U.S. Q2 Employment Cost Index - Stabilizing above pre-pandemic trend
The 0.9% increase in Q2’s Employment Cost index is on the high side of expectations. Wages and salaries rise by 0.9%, while benefit costs rise by 1.0%.
The wages and salaries rise was a 4-quarter high, outperforming signals from payroll average hourly earnings, though yr/yr growth still slowed to 3.2% from 3.4%.
The benefits cost gain slowed from 1.2% in Q1 though the last two quarters have been stronger than the previous three. Yr/yr growth in benefit costs rose to 3.8% from 3.6%,
Overall yr/yr growth is stable at 3.4%. Before the pandemic trend was consistently a little below 3.0% though this suggests a sustained if moderate rise in wage-generated inflationary pressure. The labor market is not the main source of inflationary concerns at present, though should not be dismissed entirely.
