“The employment cost index data adds to the broader evidence that wage growth has continued to trend gradually higher over recent quarters,” said Michael Pearce, senior U.S. economist at Capital Economics, said in a note. “And with labor market conditions still tightening, we expect wage growth will accelerate further from here.”

In addition to the latest data from the Labor Department, ADP and Moody’s reported that private payroll grew 227,000 in October, which bested analyst expectations. Compensation costs for civilian workers edged higher by 2.8%, but benefit costs rose 1.9% for the 12-month period ending in September.

The markets reacted positively to the data in what’s been a volatile October month for stocks. As of 1:00 p.m. ET, the Dow Jones Industrial Average was up over 300 points, while the S&P 500 and Nasdaq Composite were both up over 40 points and 150 points, respectively.

“The drop this month came out of nowhere,” said Craig Birk, CIO at Personal Capital. “Usually that’s a sign of a correction and not a bear market. Usually a bear market rolls more slowly.”

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