U.S. labor costs rose more than expected in the third quarter as wages recorded their largest gain since 2008, a sign that a long-awaited pick-up in wage growth was underway.

The Employment Cost Index, the broadest measure of labor costs, increased 0.7 percent after advancing by the same margin

in the second quarter, the Labor Department said on Friday.

Economists polled by Reuters had forecast the employment cost index increasing 0.5 percent in the July-September period.

Wages and salaries, which account for 70 percent of employment costs, rose 0.8 percent in the third quarter, the largest increase since the second quarter of 2008. They had gained 0.6 percent in the second quarter.

Federal Reserve officials view the ECI as one of the better measures of labor market slack.

Policymakers at the U.S. central bank on Wednesday gave a fairly upbeat assessment of the labor market, dropping their

characterization of labor market slack as "significant" and replacing it with "gradually diminishing."

In the 12 months through September, labor costs increased 2.2 percent, the largest increase since the second quarter of

2011. They had increased 2.0 percent in the 12 months through June.

Wages and salaries were up 2.1 percent in the 12 months through September, the biggest rise since the first quarter of

2009, after increasing 1.8 percent in the 12 months through June.

Various surveys have been hinting at an acceleration in wage growth.

Benefit costs increased 0.6 percent in the July-September period. That followed a 1.0 percent gain in the second quarter.

They increased 2.4 percent in the 12 months through September after rising 2.5 percent in the 12 months through June.