Americans' pay gains rose faster than expected so far this year
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Paychecks saw a significant increase alongside inflation at the start of 2024. The Employment Cost Index (ECI), a gauge of labor costs, rose 1.2% last quarter, surpassing expectations. The growth was driven by higher benefits costs, while wage and salary growth remained unchanged. On an annual basis, the ECI stood at 4.2%. Adjusting for inflation, wages and benefits rose by 0.8% annually. The Federal Reserve is closely monitoring wage gains as a potential inflation pressure. Economists now speculate a Fed rate cut in September rather than June.