UNITED STATES NEWS

US wages rose at a solid pace this summer, posing challenge for Fed’s inflation fight

Oct 31, 2023, 5:49 AM

WASHINGTON (AP) — Wages and benefits grew at a slightly faster pace in the July-September quarter than the previous three months, a benefit for workers but a trend that also represents a risk to the Federal Reserve’s fight against inflation.

Compensation as measured by the Employment Cost Index increased 1.1% in the third quarter, down from a 1% rise in the April-June quarter, the Labor Department said Tuesday. Compared with a year ago, compensation growth slowed to 4.3% from 4.5% in the second quarter. Still, that is faster than the rate of inflation, suggesting Americans saw an increase in their purchasing power after pay trailed inflation for much of 2021 and 2022.

Fed officials consider the ECI one of the most important measures of wages and benefits because it measures how pay changes for the same mix of jobs, rather than average hourly pay, which can be pushed higher by widespread layoffs among lower-income workers, for example.

Growth in pay and benefits, as measured by the ECI, peaked at 5.1% last fall.

While higher pay is good for workers, it can also fuel inflation if companies choose to pass on the higher labor costs in the form of higher prices. Companies can also accept lower profit margins or boost the efficiency of their workforce, which allows them to pay more without lifting prices.

Fed Chair Jerome Powell has indicated that pay increases at a pace of about 3.5% annually are consistent with the central bank’s 2% inflation target.

United States News

Associated Press

11 hurt after late-night gunfire breaks out in Savannah, Georgia

SAVANNAH, Ga. (AP) — Eleven people were treated for injuries after late night gunfire broke out downtown in the tourist-destination city of Savannah. Gunfire was reported shortly before midnight Saturday near Savannah’s popular Ellis Square, police said. It was not clear whether all the injuries stemmed from gunshots. Victims were treated at the scene and […]

14 minutes ago

Associated Press

Power expected to be restored to most affected by deadly Houston storm

HOUSTON (AP) — Houston area residents affected by deadly storms last week that left at least seven dead were finally getting some good news as officials said they expected power to be restored by Sunday evening to a majority of the hundreds of thousands still in the dark and without air conditioning amid hot and […]

2 hours ago

Associated Press

America’s first Black astronaut candidate finally goes to space 60 years later on Bezos rocket

VAN HORN, Texas (AP) — America’s first Black astronaut candidate finally rocketed into space 60 years later, flying with Jeff Bezos’ rocket company on Sunday. Ed Dwight was an Air Force pilot when President John F. Kennedy championed him as a candidate for NASA’s early astronaut corps. But he wasn’t picked for the 1963 class. […]

2 hours ago

Associated Press

Airstrike kills 27 in central Gaza and fighting rages as Israel’s leaders are increasingly divided

DEIR AL-BALAH, Gaza Strip (AP) — An Israeli airstrike killed 27 people in central Gaza, mostly women and children, and fighting with Hamas raged across the north on Sunday as Israel’s leaders aired divisions over who should govern Gaza after the war, now in its eighth month. Prime Minister Benjamin Netanyahu faces criticism from the […]

8 hours ago

Associated Press

Disneyland character and parade performers in California vote to join labor union

ANAHEIM, Calif. (AP) — Disneyland performers who help bring Mickey Mouse, Cinderella and other beloved characters to life at the Southern California resort chose to unionize following a three-day vote culminating on Saturday. The Actors’ Equity Association labor union said in a statement Saturday that cast members for the parades and characters departments at Disney’s […]

12 hours ago

Associated Press

Biden tells Morehouse graduates that he hears their voices of protest over the war in Gaza

ATLANTA (AP) — President Joe Biden on Sunday told Morehouse College graduates during his commencement speech that he heard their voices of protest over the Israel-Hamas war, and that scenes from the conflict in Gaza have been heartbreaking. “I support peaceful nonviolent protest,” he told students at the all-male, historically Black college, some who wore […]

14 hours ago

Sponsored Articles

...

Collins Comfort Masters

Here’s 1 way to ensure your family is drinking safe water

Water is maybe one of the most important resources in our lives, and especially if you have kids, you want them to have access to safe water.

...

Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

...

Collins Comfort Masters

Avoid a potential emergency and get your home’s heating and furnace safety checked

With the weather getting colder throughout the Valley, the best time to make sure your heating is all up to date is now. 

US wages rose at a solid pace this summer, posing challenge for Fed’s inflation fight