MNI BRIEF: US Labor Costs Increase 0.9%, Below Expectations
Labor costs decelerate on a 12-month basis, bolstering hopes of soft landing.
The Employment Cost Index, the broadest measure of U.S. labor costs, rose 0.9% last quarter after gaining 1.1% in the July-September period, the Labor Department said on Wednesday. The 12-month rate fell to 4.2% from 4.3% in the previous quarter.
The ECI is widely viewed by policymakers and economists as one of the better measures of labor market slack and a predictor of core inflation. Fed Chair Jerome Powell and his colleagues are looking for deceleration in the employment cost index and for nominal wages to cool to around 3.5%.
Wages and salaries increased 0.9% last quarter, down from 1.2% in the prior quarter, and eased to 4.3% over the year. Private sector compensation rose 0.9%, down from 1.0% in the last quarter. For all workers excluding incentive-paid occupations the growth rate over the year slipped to 4.2% from 4.4% the previous quarter.
Source: Bureau of Labor Statistics