The U.S. Labor Department said Wednesday the nation’s productivity rose more than originally expected last quarter, but labor costs remained under pressure as a slumping economy gave employees little room to ask for higher wages.

According to a report by the Bureau of Labor Statistics, the nation's productivity rate, which is measured as output per employee hour, rose at a 1.3% annual rate last quarter. That was revised upward from a 1.1% estimate the Labor Department gave last month.

The upward movement in productivity was much more than what economists were expecting. According to data provided by Thomson Reuters, economists were looking for a downward revision to 0.9%.

Labor costs, or wages that employees are paid, remained heavily under pressure however. The Labor Department said labor costs rose at a 2.8% annual rate, down from the initial estimate of a 3.6% annual rate. Economists were looking for wage costs to rise 3.1%.

Looking at a broader trend for labor costs, the government said labor costs are up 1.4% from a year, which is below the current rate of inflation. Labor costs are important to watch because if businesses are hurting, it makes it tougher for employees to ask for higher wages.

ADP Report Indicates More Job Losses Coming

In another report related to the labor market, the ADP National Employment Report, which is run by Automated Data Processing (ADP), said the nation’s private sector lost 250,000 jobs in November.

The ADP report is the first of three labor market-related reports Wall Street gets during the first week of the month, culminating with the all-important Labor Department jobs report out Friday.

The ADP report was much worse than expected, with economists looking for a private sector job loss of 205,000 jobs. Using the ADP report, it is suspected that Friday’s jobs report could indicate a loss as much as 325,000 jobs, according to FOX Business Senior Economist Mark Lieberman, though the ADP results haven't been very reliable as an indicator of what the Labor Department report will say.