ECI: Firmer Q2, but labor costs continue to ease on trend
|Summar
Employment cost growth rose 0.9% in the second quarter and 3.6% over the past year. Costs for wages & salaries rose 1.0% over the quarter with broad-based strength, but the rise was not enough to buck the slower trend over the past year. Overall compensation growth is more or less consistent with the Fed's inflation goal once accounting for the recent trend in labor productivity, keeping us of the view that the labor market is not a source of significant inflationary pressure at present.
Solid wage and salary gains in Q2
Labor cost growth picked up slightly in the second quarter. The Employment Cost Index rose 0.9% in the three months through June. The slight strengthening over Q2 contrasts with the more timely data on average hourly earnings growth, which decelerated during the quarter after having strengthened early in Q1.
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