WASHINGTON - Companies across the economy are finding ways to do more with fewer workers, according to a report yesterday from the Labor Department.

But the increased productivity dims hopes that hiring will take off anytime soon.

The report crystalizes the confounding nature of the economy during the end stages of the recession: Recent economic data have provided some good news, some bad - giving an often contradictory picture. That is the pattern of the end of this recession.

The government will announce today unemployment figures for October - and they are likely to show another month of job losses nationally and a jobless rate continuing to spiral toward 10 percent. The September unemployment rate was 9.8 percent, compared with 6.6 percent last October.

Yesterday's report showed that U.S. employers became leaner and more efficient in the third quarter while labor costs fell. The result is that productivity - output per hour of work - jumped at the fastest pace in six years.

As long as companies can get their workers to produce more, they have little reason to hire, at least until consumer spending picks up. And the squeeze on incomes could depress consumer spending, putting the economic recovery at risk.

Productivity rose at an annual rate of 9.5 percent in the July-to-September quarter, the government said. That was much better than the 6.4 percent gain economists had expected. Unit labor costs - how much it costs a company to make one item - fell at a 5.2 percent rate.

"Survival meant cutting costs as rapidly as possible and fulfilling orders with the fewest number of workers," said Joel Naroff, chief economist at Naroff Economic Advisors, of Holland, Pa.

Naroff said hiring could remain sluggish for months. But other analysts said companies were starting to reach the limits of how much they could produce with their shrunken workforces.

The summer productivity rise followed a 6.9 percent surge in the second quarter and was the fastest since a 9.7 percent increase in the third quarter of 2003.

The higher output came as companies continued to lay off workers. That meant employers produced more with fewer workers.

The 5.2 percent drop in unit labor costs marked the third straight decline and was larger than the 4 percent decrease economists were expecting.

Productivity is the key ingredient to raising living standards. It lets companies pay their workers higher wages. The increases are financed by the increased output rather than higher costs for products.

But as they struggled with the longest recession since the 1930s, companies boosted productivity while continuing to lay off workers. Many produced more goods; others kept their output down but slashed costs. Companies kept wages down by freezing pay or imposing unpaid furloughs.