Updated: 28-Jul-17 09:35 ET
| Q2 Employment Cost Index |
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| Updated: 28-Jul-17 09:35 ET |
Highlights
- The second quarter Employment Cost Index revealed compensation costs for civilian workers increased 0.5% (Briefing.com consensus 0.6%), seasonally adjusted, on the heels of an unrevised 0.8% increase for the first quarter.
Key Factors
- Wages and salaries, which make up about 70% of compensation costs, increased 0.5% while benefits, which make up the remaining portion, jumped 0.6%.
- For the 12-month period ending in June, compensation costs for civilian workers increased 2.4%, unchanged from the 12-month period ending in March. Wages and salaries increased 2.3% year-over-year (versus 2.5% for the 12 months ending March) while benefit costs increased 2.5% (versus 2.2% for the 12 months ending March).
- For private industry workers, compensation costs increased 2.4% year-over-year (versus 2.3% for 12 months ending March). Wages and salaries increased 2.4% year-over-year (versus 2.6% for the 12 months ending March) while benefit costs increased 2.2% (versus 1.9% for the 12 months ending March).
- For state and local government workers, compensation costs increased 2.6% for the 12-month period ending in March, unchanged from the 12-month period ending in March. Wages and salaries increased 2.1% year-over-year (versus 2.2% for the 12 months ending March) while benefit costs increased 3.2% (versus 3.1% for the 12 months ending March).
Big Picture
- The key takeaway from the report is that there was a moderation in year-over-year growth rates for wages and salaries, reflecting the lack of wage-based inflation pressure that has helped keep consumer spending activity modest and overall inflation low.
- Employment costs are the major component of business costs. The trend in these data, therefore, are looked at as a signal for cost-push inflationary pressures.
| Category | Q2 | Q1 | Q4 | Q3 | Q2 |
| Quarterly Changes | |||||
| Total ECI | 0.5% | 0.8% | 0.5% | 0.6% | 0.6% |
| Wages and Salaries | 0.5% | 0.8% | 0.5% | 0.5% | 0.6% |
| Benefits | 0.6% | 0.7% | 0.5% | 0.6% | 0.5% |
| Year/Year Changes | |||||
| Total ECI | 2.4% | 2.4% | 2.2% | 2.3% | 2.3% |
| Wages and Salaries | 2.3% | 2.5% | 2.3% | 2.4% | 2.5% |
| Benefits | 2.5% | 2.2% | 2.1% | 2.3% | 2.0% |
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