rose at an annual rate of 2.3 percent in the July-September quarter. That was slower than the 3.1 percent the government estimated a month ago. Labor costs fell at a 2.5 percent rate, a slightly larger decline than the 2.4 percent drop first estimated.

The downward revision to productivity reflected slower growth in the third quarter. The government said total output grew at an annual rate of 2 percent, slower than the 2.5 percent initially estimated.

A more productive and less-costly work force can boost corporate profits. But unless companies see more demand, they're unlikely to step up hiring.