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The
Employment Cost Index, the broadest measure of labor costs,
increased 0.6 percent after a similar gain in the second
quarter, the Labor Department said on Friday. That left the
year-on-year rate of increase at 2.3 percent.
Economists polled by Reuters had forecast the ECI rising 0.6
percent in the third quarter.
While the ECI costs have increased 0.6 percent every quarter
this year, anecdotal evidence suggest wage growth has been
picking up. The Federal Reserve's latest Beige Book reported
rising pressures in some parts of the country and certain
sectors of the economy in September and early October.
Wage growth has been frustratingly slow, but there are hopes
that tightening labor market conditions could unleash a faster
pace of increases. Economists say labor costs need to rise by at
least 3 percent to push inflation closer to the U.S. central
bank's 2 percent inflation target.
Labor costs increased 2.3 percent in the year to June.
The ECI is widely viewed by policymakers and economists as one
of the better measures of labor market slack. It is also
considered a better predictor of core inflation.
Wages and salaries, which account for 70 percent of employment
costs, rose 0.5 percent in the third quarter. They increased 0.6
percent in the second quarter. Wages and salaries were up 2.4
percent in the 12 months through September.
That followed a 2.5 percent gain in the year to June.
Benefits for all workers increased 0.7 percent in the
July-September quarter after rising 0.5 percent in the second
quarter.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci)
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