Wages and benefits paid to U.S. civilian workers grew more slowly in the second quarter.
The Labor Department said Friday total compensation was up 0.5 percent in the April-June period, compared to 0.8 percent growth in the first quarter.
Wages and salaries, which account for 70 percent of compensation costs, also rose 0.5 percent. Benefit costs, which cover pensions and health insurance, increased 0.6 percent.
The slight slowdown in the second quarter likely means the Federal Reserve won’t be worrying about wage growth rising too quickly. Indeed, the Fed has expressed concern recently that inflation has fallen farther from its 2 percent annual target.
Normally, solid hiring drives up wages and prices. But earlier this week, the Fed kept its key interest rate unchanged and said inflation has stayed undesirably low even though the job market keeps strengthening. Too-low inflation can slow economic growth by causing people to delay purchases