The report showed that inflation, as measured by the Federal Reserve’s preferred measure, the personal consumption price index, rose 6.8% year on year in June, up from a 6.3% rise over the 12 months till May.Įconomists say the latest job cost figures are a disheartening sign for Federal Reserve officials as they seek to bring inflation to their 2% target, which has been high for four decades. “Competition for workers remains fierce as employers must continue to raise wages for new hires.”Ī separate Commerce Department report on Friday showed that consumers increased their seasonally adjusted spending by 1.1% in June, from a revised 0.3% increase in May.

“The rest of the economy may be slowing down, but wages are rising,” said Nick Bunker, an economist at jobs site Indeed. Wages for private sector workers accelerated, rising 1.6% in the spring from 1.3% in the first three months of the year.Ĭompensation growth shows that in a historically tight labor market, employers continue to seek workers and raise wages even as the economy contracted in the second quarter. Wages and benefits for civilian workers rose a seasonally adjusted 1.3% in the second quarter, slowing slightly from a record 1.4% growth in the first quarter as employers cut benefits this spring.

That was the fastest annual pace since 2001, beating the 4.5% annual increase in the first quarter. Workers’ wages and benefits are rising at an all-time high this year, keeping pressure on historically high inflation.īusinesses and state employers spent 5.1% more on workers’ compensation in the second quarter than in the same period last year, excluding seasonal adjustments, the Labor Department said on Friday.

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