-- US employment costs unexpectedly accelerated in the third quarter, heightening concerns that a strong labor market risks keeping inflation above the Federal Reserve’s target.The employment cost index, a broad gauge of wages and benefits, increased 1.1% in the July-to-September period after rising 1% in the second quarter, according to Bureau of Labor Statistics figures released Tuesday.
With Fed officials watching economic data closely for any signs that the job market is no longer easing, the surprise pickup in labor costs may fuel concerns that inflation will remain stubborn.Policymakers are widely expected to leave the benchmark interest rate unchanged at the conclusion of their two-day meeting on Wednesday. Still, a sustained re-acceleration in wage growth risks spurring the central bank to raise borrowing costs further in coming months.
Wages for service workers in the private sector increased in the third quarter at a slightly slower pace, restrained by smaller gains in transportation and warehousing, and information. The increase in wages for workers in accommodation and food services was the smallest in eight years.
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