Labor costs rise moderately in third quarter amid slower wage growth

U.S. labor costs rose moderately in the third quarter, with a slowdown in wage growth pointing to less inflation risk from the job market. The Employment Cost Index (ECI), a key measure of labor costs, increased 0.8% in the quarter after rising 0.9% in April–June, matching economist expectations. Wages and salaries climbed 0.7% last quarter, while wages adjusted for inflation fell 0.6% over the 12 months through September, underscoring a cost-of-living squeeze. The Federal Reserve kept its overnight rate at 3.75% to 4.00% but said inflation remains elevated. Officials and economists expect possible rate hikes in December as price pressures continue.