WASHINGTON (NEWSnet/AP) — Pay and benefits for U.S. workers grew more slowly in the April-June quarter compared to the first three months of 2024.

Compensation as measured by the government’s Employment Cost Index rose 0.9% in the second quarter, down from a 1.2% increase in the previous quarter, U.S. Department of Labor said Wednesday.

The figure matches 2023's fourth-quarter reading as the slowest in about 2.5 years. Compared with the same quarter a year earlier, compensation growth was 4.1%, a slight drop from 4.2% in Q1.

Higher wages and benefits are good for employees, but slower pay growth will likely reassure Fed officials that inflation is steadily falling back to their 2% target. Rapid wage growth can lead businesses to raise prices to offset increased labor expense.

Inflation-adjusted compensation rose 1.1% compared with a year ago in the second quarter, up from 0.8% in the previous three months.

There are signs the job market is cooling. Payroll processor ADP says its count of U.S. jobs, excluding government, rose 122,000 in July, down from a 155,000 increase in June.

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