U.S. Labor Costs Show Smallest Increase in 33 Years

According to the U.S. Labor Department, U.S. labor costs in the second quarter recorded their smallest increase in 33 years.

The measurement is widely watched as an indicator as to whether the Federal Reserve will raise interest rates later this year.

The Employment Cost Index was up 0.2 percent, the smallest gain since 1982.

Economists polled by Reuters were well off target, having forecast a rise of 0.6 percent in the second quarter.

From a broader perspective, with unemployment at 5.3 percent, it is close to the threshold considered to be full employment by the Fed.

Wages and salaries, account for 70 percent of employment costs.

 

Private sector wages and salaries were up 0.2 percent after gaining 0.7 percent in the prior quarter.

Category: Featured, General Update