Labor costs edge higher

Labor costs edge higher

U.S. labor costs and job openings ticked up slightly in recent months, underscoring a still-tight employment market, according to new Labor Department data released this week.

The government on Wednesday reported that third-quarter compensation costs for private-sector employers rose 0.8% from the previous quarter and were up 3.5% from a year earlier. Compensation costs—which include wages, salaries, and benefits—continued to outpace consumer inflation, which ran at an annual 3% rate in September.

Separately, the department said U.S. job openings reached 7.67 million at the end of October, edging up from 7.65 million the month before and 7.61 million a year earlier. Hiring and separation activity remained steady, with 5.1 million hires and 5 million separations—figures largely unchanged from both the prior month and year. Separations include layoffs and voluntary quits.

Matthew Martin, senior U.S. economist at Oxford Economics, noted that job openings have risen sharply since August and notched their first year-over-year increase since July 2022. Easing interest rates and reduced federal policy uncertainty should support stronger job growth in 2026, he said.