Wages and benefits paid to U.S. civilian workers grew steadily in the first three months of the year.
The Employment Cost Index, which tracks wages and benefits, was up 0.8 percent in the first quarter, the Labor Department said Friday, That’s the biggest quarterly growth since December 2007 and slightly faster than the 0.5 percent growth in the last quarter of 2016.
Wages and salaries, which account for 70 percent of compensation costs, rose 0.8 percent. Benefit costs, which cover pensions and health insurance, increased 0.7 percent.
The index has shown steady improvement as the U.S. unemployment rate has fallen to 4.5 percent. The modest advance in the first quarter indicates that wage gains haven’t accelerated to a pace that would worry the Federal Reserve about inflation. A recent Fed report showed that overall wage increases remained modest, although businesses were being forced to offer bigger increases to workers with