US Q2 employment cost index +0.9% vs +1.0% expected

• Prior was +1.2%
• Wages q/q +0.9% vs +1.1% prior
• Benefits +1.0% vs +1.1% prior

Annual growth in compensation costs eased to 4.1% from 4.5% a year ago and it’s even better when stripping out government as private wages rose 3.9% compared to 4.5% a year ago.

The latest ECI data shows wage pressures continuing to moderate, though still running above the Fed’s comfort zone. The slowdown in annual growth suggests some cooling in the labor market, but the quarterly pace remains firm. Note that wages are a lagging indicator and the Fed is likely to see them that way.

This article was written by Adam Button at www.forexlive.com.