U.S. labor costs increased solidly in the third quarter amid strong wage growth while house price inflation accelerated in August, posing a threat to the Federal Reserve's efforts to bring inflation to its target.
WASHINGTON, Oct 31 - U.S. labor costs increased solidly in the third quarter amid strong wage growth while house price inflation accelerated in August, the latest signs that the Federal Reserve could keep interest rates high for some time.
Labor costs increased 4.3% on a year-on-year basis, the smallest gain since the fourth quarter of 2021, after advancing by 4.5% in the second quarter. Growth in annual compensation is gradually slowing after peaking at 5.1% last year, in line with some easing in labor market conditions. It, however, remains well above the pre-pandemic pace.
Their concerns about the economy center around the violence in the Middle East as well as domestic politics, likely reflecting the protracted battle to elect a speaker in the U.S. House of Representatives. Stocks on Wall Street were trading lower. The dollar gained versus a basket of currencies. U.S. Treasury prices rose.
Economists expected the higher wages and benefits to pressure corporate profits, with Nationwide chief economist Kathy Bostjancic noting that"some companies are losing a bit of their pricing power."
U.S. Labor Costs Wage Growth House Price Inflation Federal Reserve Interest Rates Inflation Policy Meeting Financial Conditions
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