Employment Cost Index At Expectations

Wage pressures are flat and will not stand in the way of a Federal Reserve rate cut that is expected this afternoon. The employment cost index rose 0.6 percent in the second quarter versus expectations for 0.7 percent. The year-on-year rate likewise moderated, to 2.7 percent versus expectations for 2.8 percent. Of the index's two components, benefits slowed 2 tenths in the second quarter to 0.5 percent for a year-on-year 2.3 percent increase while wages & salaries held steady at 0.7 percent quarterly for a yearly 2.9 percent. The lack of acceleration in employment compensation readings hints at available capacity in the labor market.