Employment Cost Index growth decelerates in Q3, as expected

What happened

The Employment Cost Index, a measure of what employers pay for worker wages and benefits, rose 0.8% in the third quarter from the prior quarter, matching expectations and slowing from 0.9% in the second quarter, the Bureau of Labor Statistics reported Friday.

Confirmed

Global impact / market context

Slower growth in pay and benefits means companies face less pressure from rising labor costs, which can protect profit per sale, the money kept from each sale. It may also make price increases tied to wages less likely, which matters for how long inflation stays high.

Analyst inference

This report arrives as investors weigh whether high inflation is easing and how the Federal Reserve, the US central bank, sets interest rates. A reading in line with expectations suggests no surprise on labor costs, so attention shifts to other incoming data while these figures are still being updated.

Analyst inference

What to watch

1. The Bureau of Labor Statistics reported wage and salary growth of 0.7% for the quarter, down from 0.9% in the second quarter, a sign of cooler pay growth. Confirmed
2. Watch whether the report is updated, because the article says it is developing and asks readers to check back for changes to the figures. Proposed
3. Watch whether slower benefit cost growth of 0.9%, down from 1.0%, continues, since benefits are a recurring cost that affects company budgets and hiring plans. Analyst inference

Evidence

• seekingalpha.com