Key facts
- Labor costs increased 0.8% in the third quarter, matching expectations.
- Annual labor cost growth remained unchanged at 3.4% through September.
- Inflation-adjusted wages and salaries declined 0.6% over the year.
US labor costs rose moderately in the third quarter, with the Employment Cost Index (ECI) increasing 0.8%, matching economists' expectations. This suggests contained wage inflation. The ECI, a broad measure of labor costs, had risen 0.9% in the previous quarter. Over the 12 months through September, labor costs advanced 3.4%, the same as in the year through June. Policymakers view the ECI as a key predictor of core inflation because it accounts for changes in job quality and composition.