Wages
What U.S. employers spend on pay and benefits for civilian workers rose 0.8% in the three months from June to September 2026, seasonally adjusted, the Bureau of Labor Statistics reported Friday, Oct. 30, in its quarterly Employment Cost Index. Wages and salaries rose 0.7% and benefit costs rose 0.9% over the quarter.
Over the 12 months ending in September, compensation costs for civilian workers rose 3.4%, not seasonally adjusted. Wages and salaries were up 3.1% and benefits were up 3.9%. But after adjusting for inflation, the bureau’s constant-dollar measures show civilian compensation down 0.4% over the year and wages and salaries down 0.6%. Benefits were up 0.1% in constant dollars.
Slower than a year earlier
The September figures point to a modest cooling in labor-cost growth. A year earlier, in the 12 months ending September 2025, civilian compensation and wages had both risen 3.5%, and in inflation-adjusted terms wages had risen 0.6%. The quarterly pace also eased: civilian compensation had risen 0.9% in the three months ending June 2026, compared with 0.8% in the latest quarter.
Benefits moved the other way. Over the year, civilian benefit costs rose 3.9%, up from 3.5% in the 12 months ending September 2025. Within private industry, employer costs for health benefits rose 6.4% over the year, compared with 6.0% in the 12 months ending June and 6.1% a year earlier.
Private industry and state and local government
For private industry workers, compensation costs rose 0.8% over the quarter, seasonally adjusted, with wages and salaries also up 0.8% and benefits up 0.9%. Over the year, private compensation rose 3.4%, wages 3.1% and benefits 3.9%, not seasonally adjusted. Inflation-adjusted private wages and salaries fell 0.6%.
State and local government workers saw a smaller quarterly increase: compensation and wages each rose 0.6%, and benefits rose 0.7%, seasonally adjusted. Over the year, state and local compensation was up 3.5%, wages 3.2% and benefits 3.8%. In constant dollars, state and local wages and salaries fell 0.5%.
Union workers in private industry continued to see faster growth than nonunion workers. Over the 12 months, union wages and salaries rose 4.3%, compared with 3.0% for nonunion workers. Union compensation and benefit costs each rose 4.3%; for nonunion workers, compensation rose 3.3% and benefits 3.9%.
Where wage growth was strongest and weakest
The bureau’s detailed table on private industry wages and salaries, which is not seasonally adjusted, shows wide differences across jobs and industries over the 12 months ending in September.
Among major occupational groups, wages rose 3.6% for natural resources, construction and maintenance workers and 3.3% for both management and professional workers and production, transportation and material moving workers. Growth was slower for service occupations, at 2.8%, down from 3.6% a year earlier, and for sales and office workers, at 2.4%. Wages for sales and related occupations rose just 1.8%, compared with 4.2% in the year ending September 2025.
By industry, private wages rose 3.7% in health care and social assistance, 3.1% in manufacturing, 3.0% in construction and 2.8% in professional and business services. Leisure and hospitality posted one of the smallest gains, at 2.2%, down from 2.8% a year earlier.
What the index measures
The Employment Cost Index tracks changes in employers’ costs for pay and benefits while holding the mix of jobs constant, so it is not moved by shifts in which kinds of workers are employed. That makes it different from average hourly earnings figures, which can rise or fall when the composition of the workforce changes. The index measures employer costs, not any individual worker’s raise.
The bureau said that beginning with December 2026 data, the index will introduce updated employment weights and stop including workers’ compensation costs. The December 2026 release is scheduled for Friday, Jan. 29, 2027.
For workers weighing a raise request or a job offer, the latest figures show that the 3.1% rise in employers’ wage and salary costs over the past year did not keep up with prices, by the bureau’s own inflation-adjusted measure, and that gains varied considerably by occupation and industry.
Sources
- U.S. Bureau of Labor Statistics, “Employment Cost Index – September 2026,” October 30, 2026. https://www.bls.gov/news.release/eci.nr0.htm
- U.S. Bureau of Labor Statistics, “Table 9. Employment Cost Index for wages and salaries, for private industry workers, by occupational group and industry (not seasonally adjusted),” October 30, 2026. https://www.bls.gov/news.release/eci.t09.htm
Featured photo: Banner University Medical Center on McDowell Road in Phoenix, Arizona, Dec. 31, 2023. Representative image; the hospital is not named in the BLS Employment Cost Index release. Photo: w_lemay, via Wikimedia Commons (CC BY-SA 2.0). Cropped from the original.
