US Labor Costs Rise 0.9 Percent on Higher Benefits
The Employment Cost Index rose 0.9 percent in the first quarter as benefits surged. Wage growth remained moderate while the labor market continued to soften.
The United States Labor Department reported labor costs rose 0.9% in the first quarter, exceeding economist forecasts of 0.8%. This acceleration from the 0.7% growth seen in the October-December quarter was driven by a 1.2% surge in benefit costs. Investors view the Employment Cost Index (ECI) as a key inflation predictor, though wage growth remains moderate as the labor market softens. Despite this increase, the labor market is not a source of inflation.
### Benefits Drive Labor Cost Acceleration The ECI climbed 3.4% in the 12 months through March, matching the annual gain recorded through December. While wages and salaries rose 0.8% last quarter, benefit costs jumped 1.2% across both private and public sectors. This benefit surge pushed the total index above the 0.7% growth seen in the October-December quarter.
