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MNI BRIEF: US Labor Costs Increase 1.0%, Below Expectations

(MNI) WASHINGTON

The Employment Cost Index, the broadest measure of U.S. labor costs, rose 1.0% last quarter after gaining 1.2% in the July-September period, the Labor Department said on Tuesday. The year-on-year rate rose to 5.1% from 5.0% 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 were looking for a deceleration in the employment cost index and are looking for nominal wages to cool to around 3.25% to 3.5%. The latest figures provide some relief that things are moving in the right direction and bond yields dipped after the release.

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The Employment Cost Index, the broadest measure of U.S. labor costs, rose 1.0% last quarter after gaining 1.2% in the July-September period, the Labor Department said on Tuesday. The year-on-year rate rose to 5.1% from 5.0% 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 were looking for a deceleration in the employment cost index and are looking for nominal wages to cool to around 3.25% to 3.5%. The latest figures provide some relief that things are moving in the right direction and bond yields dipped after the release.

Keep reading...Show less