U.S. productivity soared during the second quarter while labor costs fell, revised government figures showed.

Nonfarm business productivity jumped 4.3% at an annual rate in the second quarter, the U.S. Labour Department said today. That’s almost double the initial estimate of 2.2% growth. Wall Street economists had expected an upward revision to 3.9%.

Much of today’s sharp upward revision was due to an earlier increase in the U.S. government’s estimate of gross domestic product growth in the second quarter to 3.3% from 1.9%.

Compared to the second quarter of 2007, productivity rose 3.4%, which is much faster than the average 2.5% growth rate between 2000 and 2007.

Unit labor costs — a key gauge of inflationary pressures — fell 0.5% at an annual rate. The initial estimate was a 1.3% rise. Wall Street economists had forecast a revised 0.3% drop. Labor costs were up just 0.6% from one year ago, an indication that the economic slowdown and weakening jobs market is making it hard for workers to command higher wages.

A separate report from the U.S. Labor Department showed weekly jobless claims up 15,000 to 444,000.

Meanwhile, a report from U.S. payroll firm Automatic Data Processing and forecasting firm Macroeconomic Advisers that attempts to track monthly nonfarm employment signaled a 33,000 drop in private payrolls last month.

In other economic news, service sector activity in the U.S. mounted an unexpected rebound in August, as the pace of price increases eased a bit.

The Institute for Supply Management reported Thursday that its index of non-manufacturing activity came in at 50.6 last month, from 49.5 in July and 48.2 in June. August’s reading was above the 49.5 that had been the expectation of economists.

Readings over 50 indicate expanding activity.