Analysts at Wells Fargo said in a brief note Tuesday that the first quarter Employment Cost Index (ECI) data is another setback for the US Federal Reserve.
The US Employment Cost Index in the first quarter increased 1.2% quarter-on-quarter, above the previous reading of 0.9% and above the 0.9% forecast and 1% consensus estimate.
Wells Fargo stated the "first quarter Employment Cost Index (ECI) delivered another setback in the Fed's fight against inflation."
"At 1.2% growth over the first quarter, ECI was a hefty upside surprise versus consensus expectations for a 1.0% gain," wrote the bank.
They note that compensation costs were up 4.2% on a year-ago basis, which represents an improvement from this time last year but remains unchanged from Q4.
Wells Fargo believes this is 'the latest sign progress in lowering inflation stalled early this year."