Turkish annual inflation rose to 10.56% in November By Reuters



ISTANBUL (Reuters) – Turkey’s consumer price inflation rose to 10.56% year-on-year in November, official data showed on Tuesday, returning to double digits after recording its lowest level in nearly three years a month earlier.

A Reuters poll forecast inflation at 11% in November.

Month-on-month, consumer inflation stood at 0.38% in November, compared with a poll forecast of 0.7%.

Annual inflation surged last year as Turkey’s currency crisis sent the cost of imports soaring. In November 2018 it stood at 21.6%, but fell back to 8.55% last month.

The producer price index declined 0.08% month-on-month in November for an annual rise of 4.26%, data from the Turkish Statistical Institute also showed.

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Euro zone inflation rises quicker than expected in November By Reuters



BRUSSELS/FRANKFURT (Reuters) – Euro zone inflation accelerated faster than expected in November on a rise in food and services prices, likely comforting European Central Bank policymakers even if some factors pushing up prices may be only temporary.

The ECB has struggled for years to boost inflation, which has undershot its target of almost 2% despite unprecedented stimulus that included negative interest rates, 2.6 trillion euros worth of bond purchases and subsidized loans to banks.

Annual inflation jumped to 1% this month from 0.7% in October, outpacing expectations for 0.9%, as volatile food prices rose more than predicted, data from Eurostat showed on Friday.

More comforting for ECB policymakers, underlying inflation also rose faster than predicted as services inflation continued to accelerate since bottoming out in July, possibly due to a normalization in the price of package holidays in Germany.

Core inflation excluding food and energy prices picked up to 1.5% from 1.2% a month earlier, beating expectations for 1.3%. An even narrower gauge, which also excludes alcohol and tobacco prices, accelerated to 1.3% from 1.1%, ahead of forecasts for 1.2%.

The November rise is unlikely to signal a bigger shift in price trends, however, and the ECB expects inflation to accelerate only very slowly, undershooting its target for years to come.

Indeed, headline inflation is only expected to average 1% next year, then rise to 1.5% in 2021 as overall growth remains below what is considered the bloc’s potential, keeping price pressures muted.

In another comforting sign for policymakers, unemployment fell to 7.5% of the workforce in October, the lowest rate since July 2008, as the number of people without jobs fell by 31,000 to 12.334 million.

Although employment growth has slowed amid the bloc’s wobble, firms are maintaining their workforces, supporting expectations that the slowdown would not morph into a recession and a recovery would eventually materialize.

The ECB will next meet on Dec. 12 and its policy stance is not expected to change for months to come.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Japan’s consumer inflation stagnant despite tax hike boost By Reuters



By Leika Kihara

TOKYO (Reuters) – Japan’s annual core consumer inflation ticked up only marginally in October despite the boost from a sales tax hike during the month, suggesting weak household sentiment is keeping companies from passing on the higher costs.

The data underscores the challenge the Bank of Japan faces in firing up inflation to its elusive 2% target, as soft global demand and the U.S.-China trade war cloud the outlook for the export-reliant economy.

The nationwide core consumer price index (CPI), which includes oil costs but excludes volatile fresh food prices, rose 0.4% in October from a year earlier, government data showed on Friday.

That matched a median market forecast and followed a 0.3% increase in September.

Excluding the impact of the sales tax hike rolled out in October and the introduction of free child-care, annual core consumer inflation was 0.2% in October, slowing from 0.3% in September.

Yasunari Ueno, chief market economist at Mizuho Securities, expects inflation to stagnate and force the BOJ to maintain its ultra-loose monetary policy for a prolonged period, given weak services prices.

“It’s nearly impossible for consumer inflation to sustainably hit 2% in Japan,” he said.

Prime Minister Shinzo Abe proceeded with a twice-delayed sales tax hike in October to 10% from 8% as part of efforts to rein in Japan’s huge public debt.

The boost from the tax increase was offset partly by the introduction of free child-care, which is aimed at easing the pain on households from the higher levy.

While rising labor and raw material costs pushed up the price of dining out, electricity bills pushed down CPI for the first time in nearly three years due to falling fuel costs, the data showed.

However, analysts said the data also showed the tax hike has so far not had the sort of negative impact on consumption that a similar hike in 2014 did in welcome news for policymakers.

“The muted rise in inflation in October supports our view that the recent sales tax hike won’t derail consumer spending,” said Marcel Thieliant, senior Japan economist at Capital Economics.

