US labor productivity logged its biggest increase in the second quarter in nearly three years, helping to offset rising labor costs.

Productivity, or nonfarm business employee output per hour, rose at a 3.7% annual rate in the second quarter after registering a decline in the first three months of the year, according to figures out Thursday from the Bureau of Labor Statistics. The median estimate in a Bloomberg survey of economists had called for a 2.2% rise.

Unit labor costs, or what a business pays employees to produce one unit of output, rose at a 1.6% rate after surging 3.3% in the prior period.