It wasn’t just inflation starting off 2024 hot, paychecks did as well.
A closely watched measure of labor costs showed that compensation growth accelerated much faster than expected during the first three months of the year, providing an unwelcome data point for Federal Reserve officials looking for inflation pressures to ease.
The Employment Cost Index (ECI) rose a seasonally adjusted 1.2% last quarter, faster growth than the 0.9% increase the prior quarter, according to Bureau of Labor Statistics data released Tuesday.
“This isn’t going to calm any nerves at the Fed,” Scott Anderson, chief economist at BMO Capital Markets, told CNN in an interview.
Fed officials are closely monitoring the trajectory of wage gains, as there’s a concern that accelerated compensation growth may serve as an inflation pressure.
Higher benefits costs helped drive the index to its biggest quarterly increase in a year:
So, actual dollars in paychecks weren’t the cause for the increase, it was the fact that the cost of “benefits” (read: basic human rights in every other developed country) went up? It’s an election year, for sure.
Yeah you can tell by way these sorts of articles are worded that the economy is structured such that good things happening to the general public are considered bad news. Isn’t it wonderful?
“Your employer-subsidized healthcare plan costs rose 40% this year so think of all the extra benefits you enjoy!”