Japan’s economy ground to a near standstill in the third quarter with growth at its weakest in a year as the U.S.-China trade war and soft global demand knocked exports, keeping pressure on policymakers to ramp up stimulus to bolster a fragile recovery.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



UK home prices to lag inflation on Brexit uncertainty: Reuters poll By Reuters



By Jonathan Cable

LONDON (Reuters) – Annual home price rises in Britain won’t keep pace with already-low inflation until 2021, a Reuters poll found, and will fall in the capital London this year as uncertainty around the country’s departure from the European Union continues to deter buyers.

Britons voted in a June 2016 referendum to leave the EU but there is still no clarity about how, when or even if the two sides will finally part ways.

That uncertainty is likely to continue even if Britain leaves by Jan. 31 as is currently scheduled as there is another tight deadline – by the end of 2020 – for both parties to hammer out a new trade deal, though many doubt that target can be met.

Prices in London, for decades a magnet for foreign investors and speculators, will fall 1.5% this year and only hold steady in 2020, the Nov. 5-18 Reuters poll found.

But highlighting the ambiguity, forecasts for this year ranged from -3.0% to no change. For 2020, the range was even wider, from -2.0% to +5.0%.

“Until we have greater certainty regarding the political environment it isn’t possible to forecast what might happen in London with the greatest accuracy,” said Rod Lockhart at property finance hub LendInvest.

“We do not anticipate a material price rebound in London until at least 2022, although we may experience some recovery from 2021 – if and when the political ‘dust’ begins to settle.”

London-focused real estate agent Foxtons Group (L:) reported a fall in third quarter revenue late last month and said ongoing political uncertainty continued to weigh on volumes and prices in the London residential sales market.

For a graphic on the UK housing market outlook, click https://fingfx.thomsonreuters.com/gfx/polling/1/640/636/UK%20house%20prices%20outlook.png

Nationwide, home prices will rise 1.0% this year, 1.5% in 2020 and 2.3% in 2021, the poll of 27 property market specialists predicted. Inflation is forecast for those years at 1.9%, 1.9% and 2.0% respectively.

“Regardless of what happens with Brexit in the months ahead, a revival in the housing market is unlikely,” said Hansen Lu at Capital Economics.

“Indeed, even if a Brexit deal is implemented soon, we expect to see only a small improvement in housing market transactions and house price growth over the next two years.”

Based on recent public opinion polls, British Prime Minister Boris Johnson looks set to win a Dec. 12 election and secure the backing in parliament he needs to get his new Withdrawal Agreement passed and take Britain out of the EU on Jan. 31.

Johnson’s Conservative Party has extended its lead over the opposition Labour Party during the past week, an opinion poll by ICM for Reuters showed on Monday.

BREXIT DEAL BOUNCE

Economists in another Reuters poll last week overwhelmingly said Britain would eventually strike a free-trade deal with the EU. The second-most likely resolution was Britain remaining a member of the European Economic Area.

But third most likely in the poll of economists was the country leaving the EU without a deal and trading under World Trade Organization rules – something the housing market experts polled by Reuters said unanimously would have the most deflationary impact on home prices.

Economists said the least likely outcome was Brexit being canceled. Housing watchers – again, unanimously – said that outcome would be the most inflationary for house prices in the coming year.

Rising prices would not be welcomed by first-time buyers struggling to get on the property ladder since, despite very low borrowing costs, scraping together the minimum 10% deposit demanded by most lenders poses a huge challenge.

The average asking price nationally for a home was 302,808 pounds ($391,652) this month, property website Rightmove said, around ten times the average British salary. The average price was double that in London.

When asked to describe the level of London house prices on a scale of 1 to 10 from extremely cheap to extremely expensive, the median response was 8. Nationally they were rated 6.

“While house prices in London and the surrounding regions have been falling over recent months, prices are still significantly higher than elsewhere in the country, making buying a property in the capital unaffordable for many people,” said Jamie Durham at PwC.

“But this affordability problem is not constrained to just the capital, and house prices are high relative to wages right across the country.”

(Polling by Sarmista Sen and Khushboo Mittal; Editing by Ross Finley/Mark Heinrich)



Fed’s Daly says low inflation presents opportunity By Reuters



BERKELEY, Calif. (Reuters) – Sluggish U.S. inflation means the Federal Reserve can keep borrowing costs where they are without much cost and with a lot of potential benefit for workers, San Francisco Federal Reserve Bank President Mary Daly said on Saturday.

