US labour costs growth slows in Q2
US LABOUR costs increased less than expected in the second quarter as wage growth cooled a bit, offering a boost to the Federal Reserve in the fight against inflation.
The Employment Cost Index, the broadest measure of labour costs, rose 1.0 per cent last quarter after advancing 1.2 per cent in the January-March period, the Labor Department said on Friday (Jul 28).
Economists polled by Reuters had forecast the ECI rising 1.1 per cent. Labour costs increased 4.5 per cent on a year-on-year basis after shooting up 4.8 per cent in the first quarter.
The ECI is widely viewed by policymakers and economists as one of the better measures of labour market slack and a predictor of core inflation, because it adjusts for composition and job-quality changes.
The Fed on Wednesday raised its policy rate by 25 basis points to the 5.25 per cent-5.50 per cent range, a level last seen just prior to the 2007 housing market crash and which has not been consistently exceeded for about 22 years.
Annual wage growth is gradually slowing after peaking last year, in line with some easing in labour market conditions.
Wages and salaries increased 1.0 per cent in April-June quarter after rising 1.2 per cent in the prior three months. They were up 4.6 per cent year-on-year after advancing 5.0 per cent in the first quarter. Wage growth continues to exceed pre-pandemic rates.
Private sector wages gained 1.0 per cent after climbing 1.2 per cent in the January-March quarter. They advanced 4.6 per cent year-on-year. State and local government wages rose 0.8 per cent after increasing 0.9 per cent in the prior quarter. They advanced 4.7 per cent year-on-year.
Inflation-adjusted wages for all workers accelerated 1.7 per cent on a year-on-year basis after being unchanged in the first quarter. Benefits increased 0.9 per cent last quarter after rising 1.2 per cent in the January-March period. They increased 4.2 per cent year-on-year. REUTERS
Share with us your feedback on BT's products and services
