The U.S.’s tame wage inflation
High unemployment and a slow economic recovery are keeping wages from rising quickly, Reuters reports on new labor cost data. “Wages and salaries, which account for 70 percent of employment costs, rose 0.3 percent in the third quarter after gaining 0.4 percent in the prior period,” Reuters writes. Here’s more:
The Employment Cost Index, the broadest measure of labor costs, increased 0.4 percent after advancing 0.5 percent in the second quarter, the Labor Department said on Tuesday.
Economists polled by Reuters had expected labor costs to increase 0.5 percent. In the 12 months through September, compensation costs rose 1.9 percent for a fifth straight quarter..
Benefits costs are rising more quickly than wages and salary, Reuters adds:
Benefit costs increased 0.7 percent in the July-September quarter, the largest gain in more than a year, after rising 0.4 percent in the second quarter.
Benefit costs rose 2.2 percent in the 12 months through September after advancing 2.4 percent in the period through September 2012.
Running parallel to employment costs is productivity, which was flat in the third quarter compared to the same time last year, according to data released last week from the Bureau of Labor Statistics.