The productivity of U.S. workers increased in the fourth quarter at a faster pace as companies sought to cut costs to preserve profits, Bloomberg reported.

The measure of employee output per hour rose at a 2.6 percent annual rate after a third-quarter gain of 2.3 percent, according to U.S. Department of Labor figures released today. Labor expenses fell for a second straight year.

“Productivity remains firm and labor costs are really benign,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets Corp. in New York in an interview with Bloomberg. “Productivity can only take you so far when output is starting to advance. To meet extra demand, most companies will have to start to hire.”

For all of 2010, productivity climbed 3.9 percent, the most since 2002. Labor costs fell 1.5 percent after a 1.6 percent decrease in 2009.

Manufacturing productivity rose at a 5.9 percent annual pace in the fourth quarter, up from a 1.3 percent pace in the third quarter.