In the United States, the fourth quarter of last year saw job cost growth fall short of market expectations. With new signs of slowing inflation, the Federal Open Market Committee (FOMC) has strengthened its argument for reducing rate hikes at its meeting this week.
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The employment costs index rose by more than 1% for the sixth consecutive quarter, breaking the longest record since 1996, when statistics began.
Source: Bureau of Statistics, Department of Labour
Several other indicators also point to a slowdown in wage growth, and the Labor Cost Index is in line with that trend. But that is still not enough to convince the Fed that inflationary pressures on those fronts have completely subsided. Officials have insisted they are far from done and could keep interest rates high for a long time.
The Federal Open Market Committee (FOMC) has been meeting since the 31st, and the market is expected to slow the rate hike to 0.25 points. The FOMC will announce its policy decisions on February 1.
Bloomberg Economics economist Anna Wong said: “The slowdown in fourth quarter employment cost index growth is a sign of lack of inflation in core services. Slower wage growth should encourage the Fed to slow the pace of rate hikes. “But I don’t think we will stop raising it to at least 5%.”
Non-military wages and salaries rose 1% in the fourth quarter. Benefits increased by 0.8%.
See the table for detailed statistics.
Original title:US Labor Cost Path Outlook, Adding to Signs of Slower Inflation (抜粋）
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