WASHINGTON (Reuters) - U.S. worker productivity grew faster than initially thought in the second quarter, reining in labor costs, suggesting that inflation pressures could continue to subside.

Nonfarm productivity, which measures hourly output per worker, increased at a 2.5% annualized rate last quarter, the Labor Department's Bureau of Labor Statistics said on Thursday.

That was an upward revision from the 2.3% pace estimated last month. The upward revision was in line with economists' expectations. Productivity increased at a 0.4% rate in the first quarter. It advanced at an unrevised 2.7% pace from a year ago.

Unit labor costs - the price of labor per single unit of output - rose at a 0.4% rate in the April-June quarter. That was revised down from the previously reported 0.9% pace.

Labor costs increased at a 3.8% the January-March quarter and at a 0.3 % rate from a year ago.

The Federal Reserve is expected to start cutting interest rates this month against the backdrop of cooling inflation and labor market conditions.

Compensation rose at a 3.0% rate last quarter, revised down from the previously estimated 3.3% pace. It advanced at a 3.1% rate from a year ago.