Briefing.com


Q4 Employment Cost Index

Updated 09-Mar-10 19:31 ET




Highlights

  • Employment costs increased 0.5% in the fourth quarter of 2009 after increasing 0.4% in the third quarter.
  • The consensus expected unemployment costs to rise at the same rate as the third quarter.

Key Factors

  • Both wages and salaries and employee benefits rose 0.5%.
  • Private industry compensation rose 0.4% in the fourth quarter after increasing 0.5% in the third quarter. State and local government compensation increased 0.5% in the fourth quarter, up from no growth in the third quarter.
  • In private occupational employment, financial management employees saw the biggest gains in compensation with a 0.8% quarterly increase. In private industry employment, utility service provider compensation rose 1.4%.

Big Picture

  • Employment costs are the major component of business costs.  The trend in these data therefore have important implications for cost-push inflationary pressures and for profit margins.  In recent quarters, the trend has been relatively steady to lower.  The year-over-year total increase in the ECI is now below 2.0%. Weak overall demand in the economy should keep the ECI cost index on the current trend.

Category Q4 Q3 Q2 Q1 Q4
Quarterly Changes
Total ECI 0.5% 0.4% 0.4% 0.3% 0.6%
Wages and Salaries 0.5% 0.4% 0.4% 0.3% 0.5%
Benefits 0.5% 0.4% 0.3% 0.5% 0.5%
Year/Year Changes
Total ECI 1.5% 1.5% 1.8% 2.1% 2.6%
Wages and Salaries 1.5% 1.5% 1.8% 2.2% 2.7%
Benefits 1.5% 1.6% 1.8% 2.0% 2.2%