Wages and salaries climbed in the third quarter to its highest level in 10 years, beating out polled economists' expectations with a 0.9% increase as opposed to the 0.5% forecasted.
USA wages and salaries rose by the most in a decade while private sector payrolls increased by the most in 8 months in October, suggesting overall job growth accelerated this month after Hurricane Florence weighed on restaurant and retail employment in September.
The employment cost index, a broad gauge monitored by the Federal Reserve, increased 0.8 percent in the July-September period from the prior quarter, according to a Labor Department report Wednesday. To combat increased employment costs, employers have been looking to non-salary measures like insurance and benefits packages to retain workers, but may have to start increasing wages to attract and retain talent going forward.
US employment costs rose by more than forecast in the third quarter as increases in private wages and salaries accelerated, indicating workers are gaining leverage in a tightening labor market.
Benefits for all workers increased 0.4% in Q-3 after rising 0.9% in Q-2.
With 3.7 percent unemployment, some economists view the jobs market as being close to or at full employment. The ECI is widely viewed by policymakers and economists as one of the better measures of labor market slack.
President Donald Trump has taken credit for the strong economy and frequently likes to tout low unemployment and solid job growth when he is on the campaign trail ahead of the midterm elections.
Prices also have been rising in the past year, especially for gas and rent, but wages are outpacing inflation by a significant margin. There were a record 7.1 million job openings in the economy in August, compared with only some 6.2 million unemployed.
The Present Situation Index - based on consumers' assessment of current business and labor market conditions - turned in an even bigger gain, rising from 169.4 to 172.8. They were up 3.1 percent in the 12 months through September, the biggest increase since the second quarter of 2008.
State- and local-government employees' compensation increased 0.8% on the quarter and was up 2.5% from a year earlier. That compared with the median estimate of economists for a 0.7 percent increase. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy.