Labor costs rise 0.8% in Q3 as inflation-adjusted wages fall 0.6% over the year

Compensation costs for U.S. civilian workers rose a seasonally adjusted 0.8% in the three months through September, after a 0.9% gain in the second quarter, the Bureau of Labor Statistics said Friday. Wages and salaries rose 0.7% and benefit costs 0.9% in the quarter. Over the 12 months through September, compensation costs rose 3.4%, wages and salaries 3.1% and benefits 3.9%. Adjusted for inflation, private-industry wages and salaries fell 0.6% over the year, after a 0.3% decline in the year through June, Reuters reported.

Why it matters: The figures show pay growth trailing price increases: the PCE price index rose 3.6% in the year through September, according to the Bureau of Economic Analysis. Benefit costs are growing faster than wages.