U.S. employment costs picked up in the third quarter from the previous three months, helped in part by faster wage gains in manufacturing, the Labor Department said Tuesday.
Highlights of Employment Cost Index
Employment cost index advanced 0.7%, matching the estimate, after a 0.5% gain in the prior three months. Wages and salaries also rose 0.7% in the third quarter, as benefits costs climbed 0.8% after rising 0.6%. Total compensation, meanwhile, which includes wages and benefits, rose 2.5% over the past 12 months, the most since 1Q 2015.
The report showed a 1% increase in manufacturer employment costs from the prior quarter, helped by a jump at aircraft makers. Wages and salaries at factories climbed 0.8%, while benefit costs increased 1.7%.
The government’s quarterly read on employer costs offers another take on wage growth, which has been gradually moving higher. The ECI, which measures employer-paid taxes such as Social Security and Medicare in addition to the costs of wages and benefits, has shown a fairly steady pace of gains. The sustained pickup is another sign of a tighter labor market that’s forcing businesses to compete for a dwindling share of available workers.
Wages and salaries of all civilian workers rose 2.5% from year earlier. Benefit costs in private industry rose 2.4% from third quarter of 2016, and employer costs for health benefits rose 1.1% from a year ago.
By Vince Golle