Two US Cost Gauges Surpass Estimates, Stoking Inflation Concern

Two key US inflation gauges posted larger-than-forecast increases on Friday, heightening concerns that prices will remain persistently high and prompt continued aggressive interest-rate increases from the Federal Reserve.

The Labor Department’s employment cost index, a broad gauge of wages and benefits, increased 1.3% in the second quarter from the prior three months, compared with a 1.2% median estimate from economists. Separately, the Commerce Department’s personal consumption expenditures price index, which forms the basis for the Fed’s inflation target, rose on a monthly basis in June by 1%, the fastest since 2005.

Employers, with a near-record number of open ...