A measure of total employee compensation costs, including wages and salaries as well as benefits. The employment cost index (ECI) is the broadest measure of labor costs. Why Investors Care
| Released on 1/31/08 For Q4 2008 | |||||||||||||||||
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Highlights
The employment cost index proved steady in the fourth quarter, showing no acceleration in wage pressures. The index rose 0.8 percent in the quarter for a year-on-year rate of 3.3 percent, with both readings unchanged from the third-quarter. Compensation in the report is split between wages & salaries, at 0.8 percent for a third straight quarter, and benefits, which edged 1 tenth higher to 0.9 percent. But year-on-year, benefits slipped 1 tenth to 3.1 percent with wages & salaries at 3.4 percent for a 1 tenth gain.
These readings are on the high side especially given inflationary pressures in energy prices and the prospect that productivity will slow as economic growth slows, especially in light of yesterday's very soft 0.6 fourth-quarter GDP rate. But the results will not slow the Federal Reserve's dramatic commitment to economic stimulus. Average hourly earnings data in tomorrow's employment report will offer wage readings for January.
The employment cost index for civilian workers rose a moderate 0.8 percent in the third quarter (not annualized) for a year-on-year rate of 3.3 percent. These numbers have been very steady over the past year despite what has been a moderately tight labor market. Federal Reserve officials pay extra close attention to the ECI report for the slightest indication of wage or benefit pressures.
Employment cost index Consensus Forecast for Q4 07: +0.8 percent simple quarterly rate
Range: +0.7 to +0.9 percent simple quarterly rate
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The employment cost index measured total compensation costs which include wages and salaries and also benefits. Benefits include vacations, but the primary mover is health insurance premiums. |
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