The cost of US labor rose slightly in the fourth quarter, offering comfort to Federal Reserve officials after progress lowering traffic inflation at the end of 2024.
The Manpower Cost Index (ECI), the size of the area of labor costs, obtains 0.9% of the last quarter after rising 0.8% in the third quarter, the Department of Manpower Statistics Bureau said on Friday.
Economists surveyed by Reuters have estimated that ECI would increase 0.9%. Labor costs increased 3.8% in 12 months to December after rising 3.9% this year to September.
Eci is seen by policy makers as one of the better measurements of the labor market concession and core inflation predictors because they adjust to the composition and changes in quality of the job.
Government data on Thursday shows the inflation taken in the fourth quarter in the middle of a surge in consumer expenditure.
The US central bank on Wednesday left the benchmark of the interest rate overnight in the range of 4.25% -4.50%, after reducing 100 basis points since September when starting the policy easing cycle.
The accompanying policy statement does not include inflation references that have “made progress” towards the target of 2% Fed.
The Fed only estimates that two interest rates this year, down from four that have been projected in September. That reflects the uncertainty about the economic impact of President Donald Trump’s plan for tax cuts, extensive tariffs on immigration imports and crush, which economists are considered as inflation.
Wages and salaries, which are mostly labor costs, up 0.9% last quarter after rising 0.8% in the July-September quarter. They increased 3.8% every year, slowing down from an increase of 3.9% the third quarter.
When adjusted to inflation, the overall wage increases 0.9% in 12 months to December after advancing 1.4% in the July-September quarter. The increase in what is called real income is to underlie expenses.
Wages and salary of the private sector rose 0.9%. They increased 3.7% in 12 months to December after rising 3.8% in the third quarter. The wage of the state and local government rose 1.0% of the last quarter, matching profits in the July-September quarter. They rose 4.5% in 12 months to December.
Benefits for all workers rose 0.8%, match the third quarter profits. They increased 3.6% in 12 months to December after rising 3.7% in the July-September quarter.
Source: Reuters