“We’re lucky right now,” Daly said at University of California, Berkeley’s Clausen Center’s conference on global economic issues. “We can keep the policy rate accommodative and we can both find full employment experientially, by waiting for it to show up in wage and price inflation, and we can treat the problem of muted inflation pressures and get ourselves back up to target.”

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Fed’s Daly says low inflation presents opportunity


FILE PHOTO: San Francisco Federal Reserve Bank President Mary Daly poses at the bank’s headquarters in San Francisco, California, U.S., July 16, 2019. REUTERS/Ann Saphir.

BERKELEY, Calif. (Reuters) – Sluggish U.S. inflation means the Federal Reserve can keep borrowing costs where they are without much cost and with a lot of potential benefit for workers, San Francisco Federal Reserve Bank President Mary Daly said on Saturday.

“We’re lucky right now,” Daly said at University of California, Berkeley’s Clausen Center’s conference on global economic issues. “We can keep the policy rate accommodative and we can both find full employment experientially, by waiting for it to show up in wage and price inflation, and we can treat the problem of muted inflation pressures and get ourselves back up to target.”

Reporting by Ann Saphir; Editing by Daniel Wallis



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Turkey’s Erdogan says interest rates to fall, inflation to hit single digits in 2020 By Reuters



ANKARA (Reuters) – Turkish President Tayyip Erdogan said on Saturday that interest rates will continue to fall, after the central bank last month cut rates to 14%, and added he expected inflation to hit single digits in 2020.

Speaking at a ceremony in Istanbul, Erdogan also said he expected the unemployment rate to fall once data for September is released, after unemployment rose slightly to 14% in the three months to September with the youth jobless rate hitting a record high.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Rising Medicare prices will shrink Social Security inflation adjustment next year


(The opinions expressed here are those of the author, a columnist for Reuters.)

FILE PHOTO: A doctor checks the blood pressure of a patient at the J.W.C.H. safety-net clinic in the center of skid row in downtown Los Angeles July 30, 2007. REUTERS/Lucy Nicholson/File Photo

By Mark Miller

CHICAGO (Reuters) – The cost of Medicare is going up next year – way up.

Federal officials announced late last week that the standard monthly premium for Medicare Part B (outpatient services) will jump 6.7% to $144.60. The annual deductible will rise by a similar amount.

The increases come on the heels of last month’s news that the annual cost-of-living adjustment (COLA) for Social Security will be just 1.6% for 2020. But the actual COLA will be much smaller for most beneficiaries, since Part B premiums are deducted from Social Security benefits. For example, if your Social Security benefit is $1,500, your COLA will be just under 1% – an increase of $14.90 rather than $24.

The Centers for Medicare & Medicaid (CMS) said the Part B hikes are mainly due to higher spending on “physician-administered drugs.” That is a reference to situations where physicians buy and administer drugs to patients, and earn a profit on what they bill Medicare’s Part B program. Physician-administered drug spending rose at a rapid 9.6% annual clip between 2009 and 2017, according to the Medicare Payment Advisory Commission bit.ly/36SoNO9, an independent federal body that studies Medicare and reports to Congress.

CMS has proposed a reform plan bit.ly/2O2hH12 that would reduce the cost of these drugs by tying their prices to an international index.

The Medicare-and-COLA math underscores the broad challenge retirees face in protecting themselves against inflation. Social Security is the only retirement benefit that provides any type of built-in inflation protection – one of the key reasons that the program is so valuable.

Still, rising healthcare costs pose a broader threat for retirees. Medicare’s trustees are forecasting annual Part B premium increases averaging 5.9% through 2028 – well ahead of general inflation. 

Advocates for Social Security expansion hope to address the widening gap between healthcare and general inflation by adopting a COLA formula called the CPI-E (for elderly). This is an experimental index maintained by the U.S. Bureau of Labor Statistics that more accurately reflects the inflationary forces impacting seniors, such as healthcare. It has risen slightly more quickly than the CPI-W over the past decade – so it would help, but only a bit.

THE 2020 MATH

The 2020 Part B premium hikes will impact all but the lowest-benefit Social Security enrollees – those receiving $570 per month or less this year, according to the Senior Citizens League (SCL). This group will be protected by the so-called hold harmless provision of federal law, which protects Social Security enrollees from any decline in benefits. The rule prohibits the dollar increase in the Part B premium from exceeding the dollar increase in your Social Security benefit.

