US employment costs grew at a steady pace in Q2
The employment cost index increased 3.4% in the 12 months ended in June
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[WASHINGTON] US labour cost growth remained steady in the second quarter, indicating the job market is doing little to contribute to inflationary pressures.
The employment cost index, which tracks changes in wages and benefits, increased 3.4 per cent in the 12 months ended in June, according to Bureau of Labor Statistics figures out on Friday (Jul 31). Adjusted for inflation, however, compensation costs declined.
On a quarterly basis, the gauge climbed 0.9 per cent.
The Federal Reserve has been closely monitoring the labour market’s health. Strong hiring at the start of the quarter tapered off by the end. Friday’s report showed that the early surge didn’t spur a meaningful pickup in pay gains, signalling the labor market is roughly in balance.
“Job gains have kept pace with the workforce and the unemployment rate has changed little,” fed chairman Kevin Warsh said on Wednesday after the central bank decided to keep interest rates unchanged.
Separate data out Thursday showed inflation cooled in June but remained well above the Fed’s 2 per cent target.
Friday’s ECI report showed that wages and salaries for civilian workers rose 0.9 per cent in the three months through June, and 3.2 per cent from a year earlier. Adjusted for inflation, they declined over the year. BLOOMBERG
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