Rising Pay and Benefits Signal Potential Inflation Challenges for Fed

In the first quarter of this year, the pace of pay and benefits growth for American workers increased, potentially heightening inflation concerns for the Federal Reserve. According to the Labor Department’s Employment Cost Index, compensation rose by 1.2%, up from 0.9% in the previous quarter. This steady year-over-year growth rate of 4.2% could influence the Fed’s decisions on interest rates, particularly with inflation fears looming as they conclude their latest policy meeting.