US Q3 Largest Wage Gain Since 2008

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.

The Employment Cost Index, the broadest measure of labor costs, increased 0.7 percent after advancing by the same margin

in the second quarter, the Labor Department said on Friday.

 
Economists polled by Reuters had forecast the employment cost index increasing 0.5 percent in the July-September period.

Wages 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.

Federal Reserve officials view the ECI as one of the better measures of labor market slack.

Policymakers at the U.S. central bank on Wednesday gave a fairly upbeat assessment of the labor market, dropping their

characterization of labor market slack as “significant” and replacing it with “gradually diminishing.”

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza