Updated: 28-Apr-17 09:53 ET
| Q1 Employment Cost Index |
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| Updated: 28-Apr-17 09:53 ET |
Highlights
- The first quarter Employment Cost Index showed compensation costs increased 0.8% (Briefing.com consensus +0.6%) on the heels of a 0.5% increase for the fourth quarter.
Key Factors
- Wages and salaries, which make up about 70% of compensation costs, rose 0.8% in the fourth quarter while benefits, which make up the remaining portion of compensation costs, increased 0.7%.
- For the 12-month period ending in March, compensation costs for civilian workers increased 2.4%. That is up from the 2.2% increase seen for the 12-month period ending in December. Wages and salaries increased 2.5% year-over-year (versus 2.3% for 12 months ending December) while benefit costs increased 2.2% (versus 2.1% for 12 months ending December).
- For private industry workers, compensation costs increased 2.3% year-over-year (versus 2.2% for 12 months ending December).
- For state and local government workers, compensation costs increased 2.6% for the 12-month period ending in March (versus 2.4% for 12 months ending December).
Big Picture
- The key takeaway from the report is that compensation costs are moving higher, which will create some profit margin constraints while at the same time lending employees some increased spending potential.
- 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 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Quarterly Changes | |||||
| Total ECI | 0.8% | 0.5% | 0.6% | 0.6% | 0.6% |
| Wages and Salaries | 0.8% | 0.5% | 0.5% | 0.6% | 0.6% |
| Benefits | 0.7% | 0.5% | 0.6% | 0.5% | 0.5% |
| Year/Year Changes | |||||
| Total ECI | 2.4% | 2.2% | 2.3% | 2.3% | 1.9% |
| Wages and Salaries | 2.5% | 2.3% | 2.4% | 2.5% | 2.0% |
| Benefits | 2.2% | 2.1% | 2.3% | 2.0% | 1.7% |
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