Suryaa Business Desk: Labor costs in the US, the world's largest economy, rose moderately in the third quarter, according to latest government figures. Labor costs in the US, the world's largest economy, rose moderately in the third quarter, according to the latest government figures. This is a relief for the Federal Reserve, which is trying to contain inflation as wage growth pressures have eased somewhat compared to the past. Due to this balance in the labor market, economic experts are predicting that the Central Bank may take a more positive decision on interest rate cuts in the upcoming monetary policy review.
According to a report released by the US Department of Labor, the employment cost index rose more than expected in the third quarter. Costs related to wages and employee benefits are kept under control, thereby avoiding additional burden on companies. Global markets are seeing positive signs that wage growth, which has skyrocketed over the past few years, is now moderating. Economists expect these moderate labor costs to help inflation gradually move toward the Fed's target.
It is remarkable that a fine balance is being struck without the labor market being completely weakened, while at the same time wages are not pushing up enough to drive up inflation. These developments strengthen the chances of the US economy achieving a 'soft landing' without going into recession. While Wall Street markets welcomed these latest figures, investors are anxiously awaiting the extent of the Federal Reserve's next interest rate cut.
