The Q3 Employment Cost Index showed compensation costs for civilian workers increasing 1.1% (consensus 1.0%), seasonally adjusted, versus a 1.0% increase for the three-month period ending in June. Wages and salaries were up 1.2% and benefit costs increased 0.9% from June 2023.
The key takeaway from the report is that compensation costs decelerated to 4.3% for the 12-month period ending in September versus 5.0% in September 2022. Still, that’s not enough of a change to convince the Fed that it can think about cutting rates anytime soon.
Treasury yields are climbing in response to the data.
The 2-yr note yield, which was at 5.02% just before 8:30 a.m. ET, is unchanged from yesterday at 5.05%. The 10-yr note yield, which was at 4.80% just before the data, is down two basis points to 4.86%.