Wages are rising faster than prices, giving American workers more buying power.
Compensation for U.S. workers was up 2.8 percent compared with a year ago in the third quarter, the Labor Department said Wednesday. That outpaces the 2.3 percent rise in the consumer price index.
The employment-cost index, which measures wages and benefits, rose 0.8% in July through September. The means wage gains are accelerating from the second quarter’s 0.6 percent gain.
The biggest gain came in paychecks, with wages and salaries rising 0.9 percent in the quarter. The cost of benefit rose 0.4 percent.
The private sector is driving the pay gains. Wages paid by U.S. businesses rose 3.1 percent from a year earlier, the strongest gain since the second-quarter of 2008. Overall private sector compensation rose 2.9 percent from a year earlier, up 0.8 percent in the second quarter. State and local government compensation rose 2.5 percent compared with a year ago.