The figure released Wednesday is revised from an earlier estimate of 2.2 percent. It reflects 4.2 percent growth in output and 1.3 percent growth in hours worked.
The department said unit labor costs for non-farm businesses fell 1.9 percent quarter to quarter, while hourly compensation rose 0.9 percent.
Over the past 12 months, unit labor costs were little changed, rising 0.1 percent.
Manufacturing sector productivity dropped 0.7 percent in the third quarter of 2012 compared with the second quarter with output down 0.7 percent and hours worked unchanged.
Among durable goods, productivity fell 1.6 percent, while it rose 0.2 percent in non-durable goods production.
Over the past 12 months, manufacturing productivity has risen 1.3 percent with output up 4 percent and hours worked up 2.6 percent.
Unit labor costs for manufacturers rose 3.2 percent from quarter to quarter and 1.5 percent from the third quarter of 2011, the department said.