U.S. Employment Costs Increased at Faster Pace in Fourth Quarter


U.S. employment costs rose more than forecast in the fourth quarter as worker pay increases accelerated while benefit gains held firm.

The employment cost index, a broad gauge monitored by the Federal Reserve, climbed 0.7% from the prior quarter, the fastest pace since the first three months of the year, according to Labor Department data released Friday that topped the median estimate in a Bloomberg survey of economists that called for 0.5%. The gauge increased 2.5% from a year earlier, also an acceleration.

The report shows employers may be more willing to offer greater wage gains amid the weak labor market, suggesting cost pressures for companies are muted.

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