US employment costs rise marginally in fourth quarter

WASHINGTON (REUTERS) - US labour costs rose modestly in the fourth quarter, pointing to benign wage inflation that should allow the Federal Reserve to continue its monetary stimulus program to nurse the sluggish economy.

The Employment Cost Index, the broadest measure of labour costs, increased 0.5 per cent after rising 0.4 per cent in the third quarter, the Labour Department said on Thursday.

The increase was in line with expectations. In the 12 months through December, compensation costs advanced 1.9 per cent.

During periods of strong economic growth, the US central bank closely monitors the index for signs of wage inflation.