Revised figures from the U.S. Labor Dept. show that productivity grew by an annual rate of 5.1% in the third quarter, much better than the preliminary estimate of 4%.

Economists had been expecting the revised productivity numbers to show an annualized increase of 4.5% in the quarter.

The Labor Dept. defines productivity as the amount of output per hour of work. Gains in productivity allow employers to raise wages without having to raise prices, as well as allow the economy to grow without automatically increasing inflationary pressures.

Two other economic reports out yesterday also signaled positive news for the struggling U.S. economy.

The U.S. Commerce Dept. said factory orders grew 1.5% in October, following two months of declines. Orders for durable goods, which include such items as cars and appliances, rose by 2.4%.

The data suggest that the U.S. economy is not falling back into recession. But the figures also show that the recovery from last year's slowdown is still tentative.

Meanwhile, the Institute of Supply Management's (ISM) November survey of non-manufacturing activity showed expansion for the tenth month in a row. The ISM's index for the service sector was 57.4 last month, and any reading over 50 denotes expansion, the group said.