US employment costs grew slower in second quarter

WASHINGTON (AP) Wages and benefits paid to U.S. civilian workers grew more slowly in the second quarter.

The Labor Department says total compensation was up 0.5 percent in the April-June period, compared to 0.8 percent growth in the first quarter.

Wages and salaries, which account for 70 percent of compensation costs, also rose 0.5 percent. Benefit costs, which cover pensions and health insurance, increased 0.6 percent.

The slight slowdown in the second quarter likely means the Federal Reserve won't be worrying about wage growth rising too quickly. Indeed, the Fed has expressed concern recently that inflation has fallen farther from its 2 percent annual target.

Despite this quarter's slower increase, the Employment Cost Index has shown steady improvement as the unemployment rate has fallen to 4.4 percent.