US Employment Costs Rise 0.8% in Third Quarter, Easing From Previous Quarter

US employer compensation costs rose 0.8% in the third quarter of 2026, slightly below the 0.9% increase in the preceding quarter, the Bureau of Labor Statistics reported Friday. The Employment Cost Index measures changes in wages, salaries and benefits while limiting the effect of shifts in the mix of jobs.

The seasonally adjusted increase covers July through September. Wages and salaries rose 0.7% over the quarter, while benefit costs climbed 0.9%, the agency said. The headline index measures the total cost of employing civilian workers, including private-sector and state and local government employees, but excludes federal government workers.

Over the 12 months through September, total compensation increased 3.4% on a not-seasonally-adjusted basis, matching the annual pace reported for the period through June. Annual wage and salary growth was 3.1%, while benefit costs increased 3.9%.

Private-industry compensation costs rose 0.8% during the quarter. State and local government compensation increased 0.6%. The separate figures show that the national average combines different rates of change across sectors.

The index is closely watched as an indicator of employment-cost pressure because it is designed to avoid distortions from changes in the types of jobs being measured. The latest release points to slightly slower quarterly compensation growth, but does not by itself establish that consumer inflation will fall or determine future Federal Reserve interest-rate decisions. The figures are official estimates and may be revised in subsequent releases.