WASHINGTON (Reuters) -U.S. labor costs increased slightly more than expected in the second quarter amid a pick-up in wage growth even as labor market conditions are easing.

The Employment Cost Index (ECI), the broadest measure of labor costs, rose 0.9% in the last quarter, matching the advance in the first quarter, the Labor Department's Bureau of Labor Statistics said on Thursday.

Economists polled by Reuters had forecast the ECI would rise 0.8%. Labor costs increased 3.6% in the 12 months through June, matching the rise in the year through March.

The ECI is viewed by policymakers as one of the better measures of labor market slack and a predictor of core inflation because it adjusts for composition and job-quality changes.

Government data on Tuesday showed there were 1.06 job openings for every unemployed person in June compared to 1.33 in January. Labor market momentum has slowed in tandem with economic activity as businesses adopt a cautious approach to hiring because of uncertainty over where tariff levels will eventually settle.

The Federal Reserve on Wednesday left its benchmark interest rate in the 4.25%-4.50% range, resisting pressure from President Donald Trump to lower borrowing costs. Fed Chair Jerome Powell told reporters the labor market was in balance. But because that was partly due to both demand and supply declining at the same time, he said "we do see downside risk in the labor market." 

The U.S. central bank cut rates three times in 2024, with the last move coming in December. 

Wages and salaries, which account for the bulk of labor costs, increased 1.0% last quarter after rising 0.8% in the first quarter. They climbed 3.6% on an annual basis from the first quarter's 3.5% increase. When adjusted for inflation, overall wages rose 0.9% in the 12 months through June after increasing 1.1% in the first quarter.

Private-sector wages and salaries rose 1.0% in the second quarter. They increased 3.5% in the 12 months through June after rising 3.4% in the first quarter. State and local government wages rose 0.9% last quarter after increasing 0.8% in the first quarter. They increased 3.9% in the 12 months through June.

Benefits for all workers rose 0.7%. That followed a 1.2% advance in the first quarter. They increased 3.5% in the 12 months through June after rising 3.8% in the first quarter.