All other Social Security beneficiaries will bear the full weight of the Part B premium hike, and the higher deductible applies to everyone. Other Medicare enrollees who will pay full freight on the changes include anyone enrolled in Medicare who has not yet claimed Social Security, federal or state government workers who do not participate in Social Security but do use Medicare, and anyone enrolling in Medicare for the first time next year.

Affluent seniors who pay high-income Medicare premium surcharges also will see their premiums rise. 

Since 2007, high-income enrollees have been paying surcharges on their premiums for Part B (outpatient services) and Part D (prescription drugs). Relatively few people on Medicare pay the so-called Income-Related Monthly Adjustment Amount (IRMAA). Roughly 7% of enrollees pay IRMAAs, according to Medicare.

IRMAA brackets are defined by a modified adjusted gross income (MAGI) formula that includes the total adjusted gross income on your tax return plus tax-exempt interest income. The determination is made using the most recent tax return made available by the IRS to the Social Security Administration. For example, the IRMAA you pay in 2019 would be based on AGI reported on your 2017 tax return. (You can appeal for a reduction if your income declined due to any one of a number of defined “life-changing” circumstances – and one of those is stopping work. File your appeal using Form SSA-44 from the Social Security Administration)

This year, IRMAA kicks in for single filers with MAGI above $85,000, and double that figure ($170,000) for joint filers. In that first bracket, for example, the Part B premium next year will be $202.40 next year. From there, the surcharges move up through a series of brackets; in the highest bracket, the Part B premium next year will be $491.60 – but only if you have $500,000 or more of MAGI. (If you are in that rarified air, you probably will not have much trouble shouldering your IRMAAs.)

Next year, IRMAA brackets will be indexed for inflation for the first time –  and those figures also were announced by Medicare last week. They begin for single filers with MAGI of $87,000 or above – joint filers simply double that number.

The costs of Medicare Part A also will be higher next year. Medicare enrollees do not pay premiums for Part A (hospitalization), but the deductible there will rise 3.2%, to $1,408 for the first 60 days of care. (Click here go.cms.gov/33KliaN for details on all the new Medicare premiums and deductibles.)

THE BROADER INFLATION QUESTION

An annual study by the Senior Citizens League has consistently found that the CPI-W fails to do an adequate job of keeping seniors even with inflation. The league’s report on the buying power of seniors looks at a market basket of goods, including prescription drugs, housing, health insurance, food and various taxes. The most recent report found that benefits have lost 33% of their buying power since 2000.

“Older Americans are not living on a fixed income,” said Mary Johnson, the Social Security and Medicare policy analyst for SCL. “They are attempting to live on a shrinking one – their standard of living is declining as their Social Security benefits purchase less.”

Reporting and writing by Mark Miller in Chicago; Editing by Matthew Lewis



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U.S. economy in ‘good place,’ but watching inflation By Reuters


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© Reuters. FILE PHOTO: Charles Evans, president of the Federal Reserve Bank of Chicago, poses for a photo in Palm Beach

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By Lindsay Dunsmuir

NEW YORK (Reuters) – The U.S. economy is in a good place but the path of inflation will be important in deciding the future path of interest rates, Chicago Federal Reserve President Charles Evans said on Wednesday.

“I definitely think the U.S. economy is in a good place right now. I think the U.S. consumer has been very strong…I think we’re in a good place, I think policy is in a good place. I think we’ve made a nice adjustment,” Evans told reporters following an event at the Council of Foreign Relations in New York.

Ahead of the Fed’s policy meeting last week, Evans said he would not mind another interest rate cut and has supported the central bank’s decision to lower borrowing costs three times this year.

The Federal Reserve voted 8-2 to cut interest rates by a quarter percentage point at its October meeting to a target range of between 1.50% and 1.75% but signaled it would only lower rates again if there is a material deterioration in the U.S. economic outlook.

Evans did, however, point out that the current level of interest rates, in his view, would not be appropriate should there be a future negative shock to the U.S. economy.

“Our adjustments have not been anywhere large enough to change the dynamics substantially. If there was a big negative shock, we’d have to respond,” he said.

Evans also made clear that he believes the central bank needs to do better explaining that its 2% inflation objective is symmetric – meaning it is comfortable with deviations both above and below that level.

“I think clarifying what we mean by symmetry is important…If you say our objective is 2% but you really act as if it is a ceiling, that reduces the monetary policy space you have to provide more accommodation,” he said, adding that raising inflation expectations is also key.

