Modest Wage Growth Signals Inflation Control in U.S.

U.S. labor costs increased slightly less than expected in the third quarter, suggesting positive signs for inflation control. The report revealed a slowdown in wage growth, amid an easing labor market. Federal Reserve officials noted that current labor costs are not contributing to inflation, and expect continued moderation.

The Labor Department reported a modest increase in U.S. labor costs for the third quarter, slightly less than anticipated. This suggests a cooling in wage growth, an indicator welcomed by policymakers aiming to manage inflation.

Senior economist Ben Ayers predicts further easing of wage growth into 2026, potentially enhancing business investment. Consensus among economists highlights the Federal Reserve's stance that current labor costs do not exacerbate inflationary pressures.

As the labor market adjusts, wage growth moderation continues, particularly in the services sector. Meanwhile, Federal Reserve monetary policies remain watchful of inflation and labor market signals, in light of recent economic data.

(With inputs from agencies.)