US employment costs rise modestly in fourth quarter
Wages and benefits for U.S. workers rose in the last quarter of the year even with employers trying to hold the line on pay gains as the pandemic rankles the economy.
Total U.S. workers compensation rose 0.7% in the October-December quarter, an increase over the previous two quarters, the Labor Department said Friday. Growth was 0.5% in the second and third quarters, down from 0.8% in the first three months of the year.
For the year, wages and benefits grew 2.5%, with wages and salaries up 2.6% and benefits, which include Social Security, grew 2.3%.
The data comes from the Labor Department’s Employment Cost Index, which measures pay changes for workers that keep their jobs. The data isn’t affected by the mass layoffs in the spring.
Even though the gains were modest, they still outpaced 2020 inflation of 1.4%, which is well below the Federal Reserve’s 2% target. Analysts believe inflation will remain subdued as the U.S. economy struggles to break out of a pandemic-induced downturn.