U.S. workers are working harder and harder.

Productivity of U.S. workers increased during the third quarter at the fastest pace in six years, according to a Labor Department report cited in a Bloomberg.com report. The measure of employee output per hour increased at a 9.5 percent annual rate, up from 6.6 percent in the second quarter. Hours worked declined at a 5 percent pace, while output increased at a 4 percent rate, and compensation for each hour worked increased at a 3.8 percent annual rate, up from a 0.3 percent rate in the second quarter.

According to numbers from the Labor Department, labor costs fell at a 5.2 percent rate, the largest 12-month drop since records began in 1948.

One economist at Barclays Capital Inc. in New York told Bloomberg that it’s a favorable environment for profits, and that employment will likely go up before long.

Initial jobless claims for the week ended Oct. 31 dropped by 20,000 to 512,000 from 532,000 the prior week. It was the fewest initial claims since January. The number of Americans receiving jobless benefits dropped to the lowest level since March

More than 7.2 million jobs have been lost during the recession that began in December 2007, and unemployment reached a 26-year high of 9.8 percent in September. Some economists have signaled, according to the Bloomberg.com report, that companies will begin expanding payrolls in early 2010.