Wages and Benefits Growth Deals Yet Another Blow to Fed in Inflation Fight [Video]

Employee compensation growth was good for employees in the first quarter, but it was a bad sign for the Federal Reserve’s fight against inflation.

Total wages and benefits for employees rose 1.2% in the 2024 first quarter, a jump in the Employment Cost Index (ECI) from the 2023 last quarter. The data from the Bureau of Labor Statistics came in higher than the 1.0% economists surveyed by the Wall Street Journal and Dow Jones Newswire expected. 

“On balance, today’s ECI reading is not the end of the world for the FOMC, but it is yet another data point that suggests the inflation slowdown that began this time last year stalled out in the first quarter of 2024,” wrote Wells Fargo economists Sarah House and Michael Pugliese. The Federal Open Market Committee, or FOMC, is the Fed’s monetary policy committee.

Economists said the report on compensation showed inflation continues to be a challenge for Federal Reserve officials trying to …