US worker paycheck growth slowed late last year, pointing to cooling in a very strong job market – By Christopher Rugaber (AP News) / Jan 31, 2024
WASHINGTON (AP) — Pay and benefits for America’s workers grew in the final three months of last year at the slowest pace in two and a half years, a trend that could affect the Federal Reserve’s decision about when to begin cutting interest rates.
Compensation as measured by the government’s Employment Cost Index rose 0.9% in the October-December quarter, down from a 1.1% increase in the previous quarter, the Labor Department said Wednesday. Compared with the same quarter a year earlier, compensation growth slowed to 4.2% from 4.3%.
The increase in wages and benefits was still mostly healthy, but the slowdown could contribute to the cooling of inflation and will likely be welcomed by Federal Reserve policymakers. The Fed is expected to keep its key short-term rate unchanged after its latest policy meeting concludes Wednesday. It may signal, however, that it’s getting closer to cutting its rate later this year.
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