The productivity of American workers rose at an annual rate of 2.1 percent in the final three months of last year, sharply higher than first thought, a government report showed on Thursday

For 2004 as a whole, non-farm business productivity, or worker output per hour, grew 4.0 percent, the Labor Department said. It was a small downward revision from the 4.1 percent pace reported last month and marked the smallest increase since 2001.

The Labor Department had initially reported a month ago that productivity had risen by just 0.8 percent in the October-December quarter, a figure that had investors worrying that inflation pressures could be mounting.

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