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.”