US Labor Costs Rise Steadily, Fueling Inflation Concerns
US labor cost growth remained steady in Q2, according to Bureau of Labor Statistics figures released on July 31. The employment cost index (ECI), which tracks changes in wages and benefits, increased by 3.4% in the 12 months ended June.
This rate is considered steady, as it indicates that the job market is not contributing significantly to inflationary pressures. The ECI rose 0.9% on a quarterly basis from Q1 to Q2.
Chairman Kevin Warsh stated, 'Job gains have kept pace with the workforce and the unemployment rate has changed little.'
The Federal Reserve closely monitors labor market health, particularly after strong hiring at the start of the quarter tapered off by its end. Despite this, pay gains did not accelerate meaningfully, suggesting the labor market is roughly in balance.