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<\/div>\nLabor compensation costs in the U.S. for private sector workers\u2014including pay and benefits\u2014jumped 5.2 percent year over year through September 2022, up from a 4.1 percent increase a year earlier but down from the 5.5 percent year-over-year increase at the end of June, the U.S. Bureau of Labor Statistics (BLS) reported on Oct. 28 in its quarterly Employment Cost Index<\/a> summary.<\/p>\n The BLS reported that:<\/p>\n The cost of wages and benefits for all civilian workers\u2014private sector and state\/local government\u2014rose 1.2 percent during the third quarter and were up 5.0 percent for the year.<\/p>\n “Compensation growth for civilian workers has run above 5% at an annual rate for four of the last five quarters. Compensation growth likely moderates from this pace but important to note that labor productivity has been sluggish to date,” tweeted<\/a> Renaissance Macro Research.<\/p>\n The report is “further evidence U.S. wage growth is slowing,” tweeted<\/a> Colby Smith, U.S. economic editor at the Financial Times<\/em>.<\/p>\n Mike Konczal, director at Macroeconomic Analysis, tweeted<\/a> that the “Employment Cost Index, the wage measure the Fed most closely watches, slows, consistent with a soft landing” for the economy.<\/p>\n Inflation’s Toll<\/p>\n Rising pay and benefits spending is still trailing the rate of inflation by a fairly wide margin.<\/p>\n The value of “real” inflation-adjusted private wages and salaries fell 2.7 percent for the 12 months ending September 2022, and the inflation-adjusted value of employee benefits fell 3.0 percent for the same period, according to the Employment Cost Index report.<\/p>\n The consumer price index rose 8.2 percent year over year<\/a> in September, near a 40-year high, the BLS separately reported on Oct. 13.<\/p>\n Differences by Industry<\/p>\n Employment costs can differ significantly among industries. Among private industry occupations, compensation cost increases for the 12-month period ending in September ranged from 4.3 percent for construction and maintenance occupations to 7.7 percent for service occupations.<\/p>\n Related SHRM Articles:<\/strong><\/p>\n Persistent Core Inflation Keeps Pressure on Wages<\/a>, SHRM Online<\/em>, October 2022<\/p>\n Keeping Pay Structures Current in a Volatile Market<\/a>, SHRM Online<\/em>, October 2022<\/p>\n Wage Growth at Small Businesses Stays Strong<\/a>, SHRM Online<\/em>, September 2022<\/p>\n Related SHRM Resources<\/strong>:<\/p>\n Salary Increase Projections 2023 (and 2022)<\/a>, SHRM Express Request<\/p>\n [Need real-time, HR-reported compensation reports? Check out the <\/em>SHRM Compensation Data Center<\/em><\/a>]<\/em><\/p>\n\n
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