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United States · Inflation & data · Source: bls.gov
US labour costs up 0.8% in Q3; wages rise 3.1% a year as real pay falls
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Editor: Hedal Kolanyi / AI-assisted
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Summary: The US Employment Cost Index rose 0.8% in the three months to September 2026, slightly slower than the previous quarter. Over the year, pay rose 3.1%, below the pace of consumer prices, so inflation-adjusted wages fell.
What happened
The Bureau of Labor Statistics (BLS) said on 30 October 2026 that compensation costs for civilian workers rose 0.8%, seasonally adjusted, in the third quarter, after 0.9% in the second. Wages and salaries rose 0.7% and benefit costs 0.9%.
Over the 12 months to September, total compensation was up 3.4%, wages and salaries 3.1% and benefits 3.9%. In private industry, inflation-adjusted wages and salaries fell 0.6% over the year. Health benefit costs for private industry workers rose 6.4% over the year.
Union workers in private industry saw compensation rise 4.3% over the year, compared with 3.3% for non-union workers. For state and local government workers, compensation rose 3.5%.
Background
The index measures what employers pay for labour while holding the mix of jobs fixed, which is why it is closely followed as a gauge of wage pressure. The release came a day after the Commerce Department reported that the personal consumption expenditures price index rose 3.6% in the year to September. Reuters reported that the quarterly rise in the index was in line with economists' expectations and that wage growth has been slowing. On 28 October, the Federal Reserve kept the target range for the federal funds rate at 3.75% to 4%, according to its policy statement.
Why it matters for markets and crypto
Labour costs feed into inflation and into the Federal Reserve's interest rate decisions. Shifts in rate expectations can affect conditions across financial markets in general, including digital assets. This data relates to the wider economy and does not express a view on any asset.
What to watch next
- 25 November 2026, 8:30 a.m. EST: BEA's personal income and outlays report for October, including the PCE price index.
- 29 January 2027, 8:30 a.m. ET: the next Employment Cost Index, for the fourth quarter. BLS says that release will introduce updated employment weights.
Sources
- U.S. Bureau of Labor Statistics, "Employment Cost Index – September 2026" (USDL-26-1620), 30 October 2026
- U.S. Bureau of Economic Analysis, "Personal Income and Outlays, September 2026", 29 October 2026
- Board of Governors of the Federal Reserve System, "Federal Reserve issues FOMC statement", 28 October 2026
- Reuters via Investing.com, "Slower wage growth curbs US labor costs in third quarter", 30 October 2026
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