WASHINGTON Nov 19 U.S. labor costs rose
marginally in the third quarter, pointing to tame wage inflation
that should allow the Federal Reserve to maintain its
bond-buying program to stimulate the economy.
The Employment Cost Index, the broadest measure of labor
costs, increased 0.4 percent after advancing 0.5 percent in the
second quarter, the Labor Department said on Tuesday.
Economists polled by Reuters had expected labor costs to
increase 0.5 percent. In the 12 months through September,
compensation costs rose 1.9 percent for a fifth straight
During periods of strong economic growth, the U.S. central
bank closely monitors the index for signs of wage inflation.
High unemployment amid a tepid economic recovery is keeping a
lid on wage pressures.
Some Fed officials have expressed concerns about inflation
being too low. That makes it unlikely the central bank will
scale back its monthly $85 billion bond-buying program this
The monthly purchases are intended to boost demand by
keeping longer-term borrowing costs low.
Wages and salaries, which account for 70 percent of
employment costs, rose 0.3 percent in the third quarter after
gaining 0.4 percent in the prior period.
They were up 1.6 percent in the 12 months through September,
slightly down from 1.7 percent in the same period in 2012.
Benefit costs increased 0.7 percent in the July-September
quarter, the largest gain in more than a year, after rising 0.4
percent in the second quarter.
Benefit costs rose 2.2 percent in the 12 months through
September after advancing 2.4 percent in the period through