Employment costs and benefit growth slows

WASHINGTON (Reuters) - Employment costs rose by a slightly less-than-expected 0.8 percent in the third quarter after growth in benefit costs moderated, government data on Wednesday showed.

The Labor Department's Employment Cost Index, a broad measure of what employers pay in wages, salaries and benefits, had been forecast to rise 0.9 percent on a seasonally-adjusted basis during the July-September period.

This compared with a 0.9 percent gain posted during the previous three months.

The latest numbers will provide some reassurance to the Federal Reserve as it monitors wage cost pressures, a key factor in assessing inflation risks.

Wages and salaries were up 0.8 percent, matching the gain in the second quarter. Benefit costs also mounted 0.8 percent, marking a clear deceleration from the 1.3 percent jump in the three months.

This was partly due to a slowdown in the growth in benefit costs for state and local government workers to 0.7 percent from 1.7 percent in the second quarter, the lowest reading since the quarter ending in September 2000 when these costs fell 0.3 percent, a Labor Department official said.

In the 12 months to September, employment costs advanced 3.3 percent, which was unchanged from the pace posted in the year to June.