WASHINGTON – Wages and benefits rose at the fastest pace in six years last year, a sign strong job gains could be forcing companies to pay a bit more for workers.
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The Labor Department says the employment cost index, which measures pay and benefits, rose 2.2 percent in 2014, up from 2 percent the previous year. That's the biggest gain since 2008. It's also ahead of inflation, which rose 1.3 percent.
Yet the increase is still sluggish by historical standards. In a healthy economy, the index usually rises at about a 3.5 percent pace.
The Federal Reserve is closing watching wages as it considers when to raise the short-term interest rate it controls. Fed Chair Janet Yellen considers rising wages a key sign that the job market is nearing full health.