U.S. employment costs rose by a bigger-than-expected 0.4 percent in the second quarter, as the deep recession and high unemployment held back worker pay and benefits, a Labor Department report showed on Friday.



Analysts polled by Reuters had forecast a 0.3 percent gain in the Employment Cost Index for the period, matching the record low gain in the first three months of the year.

Reflecting the toll of the economic downturn, the 12-month rise in employment costs of 1.8 percent was the lowest on records dating to 1982.

Wages and salaries, which make up about 70 percent of compensation, edged up by 0.4 percent in the second quarter.

However, benefit costs, which make up the remainder, rose by a more modest 0.3 percent, the slimmest gain since Jan-March 2007.