The Employment Cost Index climbed 0.9% last quarter, slightly above forecasts, as wage growth in goods-producing industries accelerated.
U.S. labor costs increased 0.9% in the second quarter, matching the prior quarter’s gain and exceeding economists’ expectations of a 0.8% rise. The Employment Cost Index, a key measure of labor market slack, was driven by wage growth in goods-producing sectors, though overall wage pressures remained subdued.
Annual labor costs rose 3.4% through June, unchanged from the March reading. Economists noted that strong job gains in the quarter did not translate into significant inflationary pressures, with the labor market described as stable but not overheating.
The data suggested that while wage growth picked up, it was not a primary driver of inflation, easing concerns for policymakers targeting a 2% inflation rate. Markets viewed the report as neutral for monetary policy expectations.