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U.S. Third-Quarter Wage Gains Largest Since 2008

  • 10-31-2014
WASHINGTON, Oct 31 — - U.S. labor costs rose more than expected in the third quarter as wages recorded their largest gain since 2008, a sign that a long-awaited pick-up in wage growth was underway.þþThe Employment Cost Index, the broadest measure of labor costs, increased 0.7 percent after advancing by the same marginþþin the second quarter, the Labor Department said on Friday.þþEconomists polled by Reuters had forecast the employment cost index increasing 0.5 percent in the July-September period.þþWages and salaries, which account for 70 percent of employment costs, rose 0.8 percent in the third quarter, the largest increase since the second quarter of 2008. They had gained 0.6 percent in the second quarter.þþFederal Reserve officials view the ECI as one of the better measures of labor market slack.þþPolicymakers at the U.S. central bank on Wednesday gave a fairly upbeat assessment of the labor market, dropping theirþþcharacterization of labor market slack as ÿsignificantÿ and replacing it with ÿgradually diminishing.ÿþþIn the 12 months through September, labor costs increased 2.2 percent, the largest increase since the second quarter ofþþ2011. They had increased 2.0 percent in the 12 months through June.þþWages and salaries were up 2.1 percent in the 12 months through September, the biggest rise since the first quarter ofþþ2009, after increasing 1.8 percent in the 12 months through June.þþVarious surveys have been hinting at an acceleration in wage growth.þþBenefit costs increased 0.6 percent in the July-September period. That followed a 1.0 percent gain in the second quarter.þþThey increased 2.4 percent in the 12 months through September after rising 2.5 percent in the 12 months through June.þ

Source: NY Times