WASHINGTON, Oct 30 (Reuters) – Labor costs in the United States rose moderately in the third quarter, suggesting that inflation could remain weak and allow the Federal Reserve to leave interest rates near zero for a time as the economy it gradually recovers from the pandemic-induced recession.
The employment cost index, the broadest measure of labor costs, increased 0.5% in the last quarter after having advanced by the same margin in the second quarter. The reading reduced the year-on-year rate to a 2.4% rise from the 2.7% advance in the April-June period.
The index is closely watched by monetary authorities and economists as one of the best measures of labor market capacity and a barometer of core inflation in the United States. The increase last quarter was in line with market expectations.
(Reporting by Lucia Mutikani. Edited in Spanish by Marion Giraldo)