U.S. employment costs rose by more than forecast in the third quarter as increases in private wages and salaries accelerated, indicating workers are gaining leverage in a tightening labor market.
The employment cost index, a broad gauge monitored by the Federal Reserve, increased 0.8 percent in the July-September period from the prior quarter, according to a Labor Department report Wednesday. That compared with the median estimate of economists for a 0.7 percent increase. The gauge was up 2.8 percent from a year earlier, matching the prior quarter as the fastest gain since 2008.
A separate report Wednesday showed U.S. companies added a greater-than-forecast 227,000 jobs in October, according to the ADP Research Institute.
The data suggest demand for workers remains strong and companies are offering better compensation packages to workers amid the lowest unemployment rate since 1969, reinforcing the Fed’s outlook for gradual interest-rate hikes to keep the economy from overheating. The report also gives President Donald Trump and Republicans another positive economic talking point ahead of next week’s midterm elections.
Read more in Bloomberg.