US labor costs rise 0.9% in Q2, slightly above forecast

• U.S. labor costs rose 0.9% in the second quarter, exceeding the 0.8% forecast.
• Wages and salaries increased by 0.9%, while benefit costs rose by 1.0% in Q2.
• Private industry worker compensation costs grew 0.9%, matching the previous quarter's pace.
• State and local government worker compensation costs increased by 1.0%.
• Annual employment cost growth remained steady at 3.4% for the 12 months ending June 2026.

U.S. labor costs rose slightly more than expected in the second quarter, increasing by 0.9% and surpassing the 0.8% forecast. This rise was primarily driven by a 0.9% increase in wages and salaries and a 1.0% rise in employer costs for employee benefits. Compensation costs for private industry workers grew by 0.9%, mirroring the previous quarter's pace, while those for state and local government workers saw a 1.0% increase. On an annual basis, employment cost growth held steady at 3.4% for the twelve months ending in June 2026, with wages and salaries up 3.2% and benefit costs up 3.8%. Despite the quarterly uptick, the underlying trend is viewed as benign, suggesting that labor market pressures are not significantly contributing to inflation concerns.