Rise in benefits lifts US labor costs in first quarter

Reuters

Thu, April 30, 2026 astatine 8:26 AM CDT 2 min read

WASHINGTON, April 30 (Reuters) - Growth successful U.S. labour costs accrued somewhat much than expected successful the archetypal 4th amid a leap successful benefits, ‌but wage maturation was mean against the backdrop of a softening labour ‌market.

The Employment Cost Index (ECI), the broadest measurement of labour costs, precocious 0.9% past 4th aft rising 0.7% ​in the October-December quarter, the Labor Department's Bureau of Labor Statistics said connected Thursday. Economists polled by Reuters had forecast the ECI would emergence 0.8%.

Labor costs accrued 3.4% successful the 12 months done March, matching the summation successful the twelvemonth done December. ‌Benefits surged 1.2% aft expanding ⁠0.8% successful the 4th quarter. They roseate 3.6% successful the 12 months done March aft expanding 3.4% successful the twelvemonth done ⁠December. The summation successful benefits occurred successful some the backstage and nationalist sectors.

The ECI is viewed by policymakers arsenic 1 of the amended measures of labour marketplace slack and ​a predictor ​of halfway ostentation due to the fact that it adjusts for ​composition and changes successful occupation ‌quality.

Despite past quarter's increase, the labour marketplace is not a root of inflation. Job maturation has slowed considerably amid headwinds from tariffs connected imports and reduced labour proviso due to the fact that of an migration crackdown.

The Federal Reserve near its benchmark overnight involvement complaint successful the 3.50%-3.75% scope connected Wednesday, citing rising ostentation concerns from the U.S.-Israeli warfare ‌with Iran. Financial markets expect the U.S. cardinal ​bank volition support involvement rates unchanged good into ​next year.

Wages and salaries, which ​account for the bulk of labour costs, accrued 0.8% successful the ‌first 4th aft rising 0.7% successful ​the October-December quarter. They ​advanced 3.4% connected an yearly ground aft expanding 3.3% successful the 12 months done December. Private assemblage wages and salaries gained 0.7% past quarter, ​matching the emergence successful the ‌fourth quarter.

When adjusted for inflation, wide wages ticked up 0.1% successful the ​12 months done March aft rising 0.7% successful the 4th quarter.

(Reporting ​by Lucia Mutikani; Editing by Paul Simao)