U.S. Wages, Benefits Rose 0.9 Percent in 2Q
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U.S. employment costs rose as expected in the second quarter, but at a slower rate than at the start of the year, as benefit costs growth slowed and wages remained subdued, a government report showed on Thursday.
The Employment Cost Index (search), a broad gauge of what employers pay in wages and benefits, climbed 0.9 percent in the second quarter after a rise of 1.1 percent in the first three months of the year, the Labor Department (search) said.
The increase matched expectations on Wall Street.
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Wages and salaries rose a slim 0.6 percent for the second quarter in a row. Over the past 12 months, wages are up just 2.5 percent, matching the period through March as the smallest 12-month gain on records dating to 1982.
Sluggish wage growth has become a central issue in the presidential campaign.
Democrat John Kerry has argued that many Americans are being "squeezed" as tepid wage gains fail to keep pace with a rising cost of living. President Bush counters that sizable tax cuts have given a big boost to the disposable income of Americans, providing a solid underpinning for the economy's expansion.
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Benefit costs advanced 1.8 percent over the last three months. The increase accounted for over half of the overall rise in compensation costs.
Nevertheless, the gain marked a slowdown from the first quarter when benefit costs spiked 2.4 percent, the biggest leap in more than 20 years, as company contributions to defined benefit pension plans rose sharply.