US Labor Costs Increase Modestly in Q1

According to the Bureau of Labor Statistics (BLS) Employment Cost Index (ECI), US labor costs increased moderately in Q1 as economic uncertainty caused by tariffs cools demand for labor, Reuters reported (4-30-25).

The ECI, the broadest measure of labor costs, rose 0.9% in Q1, following a similar increase in 2024Q4. Labor costs increased 3.6% year-over-year, down slightly from a 3.8% gain in the year ending in December.

Wages and salaries, which account for the bulk of labor costs, climbed 0.8% in Q1, after rising 1.0% in 2024Q4. They advanced 3.5% on an annual basis, slowing from the fourth quarter’s 3.8% gain. When adjusted for inflation, overall wages increased 1.1% in the 12 months through March after rising 0.9% in the fourth quarter.