To that end, the Chicago Fed chief said he will be closely watching inflation as part of his decision making on the future stance of monetary policy.

“I might be a little unusual in this regard because I’ve previously said there was an argument for monetary policy adjustment on the basis of the underperformance of inflation alone…I am going to be looking at inflation quite a lot,” Evans said.

Evans does not have a vote on monetary policy this year but participates in the deliberations.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



U.S. consumer spending rises moderately; inflation muted By Reuters



By Lucia Mutikani

WASHINGTON (Reuters) – U.S. consumer spending increased marginally in September while wages were unchanged, which could cast doubts on consumers’ ability to continue driving the economy amid a deepening slump in business investment.

The report from the Commerce Department on Thursday also showed inflation was muted last month. The data came a day after the Federal Reserve cut interest rates for the third time this year, but signaled a pause in the easing cycle that started in July when it reduced borrowing costs for the first time since 2008.

Fed Chair Jerome Powell said he expected the economy to continue on a moderate growth path, driven by “solid household spending and supportive financial conditions.”

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, gained 0.2% last month as households stepped up purchases of motor vehicles and spent more on healthcare, the government said.

Data for August was revised up to show consumer spending climbing 0.2% instead of the previously reported 0.1% rise. Last month’s increase in consumer spending was in line with economists’ expectations. Consumer spending has slowed since jumping 0.5% in July.

The data was included in the gross domestic product report for the third quarter, which was published on Wednesday.

The government reported that growth in consumer spending slowed to a still-healthy 2.9% annualized rate last quarter after surging at a 4.6% pace in the second quarter, the fastest since the fourth quarter of 2017.

That softened some of the blow on the economy from the second straight quarterly contraction in business investment.

The economy grew at a 1.9% rate in the third quarter after expanding at a 2.0% pace in the April-June period.

U.S. stock index futures were trading slightly lower on Thursday while prices of U.S. Treasuries were higher. The dollar () was weaker against a basket of currencies.

JOBLESS CLAIMS RISE

Inflation was tame in September. Consumer prices as measured by the personal consumption expenditures (PCE) price index were unchanged for a second straight month in September as the cost of energy goods and services dropped 1.3%.

In the 12 months through September, the PCE price index increased 1.3% after rising 1.4% in the 12 months through August. Excluding the volatile food and energy components, the PCE price index was also unchanged last month after gaining 0.1% in August. That lowered the annual increase in the so-called core PCE price index to 1.7% in September from 1.8% in August.

The core PCE index is the Fed’s preferred inflation measure. It has undershot the U.S. central bank’s 2% target this year.

Low inflation and the lowest unemployment rate in nearly 50 years are supporting consumer spending.

In a separate report on Thursday, the Labor Department said initial claims for state unemployment benefits increased 5,000 to a seasonally adjusted 218,000 for the week ended Oct. 26.

Economists polled by Reuters had forecast claims would rise to 215,000 in the latest week.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, slipped 500 to 214,750 last week.

While the low levels of claims suggest solid labor market conditions, job growth is expected to have slowed sharply in October because of a 40-day strike by workers at General Motors (N:). Government data last Friday showed 46,000 GM employees were idle at the automaker’s plants in Michigan and Kentucky during the October nonfarm payrolls count.

Striking workers who do not receive a paycheck during the payrolls survey period are treated as unemployed. The strike by members of the United Auto Workers union, which ended last Friday, had ripple effects on the auto industry.

Economists estimated the work stoppage cut between 75,000 and 80,000 jobs from October payrolls. As a result, the employment report on Friday will likely show only 89,000 jobs were added in October, down from 136,000 in September, according to a Reuters survey of economists.

The unemployment rate is forecast to rise one-tenth of a percentage point to 3.6%.

Even discounting the GM strike, job growth has been slowing in line with ebbing demand and a shortage of workers. Slowing job growth together with signs wage growth is stalling could raise questions about the health of consumers.

While personal income rose 0.3% in September, it was driven by government subsidies to farmers caught in the U.S.-China trade war. Income jumped 0.5% in the prior month. Wages were unchanged after surging 0.6% in August.

With income growth outpacing spending, savings rose to $1.38 trillion from $1.35 trillion in August.

A third report from the Labor Department showed labor costs increased 0.7% in the third quarter after rising 0.6% in the second quarter. That raised the year-on-year rate of gain in the labor costs to 2.8% from 2.7% in the second quarter.