U.S. businesses produced goods and services more efficiently in the third quarter than originally believed, mainly by boosting output while keeping labor costs down.
The ability of companies to keep costs corralled makes it easier for the Federal Reserve to continue efforts to prop up the economy without stirring inflation, a good thing for bondholders.
Yet it also reflects the reluctance of business to hire or raise wages in a slow-growing economy, giving unemployed Americans little comfort and leaving little room for consumers to sharply boost spending.