Labor Costs Show Moderate 3.4 Pct. Rise
Despite a falling unemployment rate, labor costs in the United States continue to rise at a moderate annual rate of 3.4 percent, the Labor Department reported yesterday.</br></br>The department's employment cost index, which covers wages, salaries and fringe benefits, increased 1.2 percent in the third quarter and 3.4 percent in the 12 months ended in September, the department said.</br></br>Many forecasters and financial market participants, concerned about a possible acceleration of inflation, have been watching various measures of wages to spot any indication that labor costs have begun to increase more rapidly. Unless productivity-output per hour worked-also rose, a faster rate of wage change likely would mean higher inflation. Some expected that lower unemployment would raise employment costs by increasing competition to hire workers.</br></br>However, the quarterly increase in the index was almost identical to a 1.1 percent rise in the third quarter of last year. The index rose 0.7 percent in the second quarter, but because the figures are not adjusted for seasonal variation, comparing changes from one quarter to the next may be misleading.</br></br>For the 12 months ended in June, the increase was 3.3 percent, slightly less than the 3.4 percent in the year ended in September. For the year ended in September 1986, the rise was 3.6 percent.