Wages and benefits paid to U.S. workers – a key inflation guage – rose by a moderate amount in the third quarter, the government said today, matching analysts’ estimates.
The Labor Department reported that employment costs for civilian workers increased by a seasonally-adjusted 0.7 percent for the June-September period, the same increase as in the previous two quarters.
That level of growth is the lowest since wages and benefits rose by 0.6 percent in the first quarter of 2006, and provides evidence that the weak job market is limiting the ability of employees to demand raises and more generous benefits.
Wages and salaries rose by 0.7 percent in the third quarter, the same level as the previous period, while benefits increased by 0.6 percent, also matching the previous quarter, the department said.
Separately, the Commerce Department said personal spending dropped 0.3 percent in September, the biggest drop since June 2004, as consumers cut back sharply in the face of a struggling economy.
The Labor Department’s employment cost report will likely reassure Federal Reserve policymakers that pay and benefits aren’t rising sharply enough to create inflation concerns. (AP)
