US employment cost index rose 0.9% in the second quarter as annual growth held at 3.4%

The US Bureau of Labor Statistics reported on Friday 31 July 2026 that compensation costs for civilian workers rose 0.9% in the second quarter of 2026 from the previous quarter, the same pace as in the first quarter and slightly above the market forecast of a 0.8% rise.

In the detail of the release, wages and salaries increased 0.9%, up from 0.8% in the first quarter, while benefits rose at a faster 1.0% but slowed from the 1.2% gain of the previous quarter. Compensation costs grew 0.9% for private industry workers and 1.0% for state and local government workers, both unchanged from the first quarter.

On an annual basis, employment cost growth held unchanged from the previous period at 3.4%. The long-run average for the index since 1982 is 0.85%. The employment cost index is one of the gauges the Federal Reserve follows to assess wage pressure on inflation, and steady annual growth, at a time when three members of the Federal Open Market Committee pushed for a rate increase at the 29 July meeting, is one of the inputs into the central bank's coming decisions.