Updated: 31-Jul-25 09:40 ET

Q2 Employment Cost Index

Updated: 31-Jul-25 09:40 ET

Highlights

• The Q2 Employment Cost Index increased 0.9% (Briefing.com consensus: 0.8%) for the 3-month period ending in June 2025.
• Wages and salaries were up 1.0% and benefit costs were up 0.7%.

Key Factors

• Compensation costs for civilian workers rose 3.6% for the 12-month period ending in June 2025 versus 4.1% for the 12-month period ending in June 2024. Wages and salaries increased 3.6% for the 12-month period ending in June 2025 versus 4.2% for the 12-month period ending in June 2024. Benefit costs increased 3.5% for the 12-month period ending in June 2025 versus 3.8% for the 12-month period ending in June 2024.
• Compensation costs for private industry workers rose 3.5% for the 12-month period ending in June 2025 versus 3.9% for the 12-month period ending in June 2024. Wages and salaries increased 3.5% for the 12-month period ending in June 2025 versus 4.1% for the 12-month period ending in June 2024. Benefit costs increased 3.4% for the 12-month period ending in June 2025 versus 3.5% for the 12-month period ending in June 2024.
• Compensation costs for state and local government workers rose 4.0% for the 12-month period ending in June 2025 versus 4.9% for the 12-month period ending in June 2024. Wages and salaries increased 3.9% for the 12-month period ending in June 2025 versus 5.1% for the 12-month period ending in June 2024. Benefit costs increased 4.1% for the 12-month period ending in June 2025 versus 4.8% for the 12-month period ending in June 2024.

Big Picture

• The key takeaway from the report is that compensation costs have moderated, which could serve to lower some of the inflation temperature at the Fed.

Category	Q2	Q1	Q4	Q3	Q2
Quarterly Changes
Total ECI	0.9%	0.9%	0.9	0.8%	0.9%
Wages and Salaries	1.0%	0.8%	1.0%	0.8%	0.9%
Benefits	0.7%	1.2%	0.8%	0.8%	1.0%
Year/Year Changes
Total ECI	3.6%	3.6%	3.8%	3.9%	4.1%
Wages and Salaries	3.6%	3.5%	3.8%	3.9%	4.2%
Benefits	3.5%	3.8%	3.6%	3.7%	3.8%