WASHINGTON (AP) -- Worker productivity slowed in the summer while wage pressures increased, but both developments were better than expected and are unlikely to raise inflation alarms at the Federal Reserve.

The Labor Department reported Wednesday that productivity, the key ingredient for rising living standards, rose at an annual rate of 1.3% in the July-September quarter. That's down from the 3.6% growth rate in the second quarter, but slightly higher than the 1.1% increase initially reported a month ago and better than the 0.9% rise economists expected.