WASHINGTON — (AP) — Pay and benefits for America’s workers grew more slowly in the April-June quarter than in the first three months of the year, a trend that could keep price pressures in check and encourage the inflation-fighters at the Federal Reserve.
Compensation as measured by the government’s Employment Cost Index rose 0.9% in the second quarter, down from a 1.2% increase in the previous quarter, the Labor Department said Wednesday. The figure matches last year’s fourth-quarter reading as the slowest in about two and a half years. Compared with the same quarter a year earlier, compensation growth was 4.1%, a slight drop from 4.2% in the first quarter.
Higher wages and benefits are good for employees, but slower pay growth will likely reassure Fed officials that inflation is steadily falling back to their 2% target. Rapid wage growth can lead many businesses to raise their prices to offset the higher labor costs.
Yet inflation …