Job growth picked up between March and May, bringing a resultant hike in labor costs.
According to statistics released by the U.S. Department of Labor, labor costs rose more than expected in the second quarter as private-sector wage growth picked up.
According to a report from Reuters, the Employment Cost Index, the broadest measure of labor costs, climbed 0.9% last quarter after advancing by the same margin in the January-March quarter, the Labor Department’s Bureau of Labor Statistics said. Economists polled by Reuters had forecast the ECI would rise 0.8%.
Reuters reported labor costs increased 3.4% in the 12 months through June after a similar gain in the year through March.
Job growth accelerated between March and May, though the momentum dropped in June. Economists describe the labor market as being in stuck in a “low hire, low fire” state. Wages and salaries, which account for the bulk of labor costs, increased 0.9% in the second quarter. In the 12 months through June, wages rose 3.2%. Private sector wages and salaries increased 0.9% last quarter after rising 0.7% in the January-March quarter. In a 9-3 vote on Wednesday, the Federal Reserve left its benchmark overnight interest rate in a 3.50%-3.75% range. Three members of the U.S. central bank’s policy-setting committee dissented. They “preferred” a quarter-percentage-point hike.
