NEW YORK (CNN/Money) - U.S. worker productivity rose in the second quarter, the government reported Tuesday, coming in well ahead of estimates as companies continued to run at an efficient clip.

Non-farm business productivity rose at a 2.9 percent annual rate in the second quarter, the Labor Department said, above the 2 percent pace expected by economists, according to Briefing.com.

Despite the productivity figure pointing to sustained efficiencies, the cost of labor per unit of production increased at a 1.9 percent pace as hourly compensation, which includes both wages and benefit costs, climbed at a sharp 4.9 percent pace.

The second-quarter's rate came in below the revised 3.7 percent pace of the first quarter and well below the 4.7 percent clip in the second quarter of 2003.

As companies cut staff during the recent recession, productivity climbed as fewer workers did more, which limited hiring.

Although productivity slowed in the second quarter, which may indicate increased hiring, output per hour also eased to 3.8 percent in the second quarter, down from 5.7 percent in the previous period.

Following the report, equity futures held onto solid gains and bond prices moved little, with the 10-year note yielding 4.24 percent.

The Federal Reserve Open Market Committee meets Tuesday to determine its next move on interest rates. Despite soft economic reports through June and July, most economists expect the central bank to lift interest rates by 25 basis points to 1.5 percent.