Paychecks are not going up a lot but health-care prices sure are

If there are inflation winds in the air, it would be difficult to tell by worker paychecks.

Employment compensation prices rose just 1.9% on an annualized basis in the 1^st quarter, after a 0.6% gain for the 3-month period, in accordance to the latest Bureau of Labor Statistics' employment cost index reading Friday. That is a sharp decrease from the year-ago period, which indicated a 2.6% gain, though the quarterly rise was in line with Wall Street expectations.

The drop in growth came from both salary and benefits, which rose 2% and 1.7% respectively, for the 12-month period. That was against gains of 2.6% and 2.7% for the year-ago period.

And while wages, salaries and benefits were stuck in neutral, the index demonstrated that employer costs for health care were on the rise, gaining 3.3% in the period compared to a 2.5% increase for the previous 12-month cycle.

The numbers are important because Federal Reserve officials are searching for signs of inflation, specifically in wages, as a cue for when it would be suitable to raise interest rates again. The Fed hiked its rate target in the month of December but has held off since amid weak economic growth and little signs of positive inflation.