Along with the personal consumption expenditures data released Friday — which the Federal Reserve thinks of as a proxy for inflation — we got some granular numbers on a big factor in the prices we see on store shelves: the cost of labor.

According to the Bureau of Labor Statistics’ employment cost index, wages and salaries went up 3.8% over the course of 2024, which means they outpaced inflation, which means workers did decently well overall.

According to that same index, employer benefit costs — your health insurance, retirement benefits, employee assistance helplines — rose 3.6% last year, also outpacing inflation.

There are two broad categories of employer benefits, and one is pretty directly tied to how tight or lax the labor market is.

“Retirement benefits, 401(k) benefits. As wages increase, which is directly determined by the cost of maintaining employees, they go up, and so there’s a correlation,” said Sue Taranto, a consulting actuary for Milliman.

But the bigger employer benefit cost — about 8% of total compensation — is health insurance. And in 2024, the premiums your employer paid went up faster than most things, besides eggs.

“So health care costs were 4 to 5% higher than general inflation,” said Taranto. “A big chunk of that is driven by prescription drugs.”

The Fed may have some influence on the labor market and by extension, wages, but it can’t control when Ozempic and other expensive weight-loss drugs are put on health plans’ formularies. Chairman Jay Powell also can’t tell big unions not to go on strike and force employers to provide higher benefits. That’s happened a good amount the past few years. Think of the dockworkers, for instance, and the United Auto Workers.

“There were a number of contracts that came due, and all of that bargaining is starting to show up in these numbers,” said Linda Barrington at Cornell’s Institute for Compensation Studies.

Health care inflation has typically outpaced regular inflation for decades now, and health care cost increases are actually a bit lower than they used to be.

But Neal Mulville at the benefits consulting company Aon said rising premiums will impact other parts of corporate budgets.

“So it’s actually leaving employers in a really uncomfortable position of being held hostage by what’s happening in health care,” said Mulville. “A dollar spent on health care essentially means $1 not spent on a salary increase.”

Aon is projecting a 9% increase in employer health care costs in 2025.