US labor cost growth held steady in the third quarter, suggesting the job market is not adding to broader inflationary pressures. The employment cost index, which tracks changes in wages and benefits, rose 3.4% in the 12 months ended in September, according to Bureau of Labor Statistics figures released Friday. Adjusted for inflation, compensation costs declined 0.4%. On a quarterly basis, the gauge rose 0.8%.
The labor market has been broadly stable this year, with few layoffs alongside subdued hiring. Many workers, however, have struggled to keep up with rising prices. "Job gains have kept pace with the workforce, and the unemployment rate has changed little. But inflation remains elevated," Federal Reserve Chairman Kevin Warsh said Wednesday after the central bank decided to keep interest rates unchanged.
Growth in wages and salaries for civilian workers edged down to 0.7% in the three months through September and 3.1% from a year earlier, the lowest since 2021. Adjusted for inflation, wages fell 0.6% over the 12 months through September. Private-sector employer costs for health benefits picked up to 6.4% in the year through September, the highest since the end of 2025.
Next week, the BLS will release its October jobs report, offering a fresh look at hiring and wages across the US.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing