U.S. Employment Costs Picked Up in the Third Quarter

The wages of American workers grew steadily in the third quarter, demonstrating that low unemployment is stirring inflation pressures. The employment-cost index, a measure of wages and benefits for civilians, grew a seasonally-adjusted 0.7% from July-September, the Labor Department reported Tuesday. Moreover, benefits rose by 0.8% in the third quarter. This rise in overall costs signified one of the strongest quarterly gains in several years and suggests the labor market is exerting pressure on employers to increase salaries and retain employees. This development could give the Federal Reserve the confidence it needs to raise interest rates by the end of the year.

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