US paychecks show little sign of accelerating in 4th quarter

In this Friday, Sept. 18, 2015, photo, an employee works on a school bus on the assembly line at Blue Bird Corporation's manufacturing facility, in Fort Valley, Ga. On Friday, Jan. 29, 2016, the Labor Department releases the employment cost index for the fourth quarter, a measure of wage and benefit growth. (AP Photo/David Goldman) In this Friday, Sept. 18, 2015, photo, an employee works on a school bus on the assembly line at Blue Bird Corporation's manufacturing facility, in Fort Valley, Ga. On Friday, Jan. 29, 2016, the Labor Department releases the employment cost index for the fourth quarter, a measure of wage and benefit growth. (AP Photo/David Goldman)

By Associated Press January 29, 2016 1 min read

WASHINGTON (AP) – U.S. paychecks increased moderately in the final three months of last year, yet the gain was little changed from the sluggish post-recession pace.

The Labor Department says the employment cost index, which tracks wages and benefits, rose 0.6 percent in the October-December quarter. That’s the same as the previous three months.

In the past year, salaries and benefits have risen just 2 percent, the same annual pace as the previous two quarters. That is below the roughly 3.5 percent rate that is consistent with a healthy economy.

The modest wage increase suggests that inflation will likely remain tame in the coming months. Higher labor costs would force companies to raise prices. The Federal Reserve predicted Wednesday that inflation would stay low in the short term.