US wage growth shows signs of strengthening as strong hiring boosts competition for workers

Paychecks for U.S. workers are rising at a faster pace as strong hiring in the past year has lowered the unemployment rate and increased competition for workers.

The Labor Department says that its employment cost index, which tracks wages, salaries and benefits, rose 2.6 percent in the first quarter compared with a year ago. Wages and salaries also rose 2.6 percent.

That is up from a 1.8 percent pace in March of 2014 and the fastest growth since the fourth quarter of 2008.

The report suggests companies are being forced to offer somewhat higher pay to attract workers. Still, wages and salaries typically increase 3.5 percent to 4 percent in a healthy economy.