U.S. wages and benefits grew 0.7 percent in third quarter

In this Friday, Sept. 15, 2017, photo, Rose Neukam juggles three sheets of cookies at Baked, in Bloomington, Ind. On Tuesday, Oct. 31.

WASHINGTON — U.S. workers’ wages and benefits grew faster in the third quarter, adding to recent signs that American workers are seeing their pay climb.

The Labor Department said Tuesday that total compensation was up 0.7 percent from July through September after growing 0.5 percent in the second quarter.

Wages and salaries, which account for about 70 percent of compensation costs, rose 0.7 percent. Benefits, including pensions and health insurance, were up 0.8 percent.

Pay had been slow to recover from the Great Recession of 2007-2009 even as employers resumed hiring and unemployment fell. But with the unemployment rate at a 16-year-low of 4.2 percent, employers may be feeling pressure to raise pay to keep and attract workers.

But wage growth perked up in September, according to an earlier Labor Department report, rising 2.9 percent from a year earlier. Some of the pay pickup was caused by Hurricanes Harvey and Irma, which sidelined low-wage workers in Texas and Florida, making higher-paid workers a disproportionate share of the labor force.

The Federal Reserve has raised short-term interest rates three times this year, reflecting its confidence in the strength of the U.S. economy. The central bank meets this week but is widely expected to hold off on raising rates again until December.