Wages rose 3.1% in the year to September, slower than prices, BLS cost index shows

Wages and salaries rose 3.1% in the 12 months to September, the Bureau of Labor Statistics said on October 30 in its quarterly Employment Cost Index, which measures changes in what employers pay for labor. That was slower than the 3.5% rise in the year to September 2025, and slower than consumer prices, which rose 3.7% over the same 12 months.

Total compensation for civilian workers, meaning pay plus benefits, rose 3.4% over the year, and benefit costs rose 3.9%. In the three months from June to September alone, compensation rose 0.8% after seasonal adjustment, with wages and salaries up 0.7% and benefits up 0.9%.

The index is built to track the cost of a fixed mix of jobs over time. BLS says it measures the change in the cost of labor "free from the influence of employment shifts among occupations and industries," so a wave of hiring in low-paid or high-paid jobs does not move it the way it can move average earnings. This quarter's figures come from about 28,000 job observations at some 6,600 private-industry workplaces and about 7,300 at some 1,400 state and local government workplaces.

Pay fell behind prices

BLS also publishes the figures adjusted for inflation. On that basis, wages and salaries in private industry were 0.6% lower in September than a year earlier, after a shortfall of 0.4% in the year to June and a gain of 0.6% in the year to September 2025. For state and local government workers, inflation-adjusted wages fell 0.5%.

The monthly earnings data point the same way. In its real earnings report on October 14, BLS said average hourly earnings adjusted for inflation fell 0.7% from September 2025 to September 2026. The Consumer Price Index rose 0.6% in September alone as gasoline jumped 9.1%, as our report on September prices explains.

Health benefit costs rose fastest

For private employers, the cost of health benefits rose 6.4% over the year, up from 6.0% in the year to June and 6.1% a year earlier. No other measure in the release's summary table rose as fast.

Benefits are a large part of what a job costs an employer. In June, the latest level data, private employers paid an average of $46.89 per hour worked: $32.82 in wages and salaries and $14.07, or 30.0%, in benefits, according to BLS's Employer Costs for Employee Compensation survey, published on September 9. For state and local government workers, benefits made up 38.8% of an average $66.45 an hour.

Where raises were larger

In private industry, union workers saw wages and salaries rise 4.3% over the year, against 3.0% for nonunion workers. By region, private-sector wages rose fastest in the West, 3.5%, and slowest in the Northeast, 2.6%; the South and the Midwest were both at 3.1%. Among occupational groups, wages rose 3.5% in professional and related jobs, 2.8% in service occupations and 1.8% in sales and related jobs.

What comes next

The next Employment Cost Index, covering the three months to December, is due on January 29, 2027. With it, BLS will switch to employment weights based on 2025 data, replacing the 2021 weights used since December 2022, and will stop counting workers' compensation costs in the index. The next monthly price figures, for October, are due on November 10.