Employment Cost Index At Low End Of Expectations

Slowing in wage costs kept down the employment cost index in the second quarter, coming in at a 0.6 percent gain which is at the low end of expectations and down noticeably from the first quarter's 0.8 percent gain.

Wages & salaries rose only 0.5 percent in the quarter, well down from 0.9 percent in the first quarter in what will be a relief for Federal Reserve policy makers who are on the watch for wage pressures given the strength of the labor market. But there is cost pressure for employers and that's in benefits which had been behaved but did rise 0.9 percent in the latest quarter.

And year-on-year rates actually ticked higher, up 1 tenth overall to 2.8 percent which is the same result for the wages & salaries component. The benefits component rose 3 tenths to 2.9 percent.

This is a mixed report but the slowing in quarterly wages is a tangible positive and complements the modest inflation readings in this morning's personal income & outlays report.