U.S. Employment Costs Rise 0.9% in Second Quarter, Slightly Above Forecasts

Employment compensation costs for civilian workers in the United States increased 0.9% in the second quarter of 2026, matching the pace recorded in the previous quarter and slightly exceeding market expectations, according to data released by the U.S. Bureau of Labor Statistics (BLS).

The increase was above economists’ forecasts of 0.8%, reflecting continued growth in labor costs across the economy.

Wages and salaries rose 0.9% during the quarter, accelerating from the 0.8% increase recorded in the first quarter. Benefits also advanced, rising 1.0%.

In the private sector, employment compensation costs increased 0.9%, unchanged from the previous quarter. Compensation for state and local government workers also rose 1.0%, maintaining the same pace as in the first three months of the year.

On an annual basis, the Employment Cost Index (ECI) increased 3.4%, unchanged from the previous quarter.

The Employment Cost Index is one of the Federal Reserve’s closely watched measures of labor costs because it captures changes in wages and benefits while adjusting for shifts in employment composition across industries and occupations.

The latest data indicate that labor costs continued to rise at a steady pace during the second quarter, providing an updated measure of wage and benefit trends across the U.S. economy.

Source: U.S. Bureau of Labor Statistics (BLS).