Compensation costs for civilian workers in the United States increased 0.8% in the third quarter of 2026, matching market expectations and slowing from 0.9% in the previous period. Wages and salaries rose 0.7%, down from 0.9% in the second quarter, while benefits increased 0.9%, compared with 1% previously. Costs rose 0.8% for private-industry workers and 0.6% for state and local government workers. On an annual basis, employment costs increased 3.4% through September, unchanged from the year through June. The Employment Cost Index is closely watched because it adjusts for changes in workforce composition and job quality, making it a broad measure of labor costs and a useful gauge of labor-market slack and future core-inflation pressure. Inflation-adjusted wages fell 0.6% over the year, while the Federal Reserve kept its benchmark rate at 3.75%-4.00% and acknowledged that inflation remained elevated.